Growing up as an American overseas, my natural inclination was to go directly to Asia to manufacture my products for Sand Shack. I was comfortable dealing with Chinese and Filipino manufacturers and the language and cultural barriers did not worry me. Since manufacturing my first product overseas in 2006 I have had no major issues with global outsourcing. But because of my familiarity with Asia, I have to admit, I never looked locally for manufacturers of the products I was looking to make.
Did I miss out on anything?
YES
By going directly to Asia I missed out on the opportunity to begin manufacturing smaller quantities of product to test the market with. By going overseas, I have had to manufacturer larger quantities of products, and some products that I made a large quantity of haven’t sold as well as I had hoped. As it is now, I’m stuck with some products that I wouldn’t have been stuck with if I had made smaller quantities with a local manufacturer. Also, by going directly overseas I have had to face the unavoidable fact that as an environmentally friendly company (Sand Shack), manufacturing products overseas and shipping them to United States is not entirely environmentally friendly. Shipping any large quantity of goods across the world leaves a larger carbon footprint than I would like to make – this may not be the concern for many businesses, but it certainly is for mine.
NO
By going directly overseas to manufacture my products for Sand Shack I have been able to grow my company at a faster rate. I am able to create a much more competitive and superior product and offer it for a competitive price. I have also been able to create a very lucrative wholesale program. If I were to manufacture my products locally I would probably not be able to grow my company as I have through wholesale avenues, instead I would have probably had to stick to a retail model or had significantly higher wholesale prices. As it is now, my wholesale prices are competitive and still profitable. Other than saving money, manufacturing my products overseas has allowed me to have sufficient inventory and meet all demands for my product. However, as mentioned above, manufacturing these larger quantities is a bad thing if it doesn’t sell.
In examining my experiences with overseas manufacturing, I can conclude that starting off a company by outsourcing production overseas is not always the answer for everyone. For me, it was the right choice, as I had the overseas experience and the vision for my company and knew that I could sell the products I was making. So before outsourcing, analyze your situation and compile the pros and cons of manufacturing your products overseas. And although I didn’t do this when I first started Sand Shack, consider looking for local manufacturers that may be able to handle your needs.
Photo courtesy of Travel Aficionada
{ 3 comments… read them below or add one }
I am not into businesses talk very much but the *common sense* rules and from personal observation says that manufacturing overseas provides more harm then good to both consumers and the environment.
For starters it’s MUCH more environ friendly to manufacture from home because you do not need to transport you’re products as large of a distance which leaves less *carbon footprints* as you put/stated it.
I know it’s not relevant but:
If we drilled for oil here in America think of how less/little oil will be spilled in the ocean via transport as a result of no oversea accidents and the poor fishes wouldn’t have to breath in that crap! But that’s a different subject I won’t/cannot get into here.
I just want to say we have safety techniques for drilling oil here in America where we can drill deep and go SIDEWAYS underground for MILES and miles without leaving oil spills.
Having manufacturing overseas provides less jobs here in America as all the local companies will go out of business putting/have put MILLIONS AND MILLIONS out of work which now they will have to flip burgers and ring cash registers in the service sector!
If you go into any department store and look at the back label of something/anything you’d be surprised at how LITTLE things are made in America as in nothing!
Here in America we have high-quality checking on how safe a product is compared and so does Japan which it’s part of their culture to take a lot of pride on what they make. *long story short*
Every product we have ever gotten from Japan has in most cases exceeded expectations of lifetime and I still wonder how they do it.
You WON’T believe all the news stories in the last 5 years alone on how products are getting recalled because of lead poisoning due to a lack of quality control/inspection checks in places like China/Kora.etc
Even *Thomas The Train toys* were recalled I heard once and I think it happened around one of the christmases causing frustration for many parents/children alike.
Remember China they don’t pay their works very high wages and in most cases NO WAGES AT ALL! Most just work for food/credit so they can get home to their family in one piece after working very long hours doing boring/tedious tasks.
They don’t really CHOOSE what they do/work unlike here in America which we are not becoming that much different either in the long run.
I am done with my little rant as I absolutely HATE IT when people say such lies at how oversea businesses are good when that’s a bunch of bull.
I also forgot to mention if the countries like China that are shipping us products ever have unstable wars/revolutions for more freedom/rights they will cease industry to all of us to serve THEIR PEOPLE first and that’s the way it should be because it’s their country and not ours.
MrData, I really appreciate your thoughtful comment here. You make a lot of good points but in my belief, you are incorrect in stating that Chinese workers “in most cases” make no wages at all. I think the globalization of the world has helped countries like China rise out of poverty by providing jobs and a source of income. Yes, they are not making as much as western factories may pay, but their cost of living is much lower. I for one, am happy to support overseas manufacturers and know that, yes, some factory boss is making a killing (which is the case for any successful owner/entrepreneur running a business), but the workers ARE getting paid and many of their lives are better because of the jobs a factory provides. You are right in stating that manufacturing overseas is not completely eco-friendly because of the transportation of the product over long distance, but at the same time you have to realize that local manufacturers in the US do not even make many of the products we as a nation consume. And, if they do, they are not at the price that anyone wants to pay. This is probably the biggest problem with outsourcing…and one I don’t have an answer to. Things you can do to assure you reduce your carbon footprint when manufacturing overseas is 1. control the packaging of your products to use the lease amount of plastic possible, or none at all 2. Make sure the factory you are using is in compliance to all environmental standards you choose to follow 3. Evaluate the pros and cons of overseas manufacturing…obviously if you can do it for the same cost locally, you won’t outsource.