Let’s face it – when we talk about sourcing, we think about China. So why are we suddenly looking at Mexico?
It’s no secret that we’ve all had a rough couple of years in business – covid really did us in. Some of us may have thought that all the supply chain backlogs and other issues will be straightened out as soon as everything normalizes, but there is an underlying truth that has surfaced like a wake-up call amidst this pandemic: sourcing from China has become so riddled with flaws that the smartest move to make now is to look at other sourcing options.
If there’s one thing directly affected by sourcing issues, it’s your inventory – and if there’s one person you want to talk about inventory with – it’s Chelsea Cohen. Chelsea is the co-founder of SoStocked – an inventory management software designed for Amazon sellers. She joins Ryan Cramer in the Crossover Commerce podcast to talk about Mexico as the next China, as far as sourcing for inventory goes (you can watch Ryan and Chelsea’s conversation here).
What difficulties are we going through now in sourcing with China? Chelsea breaks them down into the following:
– Ports and factories shutting down due to covid have resulted in longer lead times in shipping – from 60 to 120 days or more
– Market saturation led to shortages in cardboard, aluminum, plastic, and other raw materials in China
– The US-China trade war has caused tension in American-Chinese business relationships. We have witnessed boycotting of Chinese products by Americans, and vice versa
– China has implemented power curbing in their factories – restricting the number of days and hours that a factory can use power, causing more delays
This is where Mexico comes in. First and most obvious of all – Mexico’s proximity to the USA presents so many resolutions and advantages versus China. It’s easier to travel back and forth, lead time is more manageable, and being in almost the same time zone as Mexico makes communications easier.
Second – Mexico offers a range of products and alternative raw materials – textiles, ceramics, rubber, and more – in case of shortages from our usual sources.
Third – the USMCA (formerly known as NAFTA) implements free trade between the USA, Mexico, and Canada – which means no tariffs, unlike China.
Fourth – more affordable cost of labor, less culture shock, and other advantages – which Chelsea discusses in detail.
So – could Mexico be the next China? Chelsea definitely makes a convincing argument. Don’t miss Ryan and Chelsea’s conversation – watch it here: Why Mexico Could Be the Next China EP 235
Would be interested in seeing if there are any Mexico suppliers who also provide shipping direct to customers via dropshipping and/or shipping direct to FBA warehouses.
Wanting to avoid storing inventory myself. I realize other options would be renting storage space or using a 3PL.
Hey Dan! Thanks for your question. Your best bet is to work with the myriad of logistics providers and warehousing options there in Mexico that are lower cost than US and can get your stuff to Amazon in 2 days via ground transport. There are tons of options for this plus you’d be able to source replens and wholesale products your competitors won’t!
I am working on a new product and am looking for a alternative supplier. I can not afford to join in the sourcing trip you have in June. How could I get started looking for a good manufacture in Mexico? It kills me not to be going there in person!
Any help with this would be greatly appreciated!!! Thanks!!!
The best way is in person, it is tough to source from Mexico virtually as it is not China and there is more communication to do. However, the tradeshow is FREE to attend!! So even if you can’t attend the trip, you could buy a very affordable plane ticket to Mexico City and get to the tradeshow to make those connections. We will have sourcing agents and everything you need there. Even if you cannot make it, register for our tradeshow free at evolatam.com and you’ll be on the mailing list for future sourcing info.
I am super interested in this trip, my product is 90% neoprene. I would like to appropriately gauge whether there will be multiple manufacturers who make neoprene based products. Is there a list of venders/suppliers that will be attending?
Thank you so much for your interest in EVOLATAM, the premier trade show in Mexico that connects buyers from the world to the sourcing opportunities in Latam.
It would be impossible for us to host all the vendors and local manufacturers in Mexico, so rather than just presenting wholesale sellers, we match our The Mexico Trip attendees with several suppliers in Mexico that can handle product development or source a unique product, as well as handling sourcing from Mexico to the US. In addition to meeting suppliers and manufacturers in person at the EvoLatam trade show and via our expert workshop speakers, The Mexico Trip connects you with experienced and qualified sourcing agents. By adding additional types and levels of “sourcing options”, you are able to access THOUSANDS of suppliers, in addition to the ones you will meet in person.
Let me know if you have any other questions, I’ll be happy to help at email@example.com