How Flywheel Sourcing Can Help You Navigate the Changing World of Retail and Manufacturing
The manufacturing industry has undergone rapid changes in recent years. If your business engages in overseas manufacturing, you’ve likely felt the effects of these changes.
This ever-evolving landscape can make it challenging to stay on top of recent developments, much less reach your goals and grow your business. To that end, here we’ll go over a few of the changes we’ve seen in recent years and how Flywheel Sourcing can help you navigate the changing world of retail and manufacturing.
Faster Access to Products for U.S. Clients and Retailers
Today’s retailers want closer and faster access to products in the supply chain. Meeting this expectation requires a more efficient (and potentially diversified) supply chain, and near-shoring can help build that efficiency. Moving sourcing to Mexico, for instance, can mean products get to retailers much more quickly while also saving you money in logistics costs.
Manufacturing is growing in Mexico, and sourcing options are becoming more abundant. For companies manufacturing in China, shifting operations to Mexico can provide similar (or even reduced) labor costs, reduced transportation costs for raw materials, and the option to incorporate just-in-time manufacturing practices into their current supply chain.
Companies need to carefully consider the best strategy in making this decision for their businesses. It’s important to look at all factors, including cost, quality, execution, location, and more. This doesn’t mean that moving your entire supply chain out of Asia is the only option. But having diversification in countries of production to minimize risk can be a very healthy direction where the size and scope of your business support it.
In addition to our sourcing connections across Asia, sourcing in Mexico is now an option. If you’re looking to move some or all of your sourcing closer to home, we can help you explore this strategy as well as identify and manage key factory partners.
Diversifying Countries of Production
Ongoing supply chain vulnerability and logistics issues over the past few years have led many companies to diversify their sourcing options.
Rather than relying fully on a single country of production for their sourcing needs, they’re expanding their sourcing to multiple countries (where size allows). Countries like Vietnam, Indonesia, Malaysia, Mexico, and others have seen an increase in manufacturing in recent years as companies look to expand their sourcing options and decrease supply chain risk.
With our wealth of sourcing options in Asia beyond China — including in Vietnam, Indonesia, Malaysia, Korea, Taiwan, and more — Flywheel Sourcing can help you build a supply chain that reduces your vulnerability to disruption.
Our team can also help you manage project costs by:
Providing quotes from different factories in different countries
Negotiating optimal costing
Performing cost analysis and validation
Advising on optimal materials for quality and costing
Performing ongoing factory reviews to ensure best pricing
Monitoring raw material pricing trends
and more!
Emphasis on Eco-Friendly Products and Packaging
If sustainability and low-waste packaging haven’t been high on your priority list, now is the time to make them a higher priority.
More and more consumers are demanding that both the products they buy and the materials they’re packaged in be recyclable and sustainable. For example, one 2022 study found that 77% of respondents expect more brands and retailers to offer 100% sustainable packaging for their products in the near future.
You can read more about this topic in our recent blog, but here are a few highlights to keep in mind:
Consumer demand for eco-friendly products and packaging is at an all-time high.
For younger generations, the environment is priority #1.
Retailers are adopting higher sustainability standards for the products they stock.
At Flywheel Sourcing, we can help you meet your sustainability goals, including sourcing eco-friendly materials for your products and packaging. Once we understand your goals and requirements, we’ll work with the factories to implement and monitor these initiatives. This can include anything from the materials the product is made from to product packaging to the size of the final master carton.
In addition, we are often in tune with developing retailer requirements and initiatives for their owned brand programs, and we work with our clients to implement and monitor these processes and requirements.
Rapid Growth of Online Sales vs. In-Store
Flywheel’s U.S. leadership team has vast experience in the retail sector, previously serving as senior buyers and sourcing managers for Target. We understand what it’s like for our clients and how they need to interact with buyers, and we can help them navigate the changing world of retail.
One of the biggest changes in retail in recent years has been the rapid growth of ecommerce. It’s clear that ecommerce is here to stay. Globally, the ecommerce industry hit $5.7 trillion in 2022, and is expected to grow to $8.1 trillion by 2026. It's easier than ever to shop online, and consumers are taking advantage of that:
59% of shoppers say that when deciding which brand or retailer to buy from, the ability to shop on mobile is important.
Shoppers go online first in over 60% of shopping occasions.
64% of shoppers find it easier to browse for new items online vs in-store.
Soon, online shopping will be a non-negotiable for consumers. Committing to long-term ecommerce growth is a wise strategy.
At Flywheel Sourcing, while we don’t have influence over how much of a product is sold in-store vs online, we work to support our clients' needs for both with our full suite of services from concept through delivery.
Flywheel Sourcing is built to support the needs of our clients, from finding factories that meet their needs to keeping them informed about consumer and industry trends. Our team is ready to help you navigate the changing world of retail and manufacturing so you can reach your goals and grow your business. Contact us to learn more.