By Laurie Panas Brackett
There has been a strong push to do business in America and specifically in your local community with locally owned businesses and for good reason. Economics 101 teaches us a trade occurs between two parties when the desire or need for goods and services are exchanged. Today that exchange usually comes in the form of money, which when exchanged in a local community is distributed for other goods and services in that area. Without a local exchange, the monies get distributed outside the area and less cash flow circulates in that area. The result to a local business can be devastating. Businesses downsize, reduce inventory or services and in some cases close up shop.
I am always amazed to hear people complaining about paying a few dollars more for goods made in this country when in the same breath they complain that their own business has tapered off. American companies have done a very good job of being competitive in the midst of foreign competition. But let’s face it, you can get many products cheaper by buying them out of the country. Why? Ask some of the manufacturers. This complicated answer boils down to unfair competition and customer education. Consumers are not educated about the product. Many believe they are paying for goods that will last as long as something they purchased a few years ago made in America, but it’s just not the case. Quality control is a major problem with overseas goods and services. Even if you have good production plant managers, you still run into plants that are making products cheaper and keeping the profits. All to the demise of the end user consumer. The consumer wants quality but they have been so conditioned over the years to get it cheap. You can’t have it both ways.
For example, you can get printing done cheaper in Malaysia or photography done cheaper in China. But is the cost really saving you money? (Not to mention the quality in product discrepancies including cheap inks, paper and labor knowledge— let’s just stick to how it hurts your sales in this blog…..)
If you continue to try and save cost on services you used to have done in your community, you then help to reduce the cash flow for those businesses and you reduce the amount of money that is available to their employees to purchase your goods and services. Your company receives fewer sales locally over time.
So you market overseas and have them purchase your products? Good luck with that. Other cultures are much more loyal to their country’s companies than us Americans. We will leave our neighbors and friends for 10 cents if it helps our bottom line. But again, are you really getting ahead or are you hurting your local economy so much that your own sales are now suffering?
I am not suggesting that you sacrifice every purchase you make for the good of your community and country. I just want you to understand how that purchase can affect your company’s future sales. Also consider making sure your estimate is an apples to apples comparison. If there is a large discrepancy in the estimate, you need to inquire as to what you are getting or not getting. Keep posted on suggestions for estimate considerations in my future blogs. Till then, think globally but buy locally.