Dollar fluctations benefit Small Businesses - Pump up the Benefit!
Economists and the financial sector are reporting ever more dreary results for the U.S. dollar verse other currencies. But what does that mean for small business and e-commerce businesses in particular?
Some recent news from The Business Insider is painting a silver lining for two industries in particular (no, not currency traders shorting the dollar) - U.S. manufactures and the small export businesses that tend to source from them. Why is this?
A weak dollar (and it seems to be a U.S. policy now) makes domestic manufacturers look less expensive verse their overseas competitors. Smaller businesses tend to be more prone to source locally, so smaller businesses are are seeing their product manufacturing costs go down when compared to other businesses that manufacture overseas (read larger companies). U.S. manufacturing seems to be returning a bit.
Will all small businesses benefit? No. The real competitive benefit is when you take a lower sourcing cost and then combine it with the movement of goods overseas (export) to a location where it can command a larger price point. So if you're sourcing locally and selling locally, you won't see a massive benefit. You will need to boost your business with overseas sales, either wholesale or direct-to-consumer.
If you are not already looking at how to grow your business by exporting and selling overseas, do yourself a favor and do so now. It has gotten a lot easier for a small business to manage a global supply chain and sell overseas. I've written about how to do this in past posts here on PC, so please check out those posts for loads of details and comment on them to keep the conversation alive. Questions and comments are appreciated.
Generally, look at your product line and investigate what will sell well overseas. Source locally by finding manufactures and suppliers at places like World Wide Brands and Alibaba. Partner with an outsourced product fulfillment company with one or more overseas facilities in markets where you can get penetration. Bulk move a small amount of inventory into the market and sell it on local marketplaces. Clearly that was a synopsis so check out the other post I linked to above.
Will U.S. manufacture rebound and pull us out of this economic slump? Lets hope so; but, the worry is that capital will pull out of a weak dollar economy causing bigger issues to the broader market. So keep an eye out.
I'll try and cover the container shipping implications and transportation logistics side of a weak dollar another post.
Nate Gilmore | Shipwire order fulfillment | Distribution centers in the U.S., Canada and Europe.
This post is filed under Tools, Tips and Suggestions and has the following keyword tags: manufacturing, export, product fulfillment.
