Building a Business

Like it or loathe it, the world is changing. Globalization is becoming a fact of life, where arbitrage is becoming increasingly important. If you don’t know what arbitrage is, look it up. Basically, it is working out that there can be price differences between two markets. For instance, rice might sell for $1 in Asia, and $3 in Australia. Therefore buying in one market and selling it in another can make money.

When building a business, it is possible to take advantage of this arbitrage. An example might be the logo we got designed for Redshift Wireless. On the international market, we got a price of $40 for the logo. Actually, we got a few quotes, and $40 was not only the one we chose, but also about the middle of the price range. Doing a quick check of local rates, we found that a similar logo would cost about $220, with some people offering prices a bit more or a bit less. And I would still say that this price is reasonable.

After removing the 10% GST, this is a $160 price difference between local and international designers. This is a large difference from a $40 base price. I like to support local industry, but this price difference was a bit too much for me unfortunately. So, what I did was buy the logo from an international designer, and then used the remaining money I would have spent locally in order to build the business. I would like to think that I spent the difference locally such that local workers got almost as much, but I am not so sure.

Unfortunately, when you are building a business, you need to make decisions like this all the time. The idea of the business is to make money, and unfortunately sometimes that means not buying locally. With Redshift Wireless I justify that with the idea that what we are building will bring more local benefit than what was lost not buying our logo locally.