Like many large corporations, small businesses have largely shifted their manufacturing offshore over the past 10 to 20 years. But the tide seems to be turning: U.S. companies small and large are realizing the benefits of making their products domestically.
It’s partly because the cost of manufacturing in emerging markets like China and India has risen as factories hiked their wages and shipping fees climbed due to surging gas prices. But many small companies have also discovered many drawbacks to producing overseas—including language barriers, shipment delays and production errors. U.S. consumers, in the wake of events like the Bangladeshi factory fire, are paying more attention to how—and where—their products are made.
Reverie, a small New York company that makes adjustable beds, found that the cost of transporting its beds from Taiwan became so enormous that it just made financial sense to “reshore” and start producing beds in a U.S. factory. “Shipping costs are tremendous,” founder Martin Rawls-Meehan recently told the Associated Press. “I could put that money into the manufacturing side in the U.S.”
Despite the interest in U.S. manufacturing, however, challenges remain for small companies. How does a small business find a U.S. factory at a reasonable price?
Some companies are trying to help. Maker’s Row, a Brooklyn, New York, startup that recently won $1 million in seed funding, is building a database that aggregates U.S. manufacturer information so that small businesses can easily find and compare factories. It’s starting with apparel and soft goods manufacturers, but plans to add other industries soon. U.S. manufacturers pay a fee to be included on the list.
"There’s a huge opportunity for brands to start producing here,” co-founder Matt Burnett told FoxBusiness.com. “Without a doubt, there’s interest in Made-in-America growing in the United States.”
Among all the other reasons U.S. manufacturing is becoming more appealing, there’s another: U.S. manufacturers are relying more on robots and high-tech production lines. While this won’t necessarily help prop up U.S. job numbers, it could help bring down the cost.
“Manufacturing is coming back, but it’s evolving into a very different type of animal than the one most people recognize today,” James Manyika, a director at McKinsey Global Institute who specializes in global high tech, told TIME magazine.
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