China VS. U.S. Manufacturing
Published by Kenno on Jan 25th 2017
In late 2016, I had the opportunity to visit one of Hong Kong's largest factory trade shows. It was there that I found that minimum order quantities were as low as 1,000 pieces for products that cost as little as $3 per piece. That's around a $3,000 investment for a new branded product, and that includes packaging! What does all this mean? Manufacturing in China is cheap - really cheap. But what kind of product does it produce?
In the current age of globalization, developing countries, such as China, have the competitive advantage when it comes to producing commodities. These countries offer a low cost of labor, while utilizing advances in communication technology, which allows pretty much anyone to bring to market almost any product imaginable.
So, why choose to manufacture in China?
Basically, a lower cost is the only true benefit to choosing Chinese, or any offshore manufacturer over U.S. based manufacturing. As Entrepreneur explains, while domestic manufacturing costs could possibly be competitive in some situations, costs are generally less when manufacturing overseas. A lower priced product is appealing to customers, which, of course, is appealing to retailers, as well. Yet, what is being sacrificed for these lower prices?
As an advocate for Turtleback's success, I decided to follow up with one of the manufacturers from the Hong Kong trade show that I attended last year. I received samples products of the order that I placed and I was surprised by what I found. Some of the samples were good, but none of them were anywhere near perfect. They all needed modifications before they could be a product that would be high enough quality for our customers. These modification needs required communication with the manufacturer in order to requests design changes. However, what I found is that communicating our needs proved much harder than originally expected. Two months went by and we were still in the design process with this Chinese manufacturer. Even worse, we received a quote that our price per unit would begin increasing. How frustrating!
With overseas manufacturing comes a lot of downsides. One of the things that we experienced when attempting to manufacture in China was incredibly slow processing times, particularly compared to those we have experienced in the U.S. Our in-house designers listen to the input of our customers and create a new design, which can quickly be delivered to our domestic manufacturer for sample creation. Communication is clear and concise, a major benefit to producing domestically. When working with the Chinese manufacturer, we had very little control over the entire process, which is very different than our experiences domestically.
Bicycle Corporation of America (BCA), a company with factories in U.S. and China, has recently moved back ten percent of business to the U.S. due to spikes in Chinese wages. Perhaps overseas manufacturing is not quite as cheap as it once was? The major competition to Chinese manufacturing is automation. Companies like BCA have found that they would actually save money by manufacturing in the United States through using automation to their advantage. This in turn creates jobs and, ultimately, boosts the economy.
Full of frustration during the design process with the Chinese manufacturer, we filed our overseas experience away as simply an experiment. We quickly shifted our focus back to our in-house design and local manufacturing processes. When reviewing a sample product, quality is of unquestionable importance. Our customers come first and we will give them nothing less than a quality product, which is what we have found through U.S. manufacturing!
Chinese manufacturing did not work for us. We are proud to manufacture all of our products right here in the United States! We are a family owned company and we are thankful for the opportunity to create jobs domestically while producing quality products.
Do you love products that are made in the USA? Is there an American manufacturer who inspires you? Or are you an American manufacture? If so, I’d love to hear from you, drop me a note at firstname.lastname@example.org