Made in California: Our future, your future
In 2012, we finalized the design of our first product, the Nimble Classic. We struggled with questions about how much money we needed to raise, what our price would be, what our production capabilities were, etc. At that time, our workshop was small and we had no dedicated manufacturing equipment.
During that first year, my business partner John met someone in San Diego who owned a bicycle factory in Shanghai and they started talking about possibly doing production in China. I suggested sending them a sample to get a quote and see if outsourcing was an option. The quote was low enough and we made a sample test order.
While working on the first production orders and after many trips to China, we started thinking that we should just make our scooters right here in California. We were able to achieve good quality with our scooters, but had to be on-site to triple check everything. We found that with Chinese vendors, we were constantly struggling to work through language barriers, tooling issues, potential supply chain delays, and quality-checking problems.
Over the course of that year, we weighed the option of making our products in the US versus outsourcing to China. In the end, we decided to keep production here in the US.
Although the cost of production in the US seems higher at first, the benefits of staying in America are huge for small businesses. One of the main issues is inventory. If we had outsourced to China, we would have needed to order huge quantities of the same model and colors. However since we now make our scooters in California, our production runs are much leaner and we can change our colors and designs on the fly. This means our customers can chose from a large variety of colors and we have more flexibility to do custom orders.
The second major benefit, is improved quality. If we made our products in China, there would be a three month lead time, with at least a month’s worth of inventory in containers on their way to the US from China. If any quality issues were spotted or if design changes were needed to improve a product, we would have at least two months of inventory ruined.
By producing here in the US, we can make design and quality improvements DURING production. If we run into any quality issues, we can quickly make the necessary improvements and reduce the possibility of shipping low quality products. Furthermore, it helps keep our inventory levels low and makes forecasting future orders much more manageable.
Alix testing the Nimble XL steering with a hundred pound load.
A third benefit of making products locally is that we have far fewer transportation disruptions, shipping damages, and costs. Shipping a container from China can be stressful. There can be unforeseen delays, additional fees levied by US Customs, and you have tens of thousands of dollars tied up in inventory. Furthermore, there is always the chance of damage and theft of your product as the container moves through the long overseas shipping process. By building our scooters in the US, we simply do not have any overseas shipping issues. Our products are made here in our own facility and then shipped directly to our customers in the US.
After adding up all the actual costs of doing production, making products in China would only be slightly cheaper than simply making them in our own facility here in California. So for us, it was an easy decision to invest in the machinery, facilities, and people that are needed to make scooters here in the US.
Overall, we feel very good about being an American made company. Whenever possible, we build using locally sourced materials, parts, and equipment. Also, we are a veteran owned company. Beyond that, by building locally we feel comfortable knowing our products are made with good labor and environmental practices.
We realize that for many people “Made in America” is not particularly important or worth paying the extra money for. However for big ticket items, by purchasing a locally manufactured product, there are direct benefits for the customer. It is easier to get repair services and parts for products made locally. Also, for niche market products, it’s easier to have custom features made. Overall, you’ll usually save money in the long run for local service and parts.
To celebrate manufacturing in the USA and as we look for potential partners, our newest business partner is traveling across the USA from Pittsburg to California this February, stopping by on his way at incubators, bike shops and learning about some of the great manufacturing companies that he crosses paths with. You can follow Jonathan Akers via @bikestartup on Twitter.