Reasons to Manufacture in the U.S. vs. Overseas

5 Reasons to Manufacture in the U.S. vs. Overseas

Because of strict labor laws, high educational standards, and the cost of living, amongst other things, the cost of running a business in the U.S. has become somewhat cost-prohibitive for American companies over the past several decades. As a result, companies have gone multinational, setting up corporate headquarters and manufacturing plants in foreign countries, and in some cases even shutting down their domestic interests. But there are still plenty of reasons to manufacture in the U.S. rather than moving operations overseas. Here are a few to consider.
Reasons to Manufacture in the U.S. vs. Overseas

  1. Quality control. To be blunt, it may be easier to find skilled workers in the U.S., where everyone has an equal chance at education through at least the high school level. And while university may be out of reach for many, community colleges and technical schools produce a variety of skilled professionals that go beyond the level of a high school diploma. But there’s more to it than that. When you choose to manufacture locally you have a better chance to oversee your operations in a direct way, ensuring that the quality you strive for is achieved.
  2. Competitive costs. Although there are still plenty of ways to save when it comes to overseas manufacturing, businesses are discovering that they might not really save that much, and there are a couple of reasons why. If, for example, you opt for cheap labor, you’re likely to get publicly lambasted for it, which could cause problems for your business. Besides that, the growth of manufacturing in countries like China has increased labor costs due to supply and demand. American wages and related costs, on the other hand, have not increased nearly at the same rate. So while you might still pay slightly less for overseas manufacturing, the gap has narrowed to make U.S. manufacturing closer to comparable. Then there are taxes, shipping costs, and sundry other expenses to factor in.
  3. Meet demand more quickly. Manufacturing locally gives businesses the ability to meet the demands of American distributors more quickly. When you don’t have to wait for your overseas warehouses to finish orders and ship them out, it’s possible that you could fill orders faster than competitors, making you a better choice for clientele.
  4. Incentives and tax breaks. The economy and the job market has been a major agenda item for the U.S. government since the Great Recession began. And the outcome has been increasing discussion and action in the way of incentives and tax breaks for businesses interested in moving their operations out of foreign countries and back to U.S. soil, bringing new job opportunities to American workers.
  5. Support the local economy. You might mistakenly believe that there is no upside to supporting the local economy and providing jobs for American workers. But whether you package frozen meals, you manufacture eye glasses, or you supply high definition plasma cutter parts to industrial operations, bringing your manufacturing business to the U.S. can have unexpectedly fruitful results. For example, you might be surprised how many U.S. citizens are keen to support brands that sport the “Made in America” label. It’s priceless PR.

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