You're watching...
Ben Kaufman, whose company is set to make $25M in 2012, on moving manufacturing from China to the U.S.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
When you think of manufacturing something inexpensively most people automatically think of China.
It's become synonymous with making things on the cheap and has helped countless American businesses keep costs down.
But things may be changing along with increased cost there seems to be a renewed interest in tried.
In just three simple words made in America.
25 year old -- -- -- Bank Kaufman says there is increasing value in making things in the US.
That's why is consumer products company court -- which is set to -- in 25 million dollars in revenue this year.
Is moving some of its manufacturing out of China.
And back into the United States -- here to discuss the move today and thank you so much for being here thanks so can we first talk about you started quirky in 2009 corrects did.
And did you always manufacture and China.
-- of course is my third company and in manufacturing in China since.
Are very early in 2005 so been out of for quite some time but.
But court in -- is beginning -- and even up to just a few months ago China was the place OK and and what's changed.
What's changed is our ability to to do stuff here.
Our ability to find suppliers that are are willing to work with young -- companies like cars and and advancements in robotics and all of these types of things.
That are allowing us to build really -- products right next door.
And there also increase cops can you talk to me a little bit about that yeah I mean I've watched it first hand China has increased labor costs something like fifteen to 20% every single year compounded year after year.
Of of doing business over there.
And does sooner or later that adds up and and the value -- getting.
In in doing business there plus traveling there and babysitting.
And all the stuff -- outweigh the the increases in costs or experiencing so.
What about increased freight costs is that something that is could be of it problematic totally like -- -- -- real numbers on and so we looked in in in the very beginning of this year I was like okay maybe it's time maybe the tides are shifting.
And I looked at our financials and realize that 30% of our costs 30% of the cost of any given product that we sell.
Is in intangibles.
Right it's in free it's in the labor it's in like handling duty all of these different things that no one overseas is not doesn't actually.
Doing dude making a great -- he goes into all the things surrounding the product and that's when I -- to realize that.
-- -- an awful lot of money just doing business there and so even if things are slightly more expensive here.
We might be able to make it happen.
Data for September shows that manufacturing in China is -- -- do you think of that.
The economy's slowing managing things that could be an opportunity for you -- do you think.
You know people are getting out for -- reason.
You know one -- one of two things are gonna happen right number one is they're gonna get competitive again and they're gonna get scrappy and and and start to lower their prices.
-- they're gonna realize that they have pretty big economy on their own they have.
Couple billion people to to keep happy and those -- selling to themselves.
And -- become a consumer economy not necessarily -- economy.
But the conventional wisdom is that it's more expensive to manufacture an.
In the United States is that is not not true.
So the upfront costs are a little bit higher right tooling -- and setting up lines in manufacturing plants like this this is still more expensive here.
But we have much better robotics we have much better abilities to automate production lines and things like this that are.
Allowing certain categories of business to be really competitive so what indicating that the US does better than China.
I think we have a better sense equality.
-- we have a better sense.
How product would actually be used in the marketplace.
And I think we have a better sense of how do you generally billed -- eight.
Lasting partnership right when we -- manufacturers.
In the US it's more of let's help each other build really great businesses.
When we work with manufacturers in China.
It's more of like it costs 85 cents and it costs 85 cents and and you know we don't really care -- making money or not this kind of thing like this is the attitude that they started to.
And to happen.
I think it's just.
People are starting to be curious and I think when Americans are curious amazing things happen.
-- we start to explore those curiosities and and change the way we do business so in the future you -- manufacture everything in the United States that's my goal.
My goals to make every -- product here -- takes quite some time but.
I think to be great.
And thank you so much for coming in I appreciate it thanks.
