Quote:
Originally posted by lendaddy
I think you missed my point. I'm not the guy you need to worry about leaving. When my customer relocates in China and ships complete product to his customers his costs will be MUCH lower still (and he'll make a better product).
Again I say, what are we doing to keep my customer here? Maybe if we raise his taxes? Or we could raise his insurance costs? Perhaps adding additional regulations will prove to be the right bait?
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You're right, I didn't understand you.
Why will his costs improve so much more when he moves his own operations to China, versus sourcing components from China? Shipping cost and local wage inflation, the two things you mentioned, won't go away. Is he going to get better quality - he already invested millions in the Chinese factory, didn't he? I assume his sales and marketing expenses don't change, that's mostly local to where his customers are. R&D? G&A? What makes the difference?