As the world becomes more globalized, the realm of shoe manufacturing extends to an international scale. Asian markets especially have a highly competitive atmosphere in the shoe manufacturing industry. Understanding the trade laws and taxes on products becomes challenging to navigate through. However, with the significant advantages of leveraging profits and potentially reaching new customers, international shoe manufacturing is receiving lots of attention.
Below, HS Footwear Co., a leading international footwear manufacturer lists some things to be cognizant of while traversing the challenges of international business:
- International Tax Laws: To be an effective multinational business, having an international accounting firm that knows local tax laws is essential to make sure that the supplier is compliant with those rules. In Asian countries, such as China and Vietnam, several shoe manufacturing companies offer their own in-house accounting divisions to help alleviate the stressors of comprehending foreign tax laws. Furthermore, countries such as Japan could get a tax return on products manufactured in Vietnam.
- Fluctuating Currency Rates: The global economy is unpredictable and can have varying impacts on the currency rates of the country your supplier is in. One way to alleviate the concern over currency fluctuation is to pay the manufacturer in the same currency as the one you are selling the product in.
- Evaluating Product Price: After taking all costs into account, the margin of desirable profitability comes into question and a price is set for the product. For instance, when manufacturing footwear in Vietnam where there is a low cost for high revenue, there is a greater profit margin. Typically, when choosing a supplier, cost per order (which is usually in the tens of thousands) is one of the most critical factors to access.
- Labor Exploitation: Unfortunately, with international manufacturing, there have been reports of labor laws that are broken for the sake of greater profits. This is a challenge of international business that can be bypassed with due diligence and investigation of labor practices with each supplier that you are considering.
An accessible international economy offers opportunities that are making every market more competitive and is encouraging companies to place a global perspective on local business. In the shoe manufacturing industry, as well, competition is steep and choosing the right supplier has challenges- whether it is understanding foreign tax laws or trying to ascertain a profitable pricing margin with an international currency- that can certainly be navigated and overcome.