Wow…100% positive feedback with rave reviews and $100,000 worth of transactions completed! Getting a reasonable bid form an overseas outsourcing firm with those kind of credentials certainly puts the minds of most first timers, seeking to outsource programming or web development, at ease. Considering that outsourcing your programming needs overseas can cost you as little as 25 cents on the dollar compared to using a U.S. based firm, peace of mind is very important to those looking to outsource one of their first projects. I mean who wouldn’t be weary… “You get what you pay for”, right?

But with a “perfect” feedback record and so many transactions completed successfully maybe I really am getting a great deal. If seeing a reasonable bid, from a company with credentials like the above mentioned example, would cause you to have the same feelings of ease, all I can say is… let the buyer beware!

It seems that some overseas tech firms use the following trick when it comes to getting new business. They create and maintain multiple accounts on the outsourcing websites they use. The outsourcing websites are places for people seeking to outsource work, and tech firms to meet each other, similar to the way that buyers and sellers meet on eBay. They also function similar to eBay in the sense that agreements made through the sites are somewhat binding with feedback acting as a large motivator for a successful transaction.

I first became suspicious of this technique when one of the overseas tech companies I was working with, would regularly refer to their business by two distinct names. By using this strategy of not putting all their eggs in one basket, the tech firms can spread out the risk of receiving negative feedback from a client.

If I were in their shoes and I had no qualms about using this technique I would even consider “priming the pump” by creating some fake transactions to build up my feedback. If the tech firm created some dummy accounts, and bought projects from itself, it could not only build up feedback in terms of number of projects completed successfully, but also in terms of total revenue.

A company with $100,000 in transactions completed with 100% feedback is pretty impressive. Assuming a 7% fee to the outsourcing website, $100,000 in dummy transactions would cost the firm $7,000. This yet another example of the perception vs. reality in effect. Believing that what-you-see-is-what-you –get when it comes to outsourcing feedback can cost you big-time.

My advice to all those seeking outsource their programming needs is to keep your projects small until you really master the art of outsourcing. Becoming proficient at outsourcing takes good negotiation skills and experience. If you have a project to be outsourced that has 25 parts I would advise you to resist the temptation to complete all 25 parts as once, especially if the parts can be broken down into freestanding groups that could function on their own.

Don’t get me wrong, outsourcing can be of great benefit to your business, all I am saying is, be careful.