With Few Contract Manufacturers in U.S., Many Businessmen Turn to China’s Expertise and Scale
Here’ is a great article I read in the Wall Street Journal by James Hagerty. If you are looking to have a product manufactured, you’ll see why it is currently not as easy as we think to be “Made in the USA”.
Marshmallow Fun Co. designs and markets toy guns that shoot sweet, spongy projectiles 30 feet or more.
So far, though, the Dallas-based company has been unable to hit one of its targets: Making at least some of its “blasters” in the U.S. rather than relying exclusively on contract manufacturers in China.
“I salute anybody who’s making goods in the U.S.A.,” said Beaver Raymond, chief executive of the 10-year-old toy maker, whose products retail for about $20 to $28, “but it isn’t so easy.”
Mr. Raymond and other American entrepreneurs eager to bring manufacturing back to the U.S. often run up against an obstacle: Unlike China, the U.S. has few contract manufacturers geared up to make consumer products on a large scale.
Contract manufacturers make products for other companies that prefer to focus on product design and marketing. In China, “you can find a specialist in any product,” said Stephen Maurer, a Shanghai-based managing director at consulting firm AlixPartners. “You want a toaster oven? There are a dozen contract manufacturers that make toaster ovens. That kind of contract manufacturing just doesn’t exist anyplace else.”
That makes it harder for the U.S to revive manufacturing. It wouldn’t make economic sense for the U.S. to try to make everything at home, of course, but even a modest increase in domestic manufacturing would create jobs and skills that could fuel further economic growth. It also would reduce the chronic U.S. trade deficit. In 2014, consumer items accounted for about half of the $723 billion deficit on trade in goods.
U.S. manufacturing production finally crawled above its pre-recession level in October, but manufacturing employment is still about 10% below the tally before the recession began in December 2007………..