6 ms·

I often wonder if costs could be lowered for many of these companies if they would stop locating in some of the country's most expensive places to operate and f

by talmand 11y ago

I often wonder if costs could be lowered for many of these companies if they would stop locating in some of the country's most expensive places to operate and for their employees to live. I know the arguments about workforce availability and all that, but I've never seen a proper look into it.

Vivtek 11y ago
Yeah. MakerBot could easily move to Indianapolis, after all. Or even less expensive locations elsewhere in Indiana, for that matter. Brooklyn is one of the most expensive markets in the United States, yet Indiana has just as many qualified technical people. Perhaps more, to be honest. Purdue is a pretty fantastic engineering school.
- calbear81 11y ago
  Probably could make the same case for Detroit, get access to UofM students, plenty of large warehouse space, long history of manufacturing, dirt cheap houses, and of course... exiles that were priced out of Brooklyn.
  - Vivtek 11y ago
    Ooh, yeah, hadn't thought of Detroit - I'm from Indiana myself and the GP mentioned Indy, and away I went. Point being you could find much better locations than Brooklyn without going straight to China (while keeping your own self in Coolsville).
    - calbear81 11y ago
      The challenge is still that you can build ANYTHING in China and if you can get the same quality and lower prices significantly, why would you choose a middle of the road solution in the US? I think the cost differential still overrides any sort of boost you might have from having a Made in the USA stamp on the machine.
      - Domenic_S 11y ago
        > if you can get the same quality That's a pretty big if. But truth be told, most things don't need to be ultra-high-quality with ultra-tight tolerances.
        sokoloff 11y ago
        I'm pretty convinced that you can get any quality you're willing to specify, pay for, and inspect for in China. Where's your iPhone made? China gets a bad rap for the lowest, barely passable spec crap that gets made and sold by vendors seeking the lowest possible COGS. It's not that China can't make iPhones; it's that they get asked to make cheap shit in a lot of cases. And they can happily do that, too...
        Domenic_S 11y ago
        Sure, but there's the rub - how many iphones get made in a year? Your volume has to be stupid big to make high quality chinese manufacturing make sense.
      - Vivtek 11y ago
        Well, why aren't they moving their corporate offices to India or Thailand instead of Brooklyn? I mean, cost is the only metric, right?
jdietrich 11y ago
It still wouldn't help. It's cheaper to manufacture electronics in China even if the labor costs are the same. The logistics are vastly better over there. If you need PCBs or components, you can have them direct from the factory on the same day. If you have a production problem, you can get a specialist engineer the same day. If you need a new production line with 200 extra staff, you can have it up and running in two weeks. An established EMS company like Jabil has huge economies of scale and tremendous in-house resources. They have long relationships with suppliers and consultants. A startup can't possibly compete with that.
- melling 11y ago
  In other news, the driverless truck is going to automate a few million people jobs: https://news.ycombinator.com/item?id=11568699 https://news.ycombinator.com/item?id=11568699 Perhaps it's worth the effort to have some manufacturing and expertise in the US?
  - unchocked 11y ago
    The US manufacturing sector is huge, however it's concentrated in high value industrial goods that are generally invisible to the consumer. So what you're proposing, yeah pretty much doing that. https://en.wikipedia.org/wiki/Manufacturing_in_the_United_States#Size https://en.wikipedia.org/wiki/Manufacturing_in_the_United_St...
- xt00 11y ago
  Yea I've spent tons of time in China, and worked with a number of these ODM type companies and smaller factories, and the kinds of things they can get done in short times for small amounts of money is pretty amazing.. Basically why its so hard not to manufacture in china is because of the "factory engineering plus" kind of model. Basically you get low cost engineering work done by the factory to modify your plastic tool, tweak your PCB design, build test fixtures, setup test station software, etc.. Basically one person who knows what they are doing can essentially give a detailed list of instructions to a factory in china and they will just "make it happen" for a really good price.. Since there are so few factories in the US anymore, there are no engineers that work for the factories, so there are very few companies that offer engineering work for low cost, whereas in China the actual factory work pays for the salaries of the engineers. So, its hard to compete with that..
bardworx 11y ago
Makerbot Studio is in Industry City, where rent isn't exactly "expensive".[0] Rent (for employees) is also very accessible in the nearby area, nothing close to Manhattan or some swanky neighborhood in BK. (I live nearby) In my opinion, especially in technology, its just hard to operate at scale and not produce products in China. Not only is their labor force less expensive but the parts that you require are manufactured there as well. [0] : https://commercialobserver.com/2015/09/brooklyns-sunset-park-is-about-much-more-than-just-industry-city/ https://commercialobserver.com/2015/09/brooklyns-sunset-park...
