Monthly Archives: November 2010

Labor Costs & Overall Pricing

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Labor costs within a pricing formula

The way large companies choose which companies to outsource work to is based on a very complicated algorithmic formula that takes into consideration many aspects. We’re all aware that labor cost is one of the major considerations that effect the price of outsourced labor. But, there is a lot more involved, and since prices are always changing, long term cost considerations need to be included in a calculation.

Per capita income and prices
Statistically, India is a very poor country with per capita income around $700 per year (rough figure) while American income is around $40,000 per year. Therefore, the price of labor in India must be 57 times as cheap, right? Wrong. American income doesn’t vary so dramatically from place to place and from city to countryside. Although extreme cases exist including NYC which has wages that might be double what wages are for similar jobs in Mississippi, the rest of the country doesn’t vary so significantly. There are parts of India such as Bangalore or Chennai where a highly skilled Indian software worker makes $20,000 to $100,000 per year while a peasant in the Bihari countryside might only make 50 cents per day and might only eat once per day (on a good day).

The BPO jobs that happen in India are generally located in high cost urban areas where the price of labor and everything else is sky high. This is why the price of outsourced labor in India is only four times as cheap as in the U.S., and not fifty-seven times as cheap.

Job conditions in India
The next problem is that inflated and rising land prices in India make companies conserve on space. India has less land than the U.S., yet has four times the population, and the population shows no sign of declining either. Indians are typically squeezed in offices with their small desks crammed together like sardines. The American “dream” of having your own 6×6 cubical simply doesn’t exist for most Indian Software or call center workers. The price of land continues to rise in Indian metros making outsouring costs higher and higer. A 2 bedroom condo in the outskirts of Pune costs even more than it would in Portland, OR on a square foot by square foot basis.

High turnover is another cost in India
A few decades ago, it was only the lucky in India who could get a decent job, and the rest had to take menial jobs just to survive working for pennies per day.  Nowadays, there are too many good BPO and Indian software jobs. Its common for young techno-saavy Indians to skip from job to job chasing better working conditions, more likeable bosses, higher salaries, and nicer looking female work counterparts. Every time an employee jumps boat, that costs the boss a bundle to try to find someone new and train them. This cost gets transfered to the customer in the long run.

Management costs can vary
This is a very difficult issue to pinpoint, but there is always a management cost for the company who hires and outsourcing company. If your company is nearby or on a similar time zone, communication is easier and travel to see your outsourcing company is quick. If the company is working while you are sleeping, unless you sleep late, you will have trouble interacting with that company, not to mention the 30 hour plane flight to Mumbai! If you need to visit a company frequently, then outsourcing to India will carry a hefty management tab, but what if you only need to visit for initiating new complicated projects?

Transportation costs can add up
A business that involves shipping would choose a new location primarily on access to good transportation arteries with low warehousing costs. Reno and Memphis are famous shipping hubs in the U.S. as they are centrally located for their respective East and West halves of the nation. A call center doesn’t need to ship anything, but there are still costs for moving workers around. Cab fare in Hyderabad is not cheap. If a Hyderabad software company pays worker’s transportation, it can add up, even if workers cab-pool. Transport is yet another factor in the pricing formula.

Labor costs are only about 20-30% of the total cost of outsourced work. The rest go to infrastructure, management, and other costs.

Please visit our Indian Software page.

About us

Categories: About Us | Tagged , | Leave a comment About Us is owned by the same individual who owns and  Incidentally, we also have a notary blog for which has a few entertaining entries for non-notaries.  We have been involved in internet directories since 2000 and its been challenging, but always interesting.  We have learned a lot in the last ten years, but the internet culture keeps changing, so we keep on changing with it.
The problem with internet marketing is that you are competing with the entire world.  If you are not one of the top few players in your industry, you will not get enough market share to have a business that is worth mentioning.  If you look at the search engines of the world, google gobbles up about 70% of the market share since they are so clever with their algorithms.  Yahoo gets about 20% of the market and the rest of the players share the remaining 10%.  If you feel you can’t be the absolute best in your niche, it doesn’t make sense to try to compete on the web. Our notary directory is the most popular of its type on the net.  Lets see if we can get the same results for our outsourcing directory.
The exception to this rule is local business who have a web presence to support their geographically relevant business.  If you run Joe’s car wash in Los Angeles, you don’t have to worry that Carl’s car wash in Seattle has a better web site than yours.  Just make sure that your web site is the most beautiful and best optimized in Los Angeles. 
The biggest changes that have happened that effect us in web business is that optimization algorithms for google have changed.  Meta-Titles are more important, meta-descriptions are less important, and social media is the magic that makes things happen.  Since we started our twitter and our blog, our placement on google for our outsourcing directory has gone far up for our  main keywords. 
Twitter is our newest development on  Our social media manager Anthony has been publishing links to really interesting articles.  I’m personally reading all of the articles and learning a lot about the recent developments in the outsourcing industry.  We hope you will join us on Twitter.
We hope to grow into a huge business and we’ll let the forces of nature guide us in how we expand the business.  Size and refinement are the two biggest issues.  We have 1300 members now, but if next year we only have 1500, but 1500 really serious companies with great communication skills, the quality of the companies is what we are looking for.  Our job is to please our browsers, so if we make their query for quality companies a snap, the browsers will be loyal to us for life!

