Local Company vs Outsource Company for the U.S. Customers

Online businesses should consistently maintain quality standards while meeting consumer demand. Typically, there are two ways of doing that: either contacting local companies or outsource suppliers. Usually, customers consider factors such as location, business culture compatibility, reputation, cost, and quality commitment when choosing between American and outsourced companies. Additional factors like strong communication, well-written contracts, constant management, and understanding goals are also important for the ongoing success of a business relationship. The choice to hire locally or go offshore for the U.S. customers can also hinge on the stability and legal culture of a country, local education systems, privacy and security, size and skill of labor pool, and language compatibility. In this article, we will try to determine the pros and cons of both solutions.

When to Use Local Company

People who work and live near one another or at least within the same country/state will have more in common in terms of background, business culture, language, etc. This makes management and communications easier. In addition, it is simply easier to conduct inspections and meetings when you do not have to travel really far. Therefore, if a professional web development agency can be found nearby, it seems logical most companies would pick that option. However, there could be some other reasons of doing so:

1.Keeping an eye on quality personally

Nothing beats the chemistry of live communication. Keeping production in the U.S. is a great idea if you want to conduct quality inspections personally. This allows maintaining higher quality standards and minimizing the potential problematic issues. Also, this establishes the loyalty with the customers from the U.S.

2.You are in the initial stage in small town

If you’ve just started your online business, and your company has a relatively low product demand, selecting the local supplies in small towns tends to be the better option.

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When to Outsource

Why do businesses go offshore to outsource their needs? The answer is very simple and predictable. As always in business, cost is a major concern. Outsourcing services overseas is usually less expensive. Here are several additional reasons:

1.Low Profit Margins

Keeping up with competitors in web development industry can be challenging. In this case, going local is not an option. At the same time, going overseas should keep your company competitive as outsourcing production is less expensive.

2.High Demand

When you are having difficulty keeping up with demand due to significant growth of your online business, using offshore companies is a perfect choice for you.

Local companies
Pros:

  • More trustability
  • Located within the same country/state
  • Customers can come personally to inspect
  • No language or culture barrier

Cons

  • More costly (especially, companies from the U.S. and western Europe)
  • May be difficult to find the right company (especially, when you need to create a complex marketplace, ERP system, or mobile app)

Outsource companies
Pros:

  • Cheaper price (depending on region)
  • Quality

Companies from Eastern Europe is a best option when it comes to price/quality ratio. For instance, Ukraine is one of the world’s oursource leaders with thousands of qualified IT specialists famous for their culture of quality. Ukrainian IT industry drives the whole economy so these people are definitely know what they are doing.

  • Many options to choose from

There is a wide range of companies on outsourcing market. You can always find the right one for projects of any complexity. In order to pick a professional web development agency, we recommend you to check the company’s previous works and read reviews, and then contact their management to understand the development process from inside.

Cons

  • Less trustability
  • Sending money to noname can be risky
  • Time difference (10 hours difference between Ukraine and California leaves less time for cooperation)

To sum up, in many countries wages are lower than in the U.S. This fact alone means a substantial savings to your business if you decide you hire an outsourcing partner located in Eastern Europe. In addition, countries such as Ukraine offer a business-friendly environment and variety of other benefits for American business. So this chance is worth taking. In any case, we wish you good luck in your search!