What is Low-Cost Country Sourcing? Three Tips on Managing Low-Cost Country Sourcing
What is Low-Cost Country Sourcing (LCC)? Low-cost country sourcing is a process in which countries procure supplies from other countries where costs are comparatively lower than their own markets. This helps to reduce capital investments and improves profitability. So how does one go about sourcing from an LCC? Here are Three top tips for sourcing strategy. Calculate all relevantCost The tariff levels and tax structure for exporting from low-cost countries should be calculated to see if there is an actual net gain for the company procuring the items. It is essential to understand all related costs as, in many cases, there is no tangible benefit. The overall Cost of sourcing items from LCC also includes the transportation cost. While ship transport is economical compared to air or road, analysis needs to be done to compare domestic sourcing with Low Cost Country Sourcing . It is crucial to note that even after obtaining a lower tariff and transportation cost advantage, there...