For many American and foreign companies, manufacturing products in Mexico can be an attractive option. With its proximity to the United States and favorable business climate, Mexico has become a hub for international trade, offering a wealth of opportunities for businesses looking to expand their operations. However, finding reputable Mexican suppliers can be a daunting task, especially for those unfamiliar with the market.
In this article, we will provide you with a step-by-step guide on how to find reliable manufacturers in Mexico, from conducting online research to meeting with Mexican representatives in person. We will also offer tips on how to identify trustworthy manufacturing companies in Mexico, and discuss the potential risks and challenges that businesses may face when sourcing suppliers in Mexico.
Why Manufacture in Mexico
Mexico's manufacturing industry offers numerous benefits for companies looking to grow their business. The country's lower-cost labor force and competitive wages offer a significant cost advantage to companies. Additionally, Mexico's manufacturing economies are becoming more sophisticated, providing businesses with access to modern facilities and well-established supply chain networks. These factors, along with the country's young and skilled workforce, make it an attractive option for businesses looking to expand their manufacturing capabilities.
Mexico's diversification of the market is another advantage. The country provides easy access to a range of markets and customers, making it a desirable option for businesses looking to diversify their customer base. Moreover, Mexico's proximity to the United States is a crucial factor, allowing businesses to reduce transportation costs and lead times. These factors provide a compelling reason for businesses to consider manufacturing in Mexico as a way to expand their production capabilities and take advantage of the many benefits the country has to offer.
If you are interested in learning more about why businesses are moving to Mexico to manufacture their goods, check out our blog titled "Mexico Disrupts Chinese Manufacturing". The post discusses the benefits of relocating manufacturing operations from China to Mexico, as well as the current state of the manufacturing industry in Mexico. You'll gain valuable insights into the reasons why many companies are making the move to Mexico and how this shift is impacting the global manufacturing landscape.
Products Manufactured in Mexico
Mexico has a diverse and thriving manufacturing industry that spans across various sectors, catering to both domestic and international markets. The country is known for its production of a wide range of products, including electronics, automotive parts, medical devices, aerospace components, and household appliances. These industries play a crucial role in Mexico's economy, contributing significantly to its overall profitability.
In addition to these sectors, Mexico also boasts a strong presence in the food and beverage industry. The country is a major producer of popular beverages such as beer and tequila, as well as processed foods including juices and nectars, sauces, canned fruits, canned legumes, seafood products, cereals, and a range of traditional Mexican specialties such as moles, hot sauces, guacamole, and avocado cubes. Furthermore, Mexico has a growing textile and apparel industry, manufacturing clothing, accessories, and footwear that are exported worldwide.
Aside from these notable industries, Mexico is home to other thriving sectors, including construction materials, chemicals, plastics, and metalworking. These industries contribute to the overall economic growth of the country and provide employment opportunities for its citizens. Mexico's manufacturing industry is highly diversified, allowing it to meet the diverse needs of various industries and markets.
Among the diverse manufacturing landscape in Mexico, industries such as pharmaceuticals, technology hardware, aerospace & defense, and automotive manufacturing are considered to be highly profitable. These sectors not only contribute significantly to the country's economy but also attract substantial investment and generate substantial revenue.
How to Find Manufacturers in Mexico
While countries like US and China have online manufacturing search portals like Thomasnet.com and Alibaba.com, Mexico lacks such a platform. As a result, finding the right manufacturer in Mexico can be overwhelming. Finding Shelter companies in Mexico can be fairly easy with a quick online search but building out Supply Chains in Mexico can be much more difficult.
Because of this, many businesses opt to work with a Mexico sourcing consultant who can provide street-smart sourcing to ensure the best price and quality in Mexico. A consultant can help you find reliable manufacturers and even help relocate your American or foreign company to establish a new source company in Mexico.
Talking to Suppliers in Mexico
When sourcing suppliers in Mexico, here are some key things to keep in mind:
- Check the company website: Unlike in the US, Mexican businesses typically don't allocate significant resources to their supplier websites. A supplier's website may not reflect their capabilities accurately, and some businesses may not even have a website.
- Verify capabilities: When asked if they can fulfill a request, suppliers in Mexico typically answer "yes," even if the request may be beyond their capabilities. It's essential to explore a supplier in person and check their facilities to ensure they have the necessary capabilities.
