Someone recently asked about shifting operations out of the United Says. 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 massive advantage small businesses have over large ones is that they provide higher quality products and superior 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’s 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 Says from overseas in order to improve customer satisfaction. The World wide web 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 have the ability to tap.
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