Thursday, April 29, 2010

Victimized by the Reality of the Global Economy

When a client of mine e-mailed me yesterday and asked me to call her I knew there must be a problem. Turns out the company is having cash flow problems and is going to have to cut back on its advertising commitment for 2010. Given the long-term, friendly relationship I have had with the company, I am certainly not going to hold them to their contract; I understand today's economic reality.

What concerns me is one of the reasons the company is having cash flow issues. It is having a more difficult time selling its products to U.S. hotel companies because those firms are buying their products from companies in overseas countries such as China instead. Those companies are able to sell my client's particular type of product for about one-third less. I know what you are thinking: "Tell me something I don't know."

My client has one of the best green stories to tell in our industry. Its products are recyclable and made from sustainable materials. Yet, because my clients' products are made here in the United States--where labor and other costs are higher--my client is bleeding business. Meanwhile, companies in places like China benefit and badly needed dollars leave the United States.

In a traditional global economy, the companies that produce most efficiently at the lowest cost deserve to win. That said, in a global economy where sustainability and environmental responsibility are a priority, buying locally made goods is the most responsible thing to do, even if there is a cost premium. Those dollars invested trickle throughout the local economy and help everyone. Of course buying locally results in a much smaller carbon footprint as well.

It is easy for me to say because I do not own and operate a large hotel but wherever you live--in the United States or elsewhere--support local companies first. It will be one of the most sustainable things you can do.

Your thoughts?

1 comment:

Anonymous said...

Your choice: capitalism, short-term financial profitability ;)