Office Hours: Revenue Per Employee, Should I Move Production to Mexico? And Advice to an Early Career 23-year-old

Economic Benefits

The economic advantages of moving production to Mexico are compelling, especially for small businesses facing high costs in California. Scott Galloway highlights the potential for significant cost savings and increased margins, noting that Mexico offers a vibrant culture and economic opportunities at a fraction of California's expenses 1. He predicts Mexico will benefit from near-shoring trends, providing a more diverse supply chain 1.

You can move down there and you can find a lot of the culture, a lot of the interesting people, a lot of the food, a lot of the economic opportunity you have in the US, but at 50% to 60% off California, or especially Santa Barbara prices.

--- Scott Galloway

Additionally, trade data supports this move, with Mexico accounting for a significant portion of US international trade, and business visits to Mexico doubling in recent years 2.

   

Brand Impact

Shifting production to Mexico raises questions about brand identity, particularly concerning perceptions of quality and ethical production. Scott Galloway reassures that "made in Mexico" does not inherently imply lower quality, especially for high-end artisanal products 1. He emphasizes that the art scene in Mexico is thriving, and the move could enhance brand identity by showcasing ethical production practices and supporting local artisans 3.

I think you've just answered your own question. I think you've thought this out, and I don't think you need to worry about saying, I'm an artist and working out of Mexico right now.

--- Scott Galloway

By maintaining quality and transparency, brands can successfully transition production to Mexico without losing clientele 3.