Weak Dollar, Strong Sales

In The Wall Street Journal, 1/20/05 (subscription only but available through ContraCostaTimes.com 1/21/05)

There was a great article in the WSJ yesterday, "Weak Dollar, Strong Sales," and it covered how declining currency allows small U.S. manufacturers to reap profits from exports. Look out world! Small businesses, if they haven't already, will soon be knocking at your doors for business.

Here are a couple of highlights from the article:

• Given the weak dollar compared to the euro, having parts made in USA is a bargain compared to what it costs in Europe.

• A company based in Cleveland claimed, "Without currency shifts, our international business would have grown, but not like this." The small company -- U.S. $8.7 million in sales -- indicates they do business in half-dozen different countries, including Mexico, the United Kingdom, Australia, and Canada and soon will be looking at opportunities in Asia.

• Currency fluctuations also expand business for the larger companies that buy parts from smaller companies. Yeah!

• There are no stats out right now to measure the volume of exports from small businesses since the dollar tumbled but the article indicates that small businesses are moving swiftly to capitalize on the opportunity.

• Although what is seemingly an ancient stat, the article claims between 1987 and 1997, exports by smaller U.S. producers grew by 169% from $74 billion to $198 billion. It gives you a good indication of the power behind small businesses when they set their minds on going global!

• The last part of the article, which offers excellent advice, finishes up with this: "Foreign business is important to our future," says Mr. Mottinger, but he adds that it isn't a quick sell. Superior worked on expanding its Mexican business for five years, but sold almost nothing in that country. It finally broke into the market in 2002 and last year had over $47,000 in sales in Mexico, making it Superior's third largest market after the U.S. and Canada.

While he says the lower dollar has opened new markets -- and he hopes it stays at favorable rates -- he doesn't count on currency changes to carry his business into the future. "It's dangerous to bet on the dollar," he says. "You need to be low-cost and very efficient, no matter where the dollar is, and that's what we're doing."

Well said.