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Forms of Offshore Sourcing

There are four forms of offshore sourcing namely, offshore purchasing, Offshore subcontracting. Joint-Venture offshore manufacturing and controlled offshore manufacturing

Offshore Purchasing

•    This is a relationship between independent buyers and seller-in which goods are  exchanged for money. The arrangement may vary in many ways, including.

•    Whether the transactions are directly between the buyers and seller or through one or more agents.

•    Dealing may be on transaction-by-transaction basis or have some longer-term contract.

Offshore Sub Contracting

•    Covers many different relationship between independent companies in which the buyers is more involved with the source than in a simple buyer-seller relationship.

•    The buyers may provide detailed product specification, technical assistance, raw materials, or needed components, or even some financing to foreign manufacturer.

Joint-Venture Offshore Manufacturing

•    It involves joint ownership by local firm and a foreign company of an offshore manufacturing enterprise.

Controlled Offshore Manufacturing

•    This relationship is that of a aren’t and a wholly-owned foreign operation, generally a subsidiary corporation that supplies the parent’s needs for a product.

Selecting The Forms of Offshore Sourcing


•    Specific forms of offshore sourcing arrangements vary widely-the basic distinction is the degree of control exercised by the buyer over foreign source.

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