Pros and cons of manufacturing in the USA vs. Overseas

Hey Robin,
Thanks for this great question.  This can be complicated so I am going to give you the short answer…..even thought it’s not that short!

Pros and cons of manufacturing in the USA vs. Overseas

Pros of manufacturing in the USA:

1. You can see/meet them face to face.
2. You don’t have to give a 30% deposit to start.
3. You can monitor the progress yourself.
4. You save on fed-x charges for samples and stuff.
5. You can usually make smaller quantities.
6. You might get faster delivery if it’s local.

Pros of manufacturing overseas:

1. You don’t have to leave your house to communicate with them.
2. Someone else (like your agent) is monitoring the progress.
3. You get a way better cost of goods.
4. You don’t have to order all the raw materials for your production.
5. You don’t have to stock raw materials.
6. They make all your hangtags and labels.
7. They make your packaging too.
8. You are not running all over the place fetching and well….fetching again.

Cons of manufacturing in the USA:

1. Costs of goods are usually much higher.
2. Materials can be out of stock (with no notice).
3. You have to run around to collect or order all the raw materials and get them to the manufacturer.
4. You have to stock the left over raw materials.

Cons to manufacturing overseas:

1. The minimum quantities can be larger than you want.
2. You have to give a 30% deposit to start.
3. You have to pay in full before it leaves the port.
4. Your risk for damages is closer to 1-3%.
5. It can take 2-3 weeks for transit and delivery.

If you decide to go overseas – be sure to vet your agent or factory.  Get references and check them.

Be sure to always get production samples from anyone you choose to go with. They MUST show you a perfect version of your product before you allow them to proceed.

I hope this is helpful in making your decision.

Written by Sarah Shaw

There are 4 comments

Robin Humphrey says:

February 4, 2010 at 12:21 pm

Thanks for the great reply! Having it laid out so clearly is very helpful.

Reply

Jenny Pavlovic says:

February 24, 2010 at 4:22 pm

Another “pro” of manufacturing in the U.S. these days is knowing that you’re providing jobs for your fellow Americans, instead of sending the work overseas. That’s why I’m making my new “Not Without My Dog” Resource & Record book (a journal-style book with photo pages, sealed pockets, tabbed pages and other features) here in the U.S. You can see a preview of it here:
http://www.8statekate.net/wordpress/?page_id=1542

I was told I’d have to go to China to make this book, yet found a way to manufacture it within 3 hours of my own house, with all components made in the U.S.A. The only components that don’t come from Minnesota are made at a woman founded and owned company in New York.

Jenny
http://www.8StateKate.net

Reply

Shah Emily says:

September 21, 2011 at 11:44 am

Thanks for the tips Jenny. I am a jewellery designer in Toronto, Canada and I am looking to have my designs replicated.

Although I initially considered producing my products overseas, mainly because of much lower costs. after some research I decided that I would love to “Keep it Community” . As you said it provides employment in our city/country and hence helps our economy.

So if anyone who is based in Toronto Ontario, is interested in supporting my expansion venture, please email me at info@3shahs.com

Shah Emily

Reply

Adriana says:

September 29, 2014 at 9:09 am

       Maybe next time someone could talk about how manufacturing jobs in America could help our economy and the value of the dollar. But, this was really helpful. Thanks

Adriana Gay

 

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