1) It is well hidden, but starting in 2005, the IRS added a nice little deduction for "domestic manufacturing". It starts out at 3% up to the lesser of: (a) qualified production activities income; or (b) taxable income for the taxable year - with the additional limit up to 50% of a taxpayer W-2. It jumps to 6% from 2007 to 2009, then 9% thereafter.

2) It looks like I'm going to get a deal in Russia due to the weak dollar. A lot of the cosmetics industry gets supply from Europe - after all the epicenter of much fashion related industry. The strength of the Euro is affecting profitability, however, so that a distributor came to me looking for a US (i.e. US dollar) source.

To put this in perspective: In 2000, the Euro was roughly equal to the dollar in rouble terms. Today, the Euro is nearly 50% more in rouble terms.