Overseas Manufacturing Rejected by Entrepreneurs Prone to Failure

Closed minded, short sighted entrepreneurs say “no” to overseas manufacturing citing the economy, the American dream, and “buy American” ideology.

On Friday, June 1st, 2012 ABC aired a re-run of a January Shark Tank episode wherein the inventor of a hide away rack for the beds of pick-up trucks defiantly would not accept advice to begin overseas manufacturing.

The Shark Tank investors, each very successful owners of American businesses that manufacture products overseas, had this to say about this inventor’s business model pertaining to overseas manufacturing. Watch the video…

Part of the inventor’s nobel cause was to avoid any overseas manufacturing of his product and “bring some jobs and some hope to my small town.” He steadfastly said he was not going to use overseas manufacturing even though the investor Sharks all insisted that he do so else they wouldn’t back him. In their wealth of experience and success they know that overseas manufacturing enables companies to bring quality products to the American market cheaper, and that American jobs are created or sustained by this practice.

The inventor admitted that he could not single-handedly save his local economy, but his goal seemed to be to make the product himself or find a factory local to his little town to produce it, so that he could create hundreds of jobs there for his neighbors. This short-sighted business plan failed to realize or acknowledge that outsourcing manufacturing to anywhere other than his own little town would have the same effect as overseas manufacturing would: no factory jobs created in his local little town. That’s not a bad thing because any success the product had, regardless of where it’s made, would bring other jobs to his town to support it and help him run the company. Apple was cited as proof of a great amount of American jobs created by products made in factories overeseas.

There was brief discussion about the possible consequences of manufacturing overseas, where labor is so much cheaper, such as poor quality control, stolen ideas, and patent infringement. The Sharks countered with reality: You cannot stereotype and state that overseas manufacturing is poor quality; and you can’t generally say that every overseas manufacturer will steal ideas; and you can’t imply that these things do not occur in America. In fact poor quality production and idea stealing happen in America too frequently.

Robert Herjavec said, “it’s a global economy…whether you make it here or you make it there, you build a successful business. It’s not about made in America because we’re all immigrants. We’d have never had the opportunity to come here if everybody thought that way.” Later Robert summarized, “Kevin [O’Leary] brought up a good point, If you could make it cheaper and build the business, would you do it? And [the inventor] said no.”

In a global economy, one has to think globally, incorporate a global sourcing model in order to compete and spread the making of the business around the globe if necessary.

Closed minded, short sighted entrepreneurs say no to overseas manufacturing.