3 Ways to Leverage the Global Economy
About 14 years ago, just after I returned from the Peace Corps in Nepal, I was strolling through Rockport, MA with my family checking out the little shops in the seaside village. I was just starting to test out the whole concept of selling jewelry and thus had a pocket full of silver gemstone rings in my pocket that I thought I may try to wholesale in the town.
One of the shops I approached was a little skanky and run down, with a real shabby window display. The proprietor seemed disheveled and out of place and was the only one inside. He was excited to see a customer in the store. I guess he thought I might make a purchase. He offered his assistance and I flashed my silver rings trying to make a sale to him. Well, that did not go over too well. Being that he was already on the edge I think I was the tipping point. Apparently this man was a jewelry maker and had been such for years. He was in the twilight of his career, not neccessarily because of his age, but because he was not adapting to the new reality. He could not compete with the stuff coming in from overseas.
So when this guy found out my jewelry was made in Nepal he went ape-&%*$! He released a string of obsenities that would have made George Carlin proud! I walked away but my step-dad felt the need to retaliate. The jewelry maker one-upped him by pulling his pants down in front the entire town. Looking back it was both funny and sad.
That was my first direct experience with the global economy. And on that day the paradox could not be more striking between myself and that poor old jewelry maker. For me free-trade and a borderless commerce world represented opportunity and possibilities and for him it was a dagger to the heart. Like most everyone else, I like to buy locally and support my local economy, but this is only practical to a certain degree.We, as consumers are very demanding, and more significantly, CHEAP! Most of us cannot afford to buy 100% locally produced food or clothing, or toys, or cars. But then again if we continue down our current trajectory as a country, China will literally own the United States within 20 years.
Where is the happy medium? How do we leverage the global economy as small businesses? How do we do it ethically? How do give our customers what they want while being true to ourselves? I am still trying to figure that out! But here are some concepts and pragmatic ideas that I find helpful:
Don’t be resistant to Change
Most effective to illustrate through example. Some of my most succesful customers are designers and jewelry-makers. They make beautiful, unique products. They source their raw materials and semi-finished materials. They do NOT try to make everything themselves! They may buy a pair of earrings from me, take the hooks off and re-solder them onto an omega chain to make a beautiful necklace. Or buy their beads direct from Bali. One guy buys scrap silver and gold from passerby at craft shows and gets a great rate! They have figured out how to retain their core competency of design, while substantially lowering their costs and conserving their own time, thus remaining profitable in changing times. Stay on top of industry trends and look for opportunities to do things differenty/ more effectively.
Follow the currency markets and commodities that are related to your business
I check the silver rates several times a day. When I have extra money and the price of silver is low I buy my raw materials for the months to come. Same thing with currencies. If the Euro is weak, I’ll buy some now in anticipation of an order in 3-4 months and that way I am able to get better prices that I can pass on to you. You don’t have to be a manufacturer for this to make sense. If you know the silver rates are projected to stay high for a while, and they just went up, NOW would be a great time to invest in product. Because in 2-8 weeks, as wholesalers sell off their ‘cheap’ inventory, prices will spike.
Outsource!
Conundrum. I love India and work with Indians every day, but I just HATE getting “stephn” in the Hyderbad call center. That is my peeve. There are certain things I would never outsource, especially to another country. Answering phones and customer service is one such thing. But I love outsourcing little programming or design projects and you can get great service at about 75% off what you would pay a US-based designer or programmer. The caveat is ONLY outsource if you know what you are doing and just need some more hands on deck. Otherwise you will not be able to effectively manage the project. I have a contractor in Washington State who does all my design work at $50/ hour. And I have programmers in India who do some work for $5-$10/ hour. Its not one-size fit all. But you should consider. Great projects include: Web design, tech programming, online marketing, graphic design, copy-writing, etc. Elance.com has all they you need to get started. I use elance all the time. Very simple. Also for rote stuff like data entry, try Amazon’s Mechanical Turk; this place is really kind of wacky til you get the hang of it but it’s going to revolutionize the global work-force.
I gotta go to sleep. If you got this far, thanks for reading! Next week I will be unveiling a new streamlined website and adding a ton of new stuff. In the mean time, there are some great values on the site – this is all stuff I bought when silver was priced at about $9-$10 (currently $12-$13).
