How Much Money Can You Save With Overseas Manufacturing?

A portion of the American public tends to think of overseas manufacturing in a negative light, but this perception, while seemingly patriotic, is economically misguided. There are actually many American beneficiaries to manufacturing in China, including business owners and the public itself.

Done properly, businesses can undertake overseas manufacturing without sacrificing quality, as some service providers exist solely to guarantee the craftsmanship of products manufactured overseas.

The public benefits in several ways.  By contracting manufacturing to an overseas location, businesses are able to offer their products at a more competitive price. This lower price means that more money stays in the consumers’ pockets. While many Americans may say they support products that are made in the U.S., most ultimately decide to make their purchasing decisions based on cost.

Manufactured products from Asia, especially if those items require repetitive motion or are labor intensive, can cost anywhere from 50%-80% of what they would cost to produce in the U.S. The argument can be made that limiting the manufacturing jobs in the U.S. also ultimately improves the economy by encouraging citizens to seek advanced degrees or to train and obtain employment in skilled services or specialized higher wage industries.

Business owners also benefit. They can stay competitive with low prices but still make a profit thus ensuring they can remain relevant and be a viable presence in the free market system. The lower cost associated with overseas manufacturing results in businesses that have more money to invest in research and development so that they can continue to create lucrative products.

While some may fault owners for cutting domestic manufacturing jobs, businesses can counter with the fact that low manufacturing costs allow them to hire more domestic workers with the technical skills and savvy to help with research, product innovation, sales and marketing. By committing to having products manufactured overseas, they are enhancing their ability to provide high quality skilled jobs to Americans. Sadly, for some companies, the only alternative to overseas manufacturing is to go out of business because they can’t compete.

Don’t let that happen to you. Contact ITI Manufacturing today!

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