Many product-based U.S. businesses have historically outsourced their manufacturing overseas to save on production costs or because it was the only option for their particular kind of manufacturing. However, current challenges like tariffs, supply chain delays, and geopolitical tensions are prompting some business owners to bring production back to America.
One such business owner is Hans Dose, the entrepreneur behind the Tenikle tripod mount featured on “Shark Tank.” After tariffs made it increasingly difficult to manufacture his product overseas, Dose launched Stuff Manufacturing Corp (Stuff MFG), a silicone molding factory in California that could support his own production needs as well as other small businesses looking to partner with a U.S. manufacturer.
While domestic manufacturing isn’t always the cheapest option on paper, onshoring can provide stability for product-based companies and can add trillions to the American economy. Here’s what Dose recommends doing as you search for an American manufacturing partner.
[Read more: Successful Companies Manufacturing Products in the USA]
Consider the true cost of overseas vs. domestic production
Because startups often operate with limited resources, cost plays a major role in where they choose to manufacture their products. A study by KPMG and the Manufacturing Institute found that primary manufacturing costs such as labor, utilities, real estate, and corporate tax rates were often much lower outside the United States, which can make a quoted price from an overseas manufacturer seem appealing. But Dose said businesses need to calculate the full landed cost before comparing options.
“The quoted price from an overseas supplier is often not the final cost,” he explained. “Most overseas factories quote at FOB (Freight On Board), meaning their cost only covers the finished product, excluding freight, duties, tariffs, and even the interest cost incurred while the product waits to be delivered.”
There are also indirect financial risks, including quality issues, missed deadlines, or intellectual property theft. Dose described the higher price tag for a U.S. manufacturer.
[Read more: How to Calculate the Costs of Manufacturing a Product]
Moving supply chains domestically mitigates existential risk, decreases freight time and complexity, reduces intellectual property theft, and improves quality through better communication.Hans Dose, Founder of Stuff Manufacturing Corp
Educate yourself on your own production requirements
Before contacting manufacturers, small business owners should develop a basic understanding of the production process their product requires, said Dose. While you don’t need a full working knowledge of the engineering process behind your product, researching materials, production methods, tolerances, tooling, and expected output can help you ask better questions and compare quotes more accurately.
“Understanding the general requirements gives the business leverage where needed and often provides a simpler solution to the manufacturing process, helping suppliers understand what is really required,” said Dose, who recommended tools like AI and YouTube as good starting places for research.
Business owners should also calculate material costs and estimate how many parts can be produced per hour on a single production line. That knowledge makes it easier to compare quotes “apples to apples,” Dose noted.
Look for a collaborative partner
A domestic manufacturer’s technical capabilities matter, but their attitude does, too. Dose advised seeking suppliers with a can-do attitude who are willing to think creatively about how to make a product work.
“Often, a quotation request ends at ‘we don't do it that way,’” said Dose. “Suppliers in the USA who deeply care about their customers will think outside the box by bringing in other suppliers, tweaking the design or method, and … acquiring the necessary equipment to achieve the desired result.”
According to Dose, U.S. manufacturing can become more competitive when suppliers are willing to expand their capabilities and collaborate across the broader supplier network.
[Read more: Manufacturing Partner Terms to Know]
Trust your gut and keep moving forward
Finding the right domestic manufacturer takes research. Dose recommends speaking with as many suppliers as possible, both in the U.S. and globally, to understand pricing, materials, production capacity, and possible design improvements.
“Be open to showing your product to multiple engineers for feedback and suggestions on methodology or design changes,” he said.
Dose also cautioned against falling into the “NDA trap,” where founders are so focused on protecting their intellectual property through nondisclosure agreements that they can’t get the feedback they need to move forward.
“Trust your gut and don’t let the overwhelming decision-making process halt the speed of launching a new production line in the USA,” Dose said.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
Apply for the CO—100
Applications are now open for the CO—100 — the U.S. Chamber of Commerce awards program recognizing the top 100 businesses in America. If you’ve built something that’s driving real innovation and impact, this is where it gets recognized.