The Inside Scoop on Manufacturing

Should you manufacture your invention overseas or is "Made in America" right for you? Our expert weighs the pros and cons.

Once you've decided your invention is a worthwhile product to take to market, you'll need some way to mass produce it. But where do you start? After all, 99.9 percent of us aren't in a position to open our own factory and manufacture our own product. (And even if we were, it wouldn't necessarily make good business sense.) Thus, it's necessary to "outsource" your manufacturing; in other words, find a factory that can produce your product for you.

There's a lot to manufacturing, and there are books devoted to the subject. This column will address some early concerns, providing an overview of the pros and cons of domestic vs. overseas manufacturing, and pointing the way to locating an appropriate manufacturing partner for either scenario.

Manufacturing, Defined
First, what exactly is manufacturing? Manufacturing is simply the process of making things. Companies manufacture nearly everything we consume in our daily lives. There are countless types of manufacturers who work with various materials: adhesives, electronics, chemicals, hardware, machinery, tools, metals, plastics, rubber and textiles, to name just a few.

These manufacturers and factories are located across the United States and all across the globe. There are definite advantages and disadvantages to pursuing either option. Let's first examine the factors that go into manufacturing domestically.

Manufacturing In the United States
There are obvious benefits to finding a factory in the United States. Without a language barrier, and with minimal time-zone challenges, working with an American company can reduce the frustration factor. In addition, delivery time-frames are shorter, order minimums are generally lower (which can be a big issue when you're just starting out), and you don't have to worry about the complications of customs and freight forwarding. Plus it can be comforting for a beginner to work with another party that's subject to the American legal system, with all the caution and mutual understanding that goes with it.

So why go outside the United States at all? While American factories have taken steps to compete on price with overseas factories, they typically can't meet or beat their prices. However, even though your per-cost unit may be higher, be sure to evaluate every factor to determine if it might still make sense to manufacture in the United States.

For instance, if you want a relatively small manufacturing run, paying more early on to a U.S. company might make sense because you can receive feedback and evaluate demand prior to saddling yourself with a huge inventory. In other words, you may wish to minimize your initial costs by ordering a relatively small number of units--say, for example, 200. Once you see the product's selling well, you may decide to increase your next order to 400 units. Then, once you've established your market--and you're producing much larger quantities--you may then consider manufacturing overseas to lower your production costs, thus increasing your profit margin and your overall income.

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Your Million Dollar Dream: Regain Control & Be Your Own Boss Tamara Monosoff is the author of Your Million Dollar Dream: Regain Control & Be Your Own Boss and The Mom Inventors Handbook, Secrets of Millionaire Moms, and co-author of The One Page Business Plan for Women in Business. She is also the and CEO of www.MomInvented.com. Connect on Twitter: @mominventors and on Facebook: facebook.com/MomInvented.

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