Tuesday 07 March, 2017

Outsourcing to Asia – Why You Might Want to Think Twice

Today you have a global workforce at your fingertips. This means that your dollars can go a lot further when it comes to outsourcing. You can get work done for a fraction of the price you’d pay domestically. This is why many companies outsource manufacturing to Asia. It sounds like a great deal, but there are many hassles and problems that can pop up along the way and these may actually cost you more in the long run.

Quality Issues

‘Made in China’ has become synonymous with low quality and there’s a reason. When you outsource to Asia, quality issues are rampant. In some countries, workers will reduce costs on their end without telling you. If their expenses go up, they’ll just cut corners instead of asking you for more. For example, they’ll substitute cheaper ingredients.

If your goods are low quality, this will quickly earn your company a bad reputation among your customers. It’s often better to pay more, charge accordingly, and deliver a product that’s known for its quality.

Time Waits for No One

Time can also be an issue. You need your products delivered in a timely fashion but this isn’t always the case when you deal with Asian manufacturers. First of all, there are different cultural ideas about what ‘on time’ means in the first place. In some countries, it can be days or even weeks longer. There can also be schedule miscommunications.

In addition to causing you frustration, it can push back your sales dates and really derail your marketing campaign if you’re waiting for your products to arrive.

The Language Barrier

You may find English speaking agents and managers, but at some point the language barrier is going to be a problem. There may be miscommunications or the manager you deal with who has perfect English may disappear someday and be replaced with someone who’s not even a beginner. Communication breakdowns are common when you outsource and this adds to the frustration.

How Your Products Are Made

Finally, the lowest cost manufacturers aren’t always the safest or most ethical. Sweatshops are common in many parts of the world. You don’t want to use a manufacturer who uses child labor or mistreats its employees. Not only is this a major ethical consideration, but it can also be ruinous to your company’s reputation.

Hidden Costs

These problems are the hidden costs of outsourcing to Asia. While you may pay less per work hour, you could end up paying in many other ways because of communication problems, quality issues, and delays.

It costs more to produce locally but there’s a huge advantage – You keep the money at home, supporting the domestic economy. Although costlier, it’s a win-win for everybody. You can even use it in your marketing, telling your customers that your goods are made right here.

Bob Steele

Bob Steele is an entrepreneur, software developer, marketer, and author living in the Denver metropolitan area. He’s an avid outdoorsman who loves skiing, hiking, fishing, boating, and just plain having fun. His interests include games, space, technology, physics, cooking (well eating actually), economics, business, internationalism, and team sports. With over thirty years of professional consulting experience, Bob has been exposed to many diverse business models and has gained a sensible approach to life. Bob’s company, WaveCentric is focused on commerce, marketing, and entertainment related products.

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