Many businesses today from small and medium enterprises to corporations would outsource in order to reduce costs. In lessening costs, businesses can increase their profit margin in order to be competitive with other firms. This is what makes outsourcing one of the most preferred strategies of businesses. But if you are going to take a long run view, is this really helpful for the business? Unfortunately, it is not always the case especially if you choose to go for the lowest bidder of certain offshore services that you need for your business.
For one, outsourcing cannot guarantee you quality control. Let’s face it. Once you have outsourced some certain parts of your products/ services, it can already be difficult to have quality control. Some firms offering outsourcing would reduce the quality of the certain parts used in producing the products for them to increase their profit margin. This in turn can damage your business brand and can affect your sales in the long run.
In deciding to outsource, your business might lose intellectual property. This usually happens especially if the you choose to have the cheapest outsourcing services. The result is that the intellectual property rights of your business might be compromised and in the hands of the staff that you outsource to. With all the intricacies involved in the process of enforcing patents, the next thing you know there are already copycat products that can negatively affect your business this best shower head for your home article for example is full of copied models from different brands. The reason? Manufacture outsourcing.
Another downside of outsourcing is that you do not know the labor practices. For all you know, the lowest bidder that you have chosen might be supporting slave labor or even child labor practices that can damage the business brand’s image and reputation. There are also some outsourcing companies that would simply throw toxic chemicals to reduce costs which in turn can result to massive destruction. Outsourcing can reduce costs in the short-term. But given the long term results, it is crucial that business weigh their options before finally deciding to hire offshore services. Watch the video and get to know more about the downsides in outsourcing.