An Introduction to Product Sourcing in Mexico

Sourcing products in Mexico can open up new opportunities for enterprises and can be a great alternative to China. Here are some key findings we’ve discovered along the way.

Location and Convenience 

Being a US neighboring country, Mexico is usually an attractive country for foreign investment, starting from SMEs to large corporations. Many North American companies are seeking alternatives to China as a result of COVID-19, and usually the first country that’s coming to mind is Mexico due to its proximity to the US and Canada but also because of the ease that the United States-Mexico-Canada-Agreement (USMCA) provides. Although labor costs may be slightly higher than those offered by China, everything’s usually balanced out at the end when comparing shipping costs and shipping times. For those seeking to improve their logistics and reduce transportation costs, thousands of “maquiladoras” (large factories) can be found in border cities like Tijuana, Baja California.

Industries and Products

The biggest and most mature industries in Mexico are:

  • Automotive
  • Maquiladoras
  • Food
  • Electronics
  • Aerospace
  • Metal mechanics
  • Textiles
  • Furniture
  • Clean Energy 
  • Furniture
  • Medical Devices

This means that manufacturers of almost any product can be found in Mexico and if it’s not being produced yet, many are willing to explore new business opportunities to expand their portfolio. Some industries like the automotive and textile, are more mature than others but every industry listed above is always experiencing constant growth. Larger foreign corporations can have the certainty that there are experienced factories across Mexico ready to produce in larger volumes with the expertise to elaborate high quality products that meet the demanding expectations of their clients. For smaller enterprises or SMEs there are also smaller producers willing to do business without having the pressure of mass production. No matter the size of the project, there are hundreds or even thousands of options for every industry in Mexico that are ready to take on any project.

Finding Suppliers Online

When starting the initial search for providers in Mexico it’s extremely important to take into account that there are thousands of options but they’re not as easy to find due to their weak digital presence. In Mexico, especially in the most industrialized cities, there are a variety of factories and industries to choose from, but their main marketing source is word-of-mouth or recommendation based. This means that when someone starts with the typical Google search, it’s probable that the results will consist of giant corporations. Usually it’s the big players that’ll translate their websites in English to attract foreign business and the smaller ones usually have their content in Spanish only, which can ultimately lead to less options. However, this doesn’t mean that it’s impossible to come across different options, but it’s necessary to know the various methods used to attract customers. Many businesses still run 1.0 internet websites and some even use Facebook entirely for business. Sure, this may seem a bit informal but it turns out that Mexican suppliers are very humble and trustworthy.

Cultural Business Communication

In Mexico the business culture is more traditional and antiquated than in more developed nations and direct face-to-face interactions are preferred. Mexico has obviously globalized along with the rest of the world, but faster responses can be expected by phone or even better in person, than via email. Gaining mutual trust is a determining factor and personal relationships tend to lead to better results  It’s also important to note that the concept or sense of time is different in Latin America compared to “Western Countries.” Generally speaking, Mexicans are more flexible with time and a perfect example of this is the acceptability of being up to 30 minutes late to a meeting or not sending a quick response to email requests. Initial processes might take longer overall, but this isn’t usually a limitation, and instead just a different way of working but once trust is established these differences can easily be solved.

Sourcing Agents

Even though it’s possible for foreigners to navigate through Mexican suppliers, the entire experience can be improved through a sourcing agent. Someone who knows the culture and the language can easily eliminate the cultural or language barriers and make processes much quicker. This doesn’t mean that Mexican suppliers don’t speak English or can’t adapt to other cultures. Many actually speak English and the culture as a whole is very welcoming to foreigners. They tend to get very excited about collaborating with foreign companies and easily adapt to their needs. Having someone to help with the entire process simply makes things more efficient and it helps avoid misunderstandings.

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