- Use phone calls: In Mexico, email is typically considered a complementary process, while face-to-face meetings and phone calls are more standard. It's crucial to pick up the phone and call the company when sourcing a supplier.
- Visit in person: For senior executives, visiting manufacturing locations in person is essential, especially during the negotiation process. This can help build trust between trading partners and establish strong relationships, which are highly valued in Mexican culture.
Keep in mind that finding the right supplier in Mexico may take time and effort, but by exploring the above solutions, you can be sure that you are partnering with a reputable and reliable business that can meet your specific needs.
Challenges Sourcing in Mexico
Beginning the process of sourcing suppliers in Mexico can be challenging, as businesses may face language barriers and cultural differences. These challenges can make it difficult for businesses to identify the right suppliers and ensure that their products meet the necessary quality standards. It's essential for businesses to conduct thorough research and due diligence, including on-site visits and audits, to mitigate these risks and ensure that they are partnering with reputable and reliable suppliers. Also, the process takes time. Mexico is unlike China where you can attend a trade show and place a PO shortly thereafter.
However, with patience and due diligence, the reward of working with a supplier in Mexico can be significant. Mexican suppliers offer competitive pricing and high-quality products, and businesses can benefit from the country's strategic location and well-established supply chains. By finding the right supplier, businesses can successfully tap into the vast potential that Mexico has to offer, paving the way for long-term success and growth.
The Importance of Comparing Total Landed Costs
When choosing between manufacturing in Mexico and China, comparing total landed costs is essential for businesses aiming to enhance their supply chain efficiency and cost-effectiveness. This comprehensive analysis goes beyond initial manufacturing expenses to include tariffs, shipping costs, and lead times that impact the overall expense of importing goods from these countries. China has traditionally been favored for its expansive manufacturing capabilities and traditionally low labor costs.
However, Mexico presents several advantages, such as proximity to the U.S. market, which can significantly reduce shipping times and costs, as well as favorable tariff conditions under trade agreements like the USMCA. By thoroughly assessing the total landed costs, companies can make well-informed decisions that not only minimize expenses but also mitigate risks and improve supply chain resilience. This strategic approach enables businesses to leverage the unique benefits of each country, ultimately achieving a competitive advantage in the global marketplace by selecting the most efficient and cost-effective manufacturing location.
Mexico US Cross Border Logistics
Mexico's proximity to the US provides significant advantages for businesses, particularly when it comes to cross-border logistics. Shipping products from Mexico is often a preferred option over shipping from other locations in the world due to the ease and speed of transportation. Compared to countries such as China or India, shipping from Mexico is faster, more cost-effective, and reduces the time it takes for products to reach the market.
Additionally, Mexico has free trade agreements with more than 40 countries, including the US and Canada, which facilitates the movement of goods and allows for more streamlined customs procedures. This ultimately leads to lower costs and faster delivery times, making Mexico an ideal location for businesses looking to streamline their supply chain.
Moreover, Mexico's proximity to the US means that it is easy for companies to travel back and forth to oversee production, negotiate deals, and troubleshoot any issues that may arise. This allows for more effective communication and collaboration between businesses in the US and their Mexican suppliers.
How long does it typically take to ship products across the border from Mexico to the US?
The duration of shipping products across the border from Mexico to the US typically depends on several factors. These factors include the resting times required for drivers, the chosen route for shipping, as well as the time necessary for cargo inspection. However, it is important to note that there are external elements that can cause delays in the shipping process. Some of these factors include weather conditions, holidays, and potential truck issues. Taking all these factors into account will help to provide a more accurate estimate of the typical shipping time for products crossing the border from Mexico to the US. But, when comparing to importing from Asia, Mexico takes days compared to weeks.
How expensive is cross-border shipping between Mexico and the US, and are there ways to save money?
The overall expenses incurred for cross-border shipping are determined by various factors, such as the origin point and destination point, the mode of transportation utilized, the weight of the shipment, and the specific type of product being transported. However, despite the inherent expenses associated with cross-border shipping, many times the total cost per unit for shipping is lower than from Asia. For example, when shipping from Asia, the largest ocean containers typically available to most importers is a 40' High Cube (HQ) container. From Mexico, 53' trailers and intermodal containers are available. This allows companies to typically get 50% more inventory on a truck versus a 40' container from Asia. This can have a major impact on reducing the logistics costs per unit.