Marketing Your Outsourcing Company

Categories: Outsource Marketing, Semi-Popular | Tagged , , | 3 Comments

Marketing your outsourcing company – Basics
If you run a company that provides outsourced services or wishes to do so, it is critical that you know how to market your services effectively.  There are many different types of products and services that are typically outsourced. is familiar with services only, and specializes in promoting a dozen or so professional categories with their respective sub-categories.  There are many facets for marketing your business involving online promotion, public relations, customer service, and quality of service.  All of these aspects are critical and must be perfected if you intend to gain market share.  Being Visable helps you attract clients, but giving clients positive experience helps you keep them and get referrals.
Why listen to us? is owned by the same individual who owns which has been around since 2000 and is the prime venue for effectively marketing notaries public in the United States.  When it comes to internet marketing, we are experienced.  We have been outsourcing programming and other tasks for years and have some basic common sense ideas for what effectively helps a company function more efficiently and provide more desireable service to clients. 
Online Promotion
If clients can’t find your company, it doesn’t matter how good you are.  A good web presence makes you accessible to the public, but is only the seed in growing your business.  The truth is that most companies worldwide get most of their business from word of mouth, regardless of how sophisticated the technology they use is.  A small restaurant or a large international high-tech company get noticed primarily because of word of mouth.  If you have a base of satisfied customers, that base can grow with referrals and repeat customers to result in a much larger customer base.  But, to get your INITIAL clientele you need a good online presence as well as a comprehensive marketing mix appropriate for your company and industry.  This outsourcing blog intends to be very general in its approach, so please use a consultant for specific marketing tips.
Components of an Online Presence
A well designed, easy to use, informative website is where every company needs to start.  Websites get outdated in content and design every several years, so don’t be afraid to devote part of your budget to periodic or a regular schedule for renovations.  Typical characteristics of an old style website are pictures with faded colors, broken links, information that was from many years ago, and design styles that were popular in the 90’s.  Sites today use brighter colors, high definition photos, and cutting edge web design. 
Optimizing Your Website
Regardless of the quality of your site, you will not get noticed without a good optimization campaign.  Optimization is generally complicated and expensive.  Please  visit our SEO page to learn the basics of optimization so you will understand what SEO professionals are talking about when you contact them.   The basics are that certain pages need to emphasize certain keywords, and that internal pages need to be linked to each other in a way that emphasizes keyword similarities and user-friendly functionality.  Additionally, having supporting content from blogs, facebook, twitter, forums, and other social media is actually magical in terms of search engine performance.
Public Relations Outreach
One way a company can market themselves is to contact specific companies that could use their services.  Email campaigns are common ways for SEO and web design companies to do outreach.  However, emails normally get discarded if the sender is not known, especially with promotional emails.  Calling companies manually by phone can be an excellent way to attract new business.  If the employee making the call is polite and helpful, but not pushy, new clients can be obtained.  If you are serious about gaining a new client through outreach, its more effective to offer the prospective client something substantial for free.  A few hundred dollars worth of free services is a great way to woo a serious potential client.  Make sure they intend on spending at least a $500 per month for at least a year before you give them anything for free.
Customer Service
If your company offers a pleasant experience to your clients, you are more likely to accumulate long term customers.  Good customer service is critical.  The people who answer the phone should speak well, and emails should be returned quickly. Internal management should make sure that all job tasks are explained clearly to the workers, and that the output of the workers is scrutinized BEFORE it gets back to the client.  Make life easy for your clients even if it costs you a lot more.  They will remember you for this.
Quality Work
Doing good work is critical.  The speed and accuracy of your work makes or breaks your business regardless of how good your promotional stengths are.  All of the facets of a good marketing mix need to be balanced. If you are good at work but lousy at internet presence, you are compromising yourself. But, if you can be fairly good at all of the components mentioned in this quick outsource blog entry, then you stand a good chance of succeeding in the outsourcing world. 
Please see our other related blog entries to read more about customer service, double checking work, and more!

