John Spencer

Mixed Prospects for U.S. Consumer Products, Durables Sectors

Steadfastmason, you have a good point, however, it is in fact cheaper to make the product in China, ship it here, and put it on your store shelf at a bargain price, cheaper than we can make it here. It is not just the cost of the manufacturing, but also the cost of the raw materials, which are also a reflection of wages in places like China.

The cost of any product (from economics books) is the sum total of the cost of all the wages that went into making it. I tend to agree with the, although there are some modifiers.

Let's assume the bowl is steel. The labor to punch it out might be 5 cents there, 10 cents here. You mentioned packaging. The cost of labor to package the bowl in a box let's say is cheaper there than here. The cost of the box itself cheaper there than here because the labor to make that box is cheaper. The cost of the steel is probably less there than here as the labor to make the steel there is cheaper than here.

The entire manufacturing life cycle of a product is a reflection of labor costs, all the way back to the cost to mine the materials to make it, or if it is made from recycle material, the cost to recycle it.

So, for us (US) to make a product cheaper on the store shelf than China, every aspect of the manufacturing of the product has to be looked and, and we should. One quick step we can do is to stop using so much packing material. Have you recently bought scissors? It comes in a heavy cardboard backing, with a plastic front face, all printed with expensive inks. And there is no way to even open the package holding the scissors without a pair of scissors. Hmmm. That packaging add bulk, so shipping is less efficient and a shipping container that holds say 100 of them is less efficient (bigger). Packaging can add 40% to the cost of the product or more.

Oh well, we have a long learning curve to go through, don't we.

Mixed Prospects for U.S. Consumer Products, Durables Sectors

Steadfastmason, you have a good point, however, it is in fact cheaper to make the product in China, ship it here, and put it on your store shelf at a bargain price, cheaper than we can make it here. It is not just the cost of the manufacturing, but also the cost of the raw materials, which are also a reflection of wages in places like China.

The cost of any product (from economics books) is the sum total of the cost of all the wages that went into making it. I tend to agree with the, although there are some modifiers.

Let's assume the bowl is steel. The labor to punch it out might be 5 cents there, 10 cents here. You mentioned packaging. The cost of labor to package the bowl in a box let's say is cheaper there than here. The cost of the box itself cheaper there than here because the labor to make that box is cheaper. The cost of the steel is probably less there than here as the labor to make the steel there is cheaper than here.

The entire manufacturing life cycle of a product is a reflection of labor costs, all the way back to the cost to mine the materials to make it, or if it is made from recycle material, the cost to recycle it.

So, for us (US) to make a product cheaper on the store shelf than China, every aspect of the manufacturing of the product has to be looked and, and we should. One quick step we can do is to stop using so much packing material. Have you recently bought scissors? It comes in a heavy cardboard backing, with a plastic front face, all printed with expensive inks. And there is no way to even open the package holding the scissors without a pair of scissors. Hmmm. That packaging add bulk, so shipping is less efficient and a shipping container that holds say 100 of them is less efficient (bigger). Packaging can add 40% to the cost of the product or more.

Oh well, we have a long learning curve to go through, don't we.