To reduce transport costs further and improve reliability of the supply chain, the best option is to collaborate with a proficient logistics company. By engaging with such a service provider, substantial savings can be achieved. This is primarily due to the leverage of preferential rates based on the volume of shipments. The logistics company's expertise also plays a significant role in facilitating price comparisons, thereby enabling cost-effective decisions on shipping arrangements. By availing these services, businesses engaging in cross-border shipping between Mexico and the US can mitigate the financial burden typically associated with this process.
What factors should be considered when choosing the right shipping service for shipping from Mexico to the US, such as cost, specificity, service level, asset or non-asset-based, and sustainability?
When selecting a shipping service for shipping from Mexico to the US, there are several key factors to consider. These factors include cost, specificity, service level, asset or non-asset-based options, and sustainability.
1. Cost: It is essential to choose a shipping service that aligns with your business budget. However, it is not solely about the overall cost. You should also consider the quality of service and delivery time offered by the shipping service. This will depend on your company's desired turnaround time and efficiency standards.
2. Specificity: It is crucial to select a shipping service experienced in handling shipments from Mexico to the US. They should be well-versed in the regulations and requirements of this shipping process to ensure a smooth experience. Avoid choosing a shipping service that may be unprepared for the specific requirements you may have.
3. Service Level: Assess the level of service or LOS (Level of Service) rates offered by the shipping service. It is vital to ensure that the chosen company has a long history of reliability. This reliability will enhance your business's reputation and overall processes. Additionally, look for a shipping service that provides effective communication, keeping you updated on the status of your shipment.
4. Asset or Non-Asset-Based: Consider whether you prefer an asset-based or non-asset-based shipping company. An asset-based company provides all the necessary materials for transport, streamlining the process. Conversely, a non-asset-based company involves more individuals in the shipping process, which increases the possibility of errors. If you aim to minimize errors, an asset-based company is typically the more appropriate choice.
5. Sustainability: It may be of interest to find a shipping company that aligns with your business's sustainability goals. If reducing your company's carbon footprint is important, search for shipping companies that offer eco-friendly solutions. These companies often have environmental commitments in place that match your sustainability objectives. Note that opting for an environmentally conscientious company may result in additional costs.
Considering these factors, you can make a well-informed decision when choosing the right shipping service for shipping from Mexico to the US. If you're interested in learning more about cross-border logistics and how it can benefit your business, check out our blog post titled "Optimizing Your Global Supply Chain with Cross Border Logistics." In this article, we explore the advantages of using cross-border logistics, including reduced transit times, lower costs, and increased flexibility.
Are there any restrictions on importing and exporting to and from Mexico?
Yes, there are restrictions on importing and exporting goods to and from Mexico. These restrictions need to be taken into account, especially if you have plans to manufacture products in Mexico that you intend to sell in the United States. It is important to be aware of the specific regulations and requirements enforced by both countries to ensure compliance and to avoid any potential issues or delays in your import and export process.
What documents are required for importing from Mexico to the US?
The necessary documents for importing goods from Mexico to the US include an import form, a commercial invoice, a bill of lading, and a NAFTA Certificate of Origin. Please note that the NAFTA Certificate of Origin is only applicable to goods that meet the requirements for NAFTA qualification. Additionally, all goods imported and exported from Mexico require a Mexican Customs broker and a Pedimento to be filed to for customs in Mexico.
Business Consulting Services In Mexico
Looking to establish manufacturing in Mexico or ship products to the US? The process can be complex - from finding the right suppliers to navigating cross-border logistics. That's where Visigistics comes in. Our team of experienced business consultants can help guide you through every step of the process, ensuring that you have a smooth and successful experience. From sourcing the right manufacturers to managing the logistics of shipping, we have the knowledge and expertise to help you succeed. So if you're interested in taking advantage of the benefits of manufacturing in Mexico, or if you need help shipping your products to the US, talk to one of our team members at Visigistics today.
If you are not ready to talk to someone yet, feel free to download our eBook The Power of Nearshoring in Mexico.