There’s no sector of industry that hasn’t been affected by the massive growth of low cost manufacturing in China. Outsourcing will almost certainly cut costs, but is it a proposal worth considering in the kiosk business?
What are the potential downsides of outsourcing?
Firstly, you will have less control over the process. Big companies like Apple outsource their manufacturing and apart from bad publicity about workers’ conditions still have a great reputation for quality. That’s because Apple have the money and the clout to ensure that their rules are followed. If you don’t have that clout, you won’t have that control.
Materials will probably be lower quality, which is vital if your kiosks are going to be used outside. A lot of the components in a kiosk must be high quality to work – touchscreens, CPUs and thermal printers – and they also need to be compatible with your software for a cost-effective operation.
Outsourcing also means you will probably have to outsource replacement parts. It’s possible that you won’t be able to find the same materials, industrial materials, particularly in something as complex as a kiosk are no longer simple, generic things.
Standard practice in every possible way are different. Manufacturing laws are less stringent, measurement standards may be different.
Finally, you are communicating at a great distance. The Chinese have a wonderful command of English, but most of the people you speak to will be communicating in a second language in a very technical area.
Building a kiosk is a demanding business. Lots of delicate machinery needs to fit perfectly in order to interact perfectly. Everything needs to be ventilated, but protected from water. The more complex the design the more likely mistakes are – when you are developing a new model and need to tweak the design, sending it back to the other side of London is much easier than sending it back to the other side of the world for modifications.
Dealing with foreign markets always comes with risks. You’re in a different legal jurisdiction; shipping is another process where delicate machinery can be damaged; and if things go wrong, who do you complain to?
So, buying kiosks from abroad is a tempting way to cut costs, but in the long run, supporting an imported kiosk will soon start to eat into those savings, if you even get a working machine.
[image by Stuart Miles]