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The Pitfalls of Outsourcing Jobs – Why High-Value Products Lose Value

Outsourcing jobs to others is not entirely a bad thing. It helps a business focus on its core competencies by delegating mundane tasks to outside firms or contractors. This saves a lot of time and money in the design and manufacture of products, and helps the company tap great talent that is otherwise inexistent in-house.

However, outsourcing necessitates losing some level of control over how things are done. While the process of outsourcing involves designing and agreeing on a blueprint, outsourcing companies still have autonomy in the way they deliver outputs. Outsourcing can potentially diminish the value of rather high-value products due to oversights and errors.

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Just look at Swiss watches and utility knives – they pride in making their products in-house and painstakingly so using human hands in order to preserve the tradition, the quality and the uniqueness of the items. For that reason, such products command high value, and are sought-after by a niche market. Massively and digitally producing, or worse, outsourcing production of these items to some third world country would surely affect their perceived value, and possibly quality.

Sometimes, outsourcing is bad for business. It is, therefore, not for everyone. Two of the disadvantages of outsourcing hit output value head on – quality problems and bad publicity. Buyers of high-end products demand exclusivity. The rarer the item, the more valuable it becomes. Wealthy people normally do not mind waiting long and paying so much for products that they can possess exclusively. It elevates their influence and brand. And high priced products are perceived as having high quality, though not always.

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Many outdoor and camping products today were originally from the US or Europe, but production has been moved elsewhere to take advantage of low manufacturing cost. Although outdoor apparel and related items still command high prices because of the growing popularity of outdoor activities, brands produced elsewhere have seen better days for sure in terms of value (low volume, high price). Nevertheless, revenues may have gone up because of increased sales volume (high volume, low price), but perceived value of a product undoubtedly went downward spiral as evidenced by a much lower price tag.

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