4 Pros and Cons of Manufacturing Your Own Products (Plus Crucial Tips)

Last Updated: 

January 9, 2023

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Lots of businesses choose to only handle the design side of the product development process, while outsourcing the actual manufacturing to a third party.

But what if you wanted to take this in-house? There are upsides and drawbacks aplenty, as well as mistakes to avoid and precautions to adopt.

Pro - You’re in the driving seat

Taking total control of a product from conception to release is a thrill, and also means that you can ensure that quality standards are reached and targets are hit without having to trust another company to live up to expectations.

From the initial designs to the branding and marketing, checking that each stage is aligned with your ethos and company culture is only possible when you’re at the helm of the manufacturing.

Why control matters

The other aspect of being in charge of all this is that product development becomes more predictable.

Con – It’s expensive

There are additional costs involved in getting set up for a large scale production run. You need the space, the equipment, the additional staff, and the capital to cover expenses associated with housing and powering everything.

How to get a great value used CNC machine

Initial costs can be made more manageable if you are savvy with your spending. For instance, valuing used CNC machines over new models will mean that you aren’t paying above the odds for essential gear that will speed up production and serve your purposes efficiently.

Pro – It’s less complex

While the actual manufacturing might take time to perfect, once it’s up and running, you’ll be free of all the other administrative obstacles and costs that are involved in outsourcing.

For instance, if you’ve previously been working with an overseas manufacturer to supply your products, this will have come with expenses caused by shipping, supply chain delays, as well as all sorts of red tape and hoops to jump through. Producing everything in-house side steps these snafus, and helps you recoup some of the aforementioned costs.

Fewer steps means fewer chances for mistakes

Reducing the stages involved in getting a product into the hands of customers by manufacturing them yourself will also keep errors to a minimum, so long as you have the right processes in place to pick up on potential issues and maintain quality across the board.

Con – It’s risky

You’re more beholden to the success of a product if it’s being made by your own business, because without sufficient sales you’ll be stuck with all of the discussed costs for production, as well as the prospect of having to continue paying for everything even if revenue isn’t being generated as anticipated.

Assessing risk is important

Before you can make a decision to bring manufacturing under the same roof as the rest of your operations, you have to be confident that this is viable from a financial perspective. Researching the market, determining levels of demand, and looking at your likely sales over a given period will prevent missteps.

Key takeaways

There’s no question that while some businesses will thrive if they take manufacturing in-house, others will falter.

Even some of the world’s biggest brands outsource production, so it’s not necessarily a choice you only need to make because of the scale of your operations.

Ultimately this is a decision you have to take based on a lot of information gathering and research. Only when you have conclusively proved that there is more to be gained by taking the plunge than by sticking with your current setup can you do so with confidence.

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