The "buy local, ship global" IT hardware procurement strategy significantly outperforms in-market sourcing when it comes to total costs and operational flexibility.
(PREMISE B)
Any company, with sufficient experience purchasing IT hardware for global use, quickly realizes that “buying local and shipping global” would be the optimal strategy - if they could do it. But after a few experiences shipping themselves, they discover that international IT shipping is riddled with complexity. Even when a shipment is successfully delivered, the process is often painful. But with FGX, it doesn’t need to be painful. You can enjoy the benefits of “buying local and shipping global” without the overhead needed to execute international logistics at a world class level.
(GUIDING PRINCIPLE 01)
The barrier to companies using the "buy local, ship global" methodology more is the amount of work, effort, and confidence that it takes to do it. There are dozens of things that you have to get right when shipping high-value, highly regulated commodities, or you risk customs seizure, and this often makes the bite not worth the chew.
But what if we could remove the work and stress from the global IT shipping experience? What if we could making global IT shipping an experience as opposed to a chore? More companies would feel comfortable buying their hardware in the USA, where it’s cheapest. More companies would materially handle their hardware before it ever gets shipped, giving them better control and security over their supply-chain. More companies would have visibility over their supply-chain, enabling better project management and security. The list can go on and on.
We believe that by making the shipping experience as seamless as possible, IT organizations will self-elect to ship their hardware, and as a result—whether intentional or not—become more efficient and sovereign. We’re betting that our domain expertise and decades of IT logistics experience will allow us to build the best solutions in this space for a long time to come.
(GUIDING PRINCIPLE 02)
The most seamless way to procure your hardware—theoretically—is to have a hardware vendor bundle “international delivery” into their quote, since it would be their job to worry about distribution. But in reality, the experience is rarely seamless. For example, you may only find out at the 11th hour that:
The costs are going to be greater than quoted.
Double taxation wasn’t taken into consideration.
You couldn’t take advantage of special tax statuses that were available to you.
There was more administration and paperwork than originally anticipated.
Certain devices can’t even be imported into the destination market.
You aren’t able to reclaim import taxes or receive import documentation.
You have to onboard and pay 40 different international vendors.
But let’s assume everything goes perfectly. Even then, the business outcomes will almost always be subpar. There are two main reasons for this:
Unless you have a deep understanding of how the IT supply-chain works, you can’t minimize logistics costs. In fact, in an effort to make a purchase as seamless as possible for the buyer, hardware vendors—unintentionally—often pay for the most expensive solutions available. With the average IT shipment’s purchase value being greater than ~$70,000.00 and an average import tax rate of 20% and Importer of Record rate of 8% for non-US countries, the extra costs range from the thousands to millions of dollars. If the deal is being done through an in-market reseller, the costs are often higher, due to reseller-to-reseller markups [1].
Even if a shipment’s costs were optimized by the reseller or their shipping vendor, by giving up control of your hardware until its been delivered, you turn down dozens of operational opportunities. Such as, consolidated material handling (asset tagging, configuration, rack and stack), increased buying power via purchasing consolidation, greater SKU availability, detailed tracking, reliable and low variance timelines, etc.
Seamlessness can’t come at the cost of great business outcomes and we believe that the above two points carry too high a premium. Although we’re using hardware vendors as an example here, the above points also apply to other intermediaries.
[ASIDE]
We’re not picking on hardware or channel providers. They’re often given a job by their client and they do their best to fulfill their client’s wishes. It’s not their fault that the available solutions when it comes to international delivery and fulfillment have been subpar. We’ll also be doing our best to make the global IT shipping experience seamless and best-in-class for vendors and their clients with FGX Partners.
(GUIDING PRINCIPLE 03)
It’s not enough to “just deliver" shipments to their end destination seamlessly. The logistics solution—from request to delivery and beyond—has to be best-in-class. Meaning that we provide logistical solutions that are: as cost optimized as possible, logistically sound, and empathetic. To make that even more explicit, here are some examples of what we mean:
The cost incurred for each shipment should be the minimum required to achieve a project’s goals. This means we won’t use a cookie cutter template for your shipment. We come up with options and quotes that are optimized to your specific shipment, company’s tax statuses, and more. We’ll also take the time to minimize duty, tax, export and import fee exposure, while ensuring your shipment complies by all rules and regulations.
Customs clearance success is always our number one priority. We’ll do all the work upfront—before you ever pay us a dime—to validate whether a shipment has an extremely high likelihood of clearing customs. You shouldn’t find out at the 11th hour that your project is actually untenable. Across thousands of shipments, we’ve had a 99.98% success rate clearing customs, in large part due to our Feasibility Checks step. The only issue we’ve had in the past decade was with a shipment undergoing customs clearance in Brazil, where the local authorities suddenly decided to institute a new law. This forced us to turn the shipment around. We made sure that our customers got all their money back and paid no fees.
You often have to coordinate deliveries with engineers flying out, with cascading project timelines. It’s why we take setting expectations very seriously. Projected timelines are communicated upfront before you accept a quote, so that you can ensure it makes sense for you. Although our timelines have the lowest variance in the industry, we’re continuously striving to make them more and more accurate.
Shipments are underwritten with a global insurance policy built for IT hardware shipping; if something goes wrong, your coverage won’t be voided and you’ll get the full insurable value of your hardware back.
World-class customer service is key. We aim to deliver both expert guidance and concierge-level service to our clients.
Our commitment to best-in-class means providing our clients with the best business outcomes that they can find in the industry.
FOOTNOTES
[1] There are times when buying in-market is the more cost effective solution, but this is usually for lower value, consumer-grade goods being shipped at a low volume. For example, shipping a single laptop to India will be more expensive than buying in-market. Buying in-market can also be cheaper when shipping to Western countries that have a lot of demand for the products you’re looking to buy, e.g. United Kingdom and Canada. But we’ve encountered plenty of projects where this wasn’t the case.