(1) If clients can’t find you, it doesn’t matter how good you are. A good web presence makes all the difference.
(2) Get your initial clients from the web & then get clients from word of mouth! (or word of mouse)
(3) Marketing your outsourcing company from A to Z

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Creating a vacuum in business’s online presence

Categories: Outsource Marketing | Tagged , , , | Leave a comment – Online Presence
Introduction is a relatively new outsourcing directory for outsourcing companies.  Due to the owners extensive experience in internet marketing over the last decade, we have been able to have a very successful and fast start marketing our site.  We used all of the basic techniques that we wrote about in our SEO section.  We optimized each page for certain related and important keywords, and then created an internal link structure to strengthen those pages.  Additionally, our new social media campaign has worked magic to gain us immediate results on google. 
We now show up on google on roughly four hundred keywords, and get excellent placement under many of our most relevant and critical keywords, especially:  outsourcing directory, outsource directory, bpo directory, kpo directory, call center directory, lpo directory, etc.  We are currently working on optimizing for roughly twenty other critical keywords.
Take Social Media, Mix With Water, Get Results!
The results of our social media campaign were so good, it reminds me of this joke by Yacov Smirnoff in the 1980’s.  I don’t remember his exact verbiage, but here is what I remember.
When I first came to America, I went to a supermarket.  It was so huge, much larger than small grocery stores in Russia.  Then I went to Aisle 1 and saw milk powder… mix with water… get milk.  Wow!!  Then I went to Aisle 2 and saw orange juice powder… mix with water and get orange juice.   Everything is so convenient in this country.   Then, I went to Aisle 3 and saw BABY POWDER and said, what a country!  I make big family today!
Social media including Facebook, Twitter, blogging, and forums improved our search results on every site we used it on.  But, the results were quick and only took a few weeks which is amazing.  Take social media, mix with water, get results! Its actually time consuming and complicated, not to mention expensive, but the results don’t take long to come.  Google places a heavy emphasis on social media because it shows that you are not only serious, but want to interact with the world around you.
We created an extensive pay-per-click account with google.  We are now visable under 400 keywords in various countries.  Our pay-per-click network gets us over one thousand visitors today, not to mention the traffic from our organic search results which are not excellent under many of our top twenty keywords.
Link Building
We are engaged in a link exchange program where we offer free listings on our outsourcing directory in exchange for a link to our site.  We are rapidly gaining more and more incoming links which strengthens our search results on google as well as incoming traffic.

Outsource Blog Welcome

Categories: Welcome | Tagged , , | 1 Comment

Welcome to the blog
Introduction is a directory of outsourcing companies around the globe.  We have many professional categories ranging from call centers, bpo, kpo, seo, data entry, web design, and software.  If you manage a company that would like to attract overseas clients, please contact us so that we can create a listing for your company. offers free and paid listings for every budget.  Paid listings show up higher in our search results and statistically gravitate a much higher market share.
Outsource Blog
Our outsourcing blog will concern itself with a wide variety of outsourcing issues effecting the global community.  The purpose of this outsource blog is to inform as well as entertain our readers.  We welcome commentary, so feel free to email us at if you would like to share an opinion, make a request.  Please let us know which topics you liked most, so that we can devote more time to writing about related topics.
Looking for Work?
123outsource does NOT hire individuals.  We are located in Los Angeles, CA USA and consist of the owner, one individual who makes outgoing phone calls on a part time basis, and a team of outsourced programmers in Pune, India who we intend to keep for the life of our business.  If you are looking for work, please call the companies listed on our website in your professional category and tell them you found them on  Please save your resume for companies who can potentially use you.
Topics Involved
This outsourcing blog will deal with topics such as: marketing outsourcing companies, algorithms used for choosing outsource companies, worldwide outsourcing trends, indexing new articles regarding outsourcing, improving your company’s interaction skills with overseas clients, and more.  Please ask us if you would like us to address a particular topic not already written about.
The Future of Outsourcing
We believe that outsourcing is a growing trend which benefits the whole world as it makes it possible to find the most efficient service provider irrespective of political and geographic boundaries.  Large companies have been moving towards a business model of focusing on their core competencies and outsourcing other functions to other companies throughout the globe creating a notion of a global workworce and global community.  It is interesting and fascinating living in these modern times.
We hope you enjoy our outsourcing blog!