Domestic versus Import Sourcing and Direct versus 3rd Party Shipping—How what you choose can affect your budget, timeline and peace of mind

by Kaitlyn Ziemer

Sourcing and shipping. These seem like pretty straightforward terms. But the subtleties of execution can have a big impact on your project—from budgets to deadlines, and more. However, choosing the right sourcing and shipping options for your specific project doesn’t have to be mind-bending or hand wringing. Fully understanding the implications of the options at hand can steer you toward the right product and shipping decisions.

The first step in grasping how your sourcing and shipping choices can impact your job is to understand the terms, and the risks and benefits, of the most popular options for sourcing and shipping. For sourcing, your choices are basically domestic or imported product. Direct and 3^rd party are the dominant options for shipping. So, let’s define those terms.

According to Wikipedia:

Domestic sourcing is the activity of contracting for goods or services that are delivered or manufactured within the buyer’s home country borders.

Imports are goods and products brought into a jurisdiction, especially across a national border, from an external source.

Direct shipment is a method of delivering goods from the supplier or the product owner to the customer directly. In most cases, the customer orders the goods from the product owner. This delivery option reduces transportation and storage costs, but requires additional planning and administration.

3rd Party logistics (abbreviated 3PL, or sometimes TPL) in logistics and supply chain management is a company’s use of third party businesses to outsource elements of the company’s distribution and fulfillment services—to include warehousing and transportation.

Now that we’ve clarified the terms, let’s look at the primary risks and benefits for each of the options.

If this all still seems confusing, you do have an advocate who can help you with your decision-making. Your product buyer or procurement manager is an excellent source of information. They not only understand your project goals, they also will have an intimate knowledge of the manufacturer’s—domestic or import—capabilities and, if 3rd party logistics are being considered, the shippers’ reputations. You can count on your buyer or procurement agent to provide a neutral, yet informed, assessment of the options that best suit your project requirements.

For more information or to learn more about how the Grabinski Group can help you with your next hospitality project, please contact us.