Where Should I Source My Production?
By: Bruce S. Berton
Before you run to China, Bangladesh, India, Pakistan, Vietnam, Cambodia, Sri Lanka, Mexico, Sub-Saharan nations, Central America, South America, Russia, or other places being packaged as the panacea of low labor costs or great site locations, please stop and answer a few questions:
The wrong answer to any one of these questions can cause great financial harm.
As manufacturers and retailers doing business in the U.S.A., we do the research, use professional services to make contracts, perform due diligence, and have monitoring systems in place to complete processes. It seems that in foreign countries, we assume that our selected infrastructure (or the factory we are placing orders with) understands what is needed to complete an order with proper specifications and on-time delivery. The romance and drama of doing business in a foreign country tempts us to negate the RISKS as we visualize our increased gross margins.
The story usually goes like this: You land in a foreign country, the bell boy speaks very good English and answers your many questions. (He usually becomes your General Manager!!) One of your long-term employees has a sister in the foreign country, you arrive and she speaks passable English, and she becomes your agent!
When this takes place, instead of gaining gross margins, you will learn about the world of attorneys specializing U.S. Customs law, forensic accounting procedures of the IRS, Transfer Pricing, Safe Harbor, and tax regulations you have never heard of.
I kid you not, this story is being repeated over and over again.
The professionals at Stonefield Josephson have been servicing importers, exporters and multinational corporations for over 30 years. We also have a network of experienced professionals in most industrial countries that can assist you with all of your accounting, foreign legal, and transitioning of manufacturing needs.
cannot eliminate all of the risk factors, but we can make you aware of them,
and help you reach your goals.