How to Invest in International Based 3PL Companies

Posted by McFadden Demant on June 8th, 2021

What does US based 3PL companies do? They operate in every aspect of the market place, from research and development to marketing, sales, and service. In fact they are much more than a brand name. The most successful companies are international brands with operations on all continents and in dozens of countries around the world. Think of Starbucks, BP, or Walmart they all began in the US but are global corporations today. A US company that operates internationally has many advantages. One obvious advantage is lower overheads in operating an international business. The company doesn't have to build facilities overseas, hire employees there and maintain office space. US based businesses can also compete and win against international companies whose products and services are far cheaper and much more accessible. How? They have access to the resources and markets of the major countries where they have operations. China is a great market for automobiles, and yet Toyota hasn't been able to penetrate the Chinese market because of its over-production strategy. How do they do this? They have their vast amount of production capacity and the leverage to bargain down the price. They can offer prices that the Chinese government will accept. If the Chinese government offers them lower values than US prices, US consumers will buy those cars. No one is quite sure why this works, but it does. US companies that export goods know that they must constantly innovate to stay ahead of the competition. Innovation is important because it leads to more business and more sales. Some companies have international marketing divisions to tap into those markets. Look at companies like Xerox, Dell, Microsoft, Cisco, Nortel, and others. There is plenty of scope for creativity and innovation within the US business industry. Why do some companies fail to thrive? Lack of vision, lack of direction, poor management, and an inability to focus on a global scale. When fulfillment fails to execute their plan it usually spells doom for the company. fulfillment 's really not fair. Don't think that international markets are better because they're larger. It's not true. Bigger markets usually attract more competition from smaller companies that want to make their mark. Smaller companies can't afford to spend as much on advertising or marketing compared to the bigger companies. The result is less competition and more opportunity. It's important for us based 3pl companies to get in front of China's attention. If they see that we're serious about getting this done, then they'll be willing to make deals with us. We can do many things to help them. We can open the door to trade with them. Most importantly, we need to keep our eyes on the prize. It seems like we don't hear very often about the international competition that's currently facing us. There are many reasons for this. One is that most of the major corporations do their business offshore. They've figured that it's more convenient and cost effective to do so rather than having to deal with the domestic political process at home. While they may be doing business offshore, they're not immune to the struggles at home. fulfillment need to compete against other businesses and that means reducing prices and providing better customer service. If we look at our companies carefully, we will see that many of them do very little to reduce prices, if any, and offer very poor customer service. The result? They continue to lose market share to local companies. This is why so many international companies have gone out of business in the last 15 years. They simply weren't able to compete with the smaller local companies while they were aggressively pursuing international expansion. We can see this trend playing out in the markets where we currently have customers. So it's important for us to look beyond the surface and really look at what the major domestic companies are doing to take advantage of all of the new opportunities that exist. While we are seeing a lot of talk about global consolidation and the reduction of US corporate presence, there has been a parallel increase in the growth of international based 3PL companies. These companies are creating a win-win situation for themselves by providing services that we need but that we typically cannot. By combining our technological expertise with an international company's marketing acumen, we can realize incredible results. So if you're looking for international based 3PL companies to help you capitalize on the opportunities before us, make sure you look beyond the surface to the underlying cause.

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McFadden Demant

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McFadden Demant
Joined: June 8th, 2021
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