Saving Strategies for Businesses Across Economic Borders
Regardless of the size and scale of businesses, many of these entities across various markets rely on collaborations and partnerships from other economic regions of the world. Because modern trade is shaped by comparative advantage and global value chains, firms now operate in an environment where exchange rates, transaction costs, and economies of scale directly influence their cross-border decisions.
That small mom-and-pop shop around the corner? While they may craft their own goods locally, there’s a high chance they source their raw materials from another region or from overseas. And even if they don’t, they likely use equipment and platforms powered by global companies.
Many businesses collaborate with global providers for various reasons. From exclusivity to better pricing, these reasons can vary. Regardless of the cause, it’s a very prevalent reality across much of the developed world, including Australia, the United Kingdom, and beyond.
Given the interconnectedness of trade and commerce in modern times, businesses need to employ the right strategies to ensure that they’re leveraging the global market in their favour. The good news is that there are many ways businesses can optimise costs across these economic borders and stay ahead of this very dynamic curve
If you want your business to have this edge, then you’re in the right place. This article will list some actionable strategies to help your company optimise its spending and create better opportunities for its survival and prosperity.
Let’s get right into it.
Compare Supplier Costs Across Regions
One effective way to save is by comparing the value of ingredients or raw materials from suppliers across different regions.
The price of certain raw materials may naturally fall or rise depending on the underlying market where they mainly operate. Furthermore, other factors may also contribute to the overall costing of the inventory, from shipping costs to the region’s reputation.
Given this natural variance, there will always be a region or supplier that provides a better value offering than the rest. If you want to save on costs, it’s crucial to take some time to do ample research and partner up with the ideal supplier. This begins by first looking at the pool of options that can affect your overall costs.
For example, an Australian cafe might find that locally sourced coffee beans are significantly more expensive due to labour and farming costs, while beans imported from Vietnam or Brazil offer comparable quality at a fraction of the price. In some cases, packaging from other regions may also be cheaper than your own.
By comparing potential costs across different regions and understanding the full cost behind each supplier, you position your business to secure the best value possible. In turn, this helps keep your business agile, but it also positions it for future growth.
Use Expense Management Tools
You can also utilise tools like an expense management tool to keep track of your business spending.
These tools help by clearly laying out a detailed categorisation of your business’s cash outflow, allowing you to know where your money goes and how much you’re allocating for specific cost categories.
Furthermore, they also come with features like invoice matching and receipt scanning. This makes it easier for your business, specifically your finance department, to make reconciliations faster, as well as automate entries with greater speed. If you want to know more about expense management tools, OFX provides detailed information on the features of expense management software.
These tools can also highlight hidden costs, like foreign exchange charges. In any case, this tool can give you a clearer understanding of your business’s spending habits, allowing you to allocate your budget more strategically across different regions.
Leverage Favourable Currency Conditions
Timing the foreign exchange market is another great way to improve your business’s purchasing power. There are moments of market fluctuations that could give your currency an advantage over another.
For instance, the yen is currently weak from a global perspective, making it more cost-effective to purchase Japanese-made equipment or materials.
Striking when the iron is hot can help you lock in better prices for the same goods or services. When you take advantage of these windows, you maximise value while keeping your operational costs lower. This, in turn, results in more money in your business’s pocket to fuel growth in areas of your choosing.
Outsource Tasks to Cost-Efficient Regions
Another way to increase your business’s savings is by outsourcing work to regions that have more affordable labour markets.
If your business relies on processes that don’t require physical presence, such as graphic design or marketing, then you could consider hiring global talent on sites like Upwork to cover these needs for you instead.
The reason is simple: a lot of these roles can be filled by people who are satisfied to work at a rate lower than your nation’s average. This applies to a wide range of jobs, from administrative assistance to more technical work.
By partnering with these professionals, you can reduce wage expenses while still maintaining an acceptable or even satisfactory level of quality. The good news is that for many developed nations, there’s a big world of capable talent across many countries that can accomplish the tasks you need them to do.
By redistributing non-core responsibilities to cost-efficient markets, you free up your local team’s time and gain more ground to scale your operations more efficiently.
Optimise Shipping Route Logistics
Another saving strategy businesspeople can employ is to optimise shipping routes for both sales and inventory.
Vet suppliers and logistics partners and talk to them about their shipping methods. Look at the offers of each partner, and from there, choose the shipment type that best suits your operational needs.
This could be a full-container load (FCL) for bulk shipments, less-than-container load (LCL) for smaller orders, air freight for time-sensitive goods, or sea freight for cost efficiency—up to you!
Different logistics partners may also offer routing strategies that can be more cost-effective or faster, depending on your wishes and negotiations. Factor that into your decision-making process, and from there, select the best pathway for moving your goods (or accepting inventory) across borders.
We hope that these saving strategies can serve you well as you navigate a global business world. All the best in running your business!
