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Why More Small Businesses Are Manufacturing in the U.S.

domestic-manufacturingFor quite some time, the trend in business has been to offshore manufacturing. Cost savings has always been a driving factor in the offshoring movement; by relocating manufacturing bases to economies where labor is cheap, businesses were able to bolster their bottom lines and increase their profits.

But recently, the trend has been showing signs of reversing, among large corporations and small businesses alike. What’s behind this shift? What are the benefits of manufacturing close to home?

Rising Costs

One of the factors making “Made in the USA” a more attractive proposition for business owners is the fact that the costs of having manufacturing done overseas are rising. Labor in China, traditionally a hub of contract manufacturing, is not as inexpensive as it once was. Add in the costs of traveling to inspect the facilities, the rising tariffs, increases in shipping costs, and making goods in the U.S. starts to look even better.

Public Opinion

The recent economic crisis brought the problems associated with offshoring into stark relief. Manufacturing jobs were once a reliable source of living wages for many Americans. Take away those jobs and the economy suffers, making it less resilient to such crises.

More Americans are striving to make conscientious purchasing decisions, and many are willing to pay a premium for goods that were manufactured in accordance with their ideals.

A Nimble Supply Chain

When a business owner has to wait weeks for a shipment to come in, they run the risk of losing customers to faster competitors. Not only that, but offshoring manufacturing dramatically increases the amount of time it takes to take a new product from the design phase to the market.

Having the design department and manufacturing infrastructure under one roof allows businesses to respond to changes in consumer preference quickly. This is a definite advantage for clothing manufacturers, whose sales are very often influenced by rapidly shifting trends.

A Strong Economy

Small-business owners know that their products will sell at a faster rate if more people in their community have the money to buy them. By having their goods manufactured in the U.S., they contribute to a stronger economy, lower unemployment, and better potential for profits. True, each small business that does its manufacturing at home makes a small impact on the economy, but it all adds up. Here’s hoping the trend continues.

Author:

John R. Klaras is a serial entrepreneur and small business professional, a writer, and an educator by trade. With nearly a decade of experience in the telecommunications industry, he is currently in the process of building a burgeoning new microbusiness. He has written for leading companies in a wide variety of verticals, including travel, finance, motorsports, and real estate.