Choosing Between In-House vs Domestic vs Foreign Manufacturing

Deciding Between In-House vs Domestic vs Foreign Manufacturing

Deciding where to make your product can be difficult especially in the world of trade wars that we live in today. We’re here to help make the choice a bit easier.



  • You can be your own low cost labor during low volume market testing
  • Easy to oversee and control manufacturing quality
  • Direct oversight of labor force
  • No need to pay for the profit of outsourced manufacturers
  • Investing internally increases business value
  • Less dependent upon external manufacturers
  • Ability to more easily pivot on a design
  • Not subject to minimum order volumes
  • Gain Made-in-USA (or your country) marketing opportunity
  • Avoid dealing with customs
  • Less dependent on foreign trade policies
  • Ability to make part-specific custom tooling
  • Strongest IP protection
  • Gain trade secrets protection from competition


  • High upfront costs for manufacturing equipment
  • Steep learning curve
  • Need to hire internal manufacturing staff
  • Need large sales volumes to utilize efficient manufacturing equipment
  • Not benefiting from decades of manufacturing optimization which has occurred at specialized factories



  • Faster and cheaper shipping
  • Easier to keep oversight on quality
  • Avoid dealing with customs
  • Less dependent on foreign trade policies
  • Support domestic manufacturers
  • Gain Made-in-USA (or your country) marketing opportunity
  • Increased IP protection


  • Typically more expensive than overseas manufacturing
    • Can be substantially more in some cases



  • Can be substantially lower cost
    • Substantially lower labor costs – slowly increasing to meet USA
    • Typically lower material costs due to government subsidized material
    • Lower trade costs due to currency value differences


  • Difficult to oversee and control quality
  • Manufacturers may not be subject to similar manufacturing and labor standards.
    • Leading to risk for greater pollution, reduced worker safety, and cut corners for quality.
  • Need to deal with customs
  • Substantially longer shipping times
  • Low IP protection
  • Greater risk of “copy cat” products showing up in the market

What Matters Most To Customers

In order to decide where to manufacture your product, its best to learn what your customers value. Are you in a market where customers are willing to pay 1.5x the cost of similar offerings for Made in the USA? Or are you in a market where cost the single largest driving factor affecting purchasing decisions?

Get out and talk to your potential customers and find out what they think. Perhaps even try pitching your product at different price points with and without Made in the USA to gauge reactions. Be sure to be skeptical of opinions, many potential customers may want to support Made in the USA products until they see the price.

Recommended Approach

You don’t need to only pick one option for producing your product over its entire life. We recommend initially manufacturing your MVP (minimum viable product) in-house at very small volumes to determine product-market fit. Once you have determined that you meet product-market fit, then it’s time to look at how deep your pockets are. Upfront costs are typically substantially lower for overseas manufacturing. This will also allow you to keep launch prices lower to be more competitive making sales a bit easier to come by. Once you’ve determined that your product has hit a home run, you can start investing in in-house manufacturing to reshore production while keeping costs competitive.

Find Your Manufacturer

When it’s time to find a manufacturer for your product, check out the following blog post.

ASR is a mechanical and aerospace engineering firm that specializes in engineering design and analysis. If you are in need of engineering services then contact us today to speak to one of our experienced engineers for a free quote on your project!

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