Overseas Outsourcing
Someone recently asked about shifting operations out of the United States. They wanted to know if it was good idea. For a small business in these times I say, no. Keep your manufacturing and service operations close to you. The big advantage small businesses have over large ones is that they provide higher quality products and better customer service.
If you are getting beat up by a foreign competitor on price, that price advantage is evaporating.
First, transportation costs are going up. By definition a foreign made product has more transportation cost in it. If the customer is paying the shipping remind them that shipping is part of the cost of the product.
Second, the value of the dollar is dropping. Any cost savings associated with foreign manufacturing is slipping away. That is a major reason why the stock markets overseas have been taking a beating.
Third, many companies are bringing their customer service functions back to the States from overseas in order to improve customer satisfaction. The Internet social networks, MySpace and YouTube, are loaded with recordings of disastrous customer service conversations with people overseas. Airlines are leading the way. It also turns out that countries like India and China don’t have an unlimited supply of good talent we can tap.
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POSTED IN: Business Plan, Finance
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