@MAKE – Made in China: The Case for and Against – by Bob Baddeley.
Manufacturing is risky for a startup. Tying all your resources up in product can be dangerous if your product isn’t manufactured right, or if it costs too much to manufacture. Managing risk is the most important part and the hidden costs of manufacturing overseas can completely eliminate the savings on paper. U.S. manufacturers can help reduce a lot of the risk for a startup, and offer experience and expertise that an offshore company cannot, saving money and producing a higher quality product.
For three months in 2012 I lived in Shenzhen, China, participating in a hardware startup accelerator HAXLR8R and trying to get my company Portable Scores off the ground. I kept a blog while I was there. The goal was to learn about manufacturing in China, pick out some factories, source our components, and get everything ready for when we lined up funding. What I learned during those three months was not just how to do it, but that there are times when you just shouldn’t do it, and for a startup, it’s not just about money, it’s about managing risk. Our plan right now is “Assembled in USA.”