Manufacturing Across The Pond

Ah yes, consumerism.

Several years ago I purchased a wonderful oversized lounge chair.  It has become my favorite destination to collapse into in the back yard, after a long day out in the field or the boat.  I have used it as a spare bed.  It’s adjustable, comfortable, sturdy, and will likely last forever.  Last week I went to that same store, to hopefully purchase another lounger to keep in my RV (yes, that Toy Hauler of mine that has had dozens of things go wrong right out of the dealers lot, and ongoing problems).  To my pleasant surprise, the same brand was at that store!  To my not so pleasant surprise, when I picked it up, it was much lighter, the fabric much thinner and the frame much less sturdy. It will not last forever.   And the price?  About 40% more than my original lounger.

How disappointing. My brand loyalty went right out the window.  Again.

Seems manufacturing and production has shifted into making the cheapest product the fastest, with little regard for product longevity, and the majority of it is done overseas.  Can’t even count how many outdoors products like flash lights, lanterns, camping accessories, and so on have literally fallen apart in my hands 6 months into the purchase. Not one product says “Made In America”.  What happened to quality made product, anyway?

Is there a global perception that consumers no longer buy based on performance and brand loyalty?  Are they really only surfing for the best “deal” of the moment, constantly brand hopping based on price, with no concern for long term use or where the product was made?  At least that’s what some experts claim.  If this is true, consider what that does to the American Manufacturer, if the cost to generate product continues to become higher than the price the market is willing to pay?  There are certainly many cases where it makes sense to produce product in other areas of the world, but is it the answer for everything?  Probably not.

Several weeks ago an old friend reached out to me, asking for support in boycotting products manufactured overseas. He admitted having had a hand in the developing of outdoors products in China, many years ago.  Today he is filled with regret, and a burning desire to spearhead change.  Who would have guessed, 15 or 20 years ago, that sharing some ideas would come to this? I remember those days well.  First one treestand manufacturer started manufacturing overseas.  Then another, then another….and pretty soon, you couldn’t find but a handful of treestands manufactured in the United States.  And just as fast as the origin of manufacturing changed, there became a need to develop an organization whose sole purpose was to protect those “manufacturers” from product liability, as more and more treestand accidents were occurring.

“You get what you pay for?”

The thing is, at the end of the day, what do foreign made product profit margins really look like? Weighing out the cost to manufacture in the USA, versus the cost to manufacture overseas.  As new businesses are developed, it’s easy to grab that international production referral, and jump on the import band wagon to produce a product at a profitable price point overseas.  But close scrutiny may reveal it’s not such a good deal after all.

There are many unique costs associated with overseas production that may prove “it’s a wash” at best to set up shop across the pond.  Sure, overseas labor costs are a fraction of the cost of labor in the states.  But it’s not that simple. Don’t forget the expense of having qualified experts on site to manage QA and general operations. Long distance management, especially without your own right hand man on site, can be highly stressful. You can’t just run down the hall to check on things—your livelihood is plugging along, thousands of miles away.  And about that QA?  Maybe materials are less expensive overseas, but what kind of quality do they deliver?

Consider my new lounger.  Or my new Toy Hauler–the plumbing began failing in the first year, the parts made overseas couldn’t survive traveling over the road (hummm, isn’t that what you do with an RV is drive it down the road?).  Just sayin’.

In addition, the entire process associated with importing of goods is complex, expensive, and sometimes unreliable.  What happens to your cost to do business, or your seasonal product, if your ocean freight container is pushed to the back of the list and doesn’t make the boat on schedule?  Your entire year can be held hostage by elements completely out of your control. Conversely, the cost to manage that piece of your business with a seasoned expert can destroy ROI in a hurry as well.  The way to capture your best CPP is volume.  VOLUME.  But after investing in it, and manufacturing it, where do you keep that volume?  Not completely factoring in the cost to store product until it hits the shelves will also skew your bottom line. From overseas, to customs, to rail, to road, to warehouse (or distributor), to storefront, to consumer.  Any problem along the way can wreck your year.  What else can go wrong?  Suddenly discovering you have invested in a great big “boat load” of poorly made product that you can’t sell.

I want a sturdy lounger.  I want a brand new camper I can feel safe using when I’m far away from repair resources. I want a treestand that won’t break out from under me.  I want to see products made with pride in the USA, bringing strength to our economy and helping to support our peoples’ wellbeing.

Are things like that important to you?

Do the math.  All the math.  There are communities all across our country begging for manufacturing opportunities, and willing to work with companies to bring them in.  Maybe it makes absolute sense to paddle over to a foreign country and build your mousetrap.  But you may find that it’s not such a good financial deal to manufacture overseas.  You may also find that you will gain a regime of loyal purchasers and a favorable reputation in the business community because your product is made in the USA.  The grass isn’t always greener, manufacturing across the pond.

 

Want help doing the math, or more information on offshore manufacturing feasibility?  Contact PR Brady AdVentures.

 

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Comments

  1. I have heard that some manufacturers are indeed coming back to the US because the savings on labor costs are being outweighed by all the other less obvious costs. But some of them are still trying to treat their workforce like the desperate overseas workers they exploited over there.

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