- loucal 11y ago
  I was about to post this but you beat me to it, for context when people picture "brooklyn rent" they think williamsburg which according to trulia has a $3525 avg rent (http://www.trulia.com/real_estate/Williamsburg-Brooklyn/5274/ http://www.trulia.com/real_estate/Williamsburg-Brooklyn/5274...) as opposed to sunset park (the neighborhood which industry city lies) which it has at $1700, less than half. (http://www.trulia.com/real_estate/Sunset_Park-Brooklyn/5246/ http://www.trulia.com/real_estate/Sunset_Park-Brooklyn/5246/)
  - scurvy 11y ago
    Average rental price of $1700 is still pretty high compared to most of the US.
  - iask 11y ago
    I saw a posh house in Florida a few months ago for $700 a month. The whole house and yard space. 20 minutes from Miami. Weeks later I saw a one for $550 in North Carolina.
    - teknologist 11y ago
      My rent in Shanghai, China is more than triple this (2 bed apartment)
      - 11y ago
legitster 11y ago
I've always been off-put by American Apparel's "Made in Downtown Los Angeles". Like I'm supposed to be impressed by it. For Middle America, it might as well say "Made in Downtown Dubai".
- jessaustin 11y ago
  I'm reminded of the old Pace Picante Sauce ads, in which the crowd of homespun rustics would all cry out at once, "New York CITy?!?!" Coastals might feign confusion, but that spoke to lots of folks.
- goldbrick 11y ago
  I think that was a calculated move. The dirt farmers aren't supposed to like American Apparel.
mbostleman 11y ago
You don't have to locate in some of the country's most expensive places to operate, but you'll still be located in one of the world's most expensive countries to operate.
mifreewil 11y ago
There's no argument here for not relocating to an even less expensive geography than the one you've mentioned here.
tn13 11y ago
Honestly I dont see why and how Americans can do lot of those jobs. (de facto) Minimum wage in USA is around $10. You can hire an Indian or Chinese for an entire day for that amount and he will thank you. The fact is that average productivity of an average American is so high today that it does not make sense anymore for most Americans to do a lot of those jobs. This makes life difficult for some people at the bottom who have no skill and I think as a society we need to solve that problem. But I see government regulation and unreasonably high taxation as primary barriers to do anything.
iask 11y ago
Probably. But then there is shipping. If I may stray a bit. The price to ship a small package from Adafruit to a place less than 10 miles cost me around $10.00 - 4 days tops. I can make a similar purchase for a Chinese spoofed version and have it in 7 days, free shipping. I don't know how the heck the shipping from China is so cheap. While to ship anything inside the us is frigging expensive...to ship outside the us is worse. And we invented modern day shipping.
- TylerE 11y ago
  Locate somewhere near the population centroid, like, say, Oklahoma City and your avg shipping costs probably go down.
- dahdum 11y ago
  It's because the USPS is subsidizing the cost of that shipment. "The Postal Service is losing millions a year to help you buy cheap stuff from China" https://www.washingtonpost.com/news/storyline/wp/2014/09/12/the-postal-service-is-losing-millions-a-year-to-help-you-buy-cheap-stuff-from-china/ https://www.washingtonpost.com/news/storyline/wp/2014/09/12/...
- kbart 11y ago
  Slightly off-topic, but that's the real problem. How the hell are we (West) going to compete with China if shipping a small item in the same city, for example where I live now, cost 2-3 €, meanwhile the same item from China cost less and shipping fee to my door is 0! Ordering inside EU is even worse, it's common that shipping costs more than the item itself. Sure, it takes a while for order to arrive from China, but if I'm not in a rush, I don't mind that. I order a lot of mundane things from eBay/Aliexpress just because: a) no/small shipping fee b) it's faster and easier than to look for alternatives in physical shops. Postal system is what really needs an overhaul imho.
- ThisIs_MyName 11y ago
  Yep, ePacket is amazing.
taneq 11y ago
That's crazy talk. You must be located in Silicon Valley or Shenzen, nowhere inbetween. /s

by talmand 11y ago

Vivtek 11y ago

Yeah. MakerBot could easily move to Indianapolis, after all. Or even less expensive locations elsewhere in Indiana, for that matter. Brooklyn is one of the most expensive markets in the United States, yet Indiana has just as many qualified technical people. Perhaps more, to be honest. Purdue is a pretty fantastic engineering school.

calbear81 11y ago
Probably could make the same case for Detroit, get access to UofM students, plenty of large warehouse space, long history of manufacturing, dirt cheap houses, and of course... exiles that were priced out of Brooklyn.
- Vivtek 11y ago
  Ooh, yeah, hadn't thought of Detroit - I'm from Indiana myself and the GP mentioned Indy, and away I went. Point being you could find much better locations than Brooklyn without going straight to China (while keeping your own self in Coolsville).
  - calbear81 11y ago
    The challenge is still that you can build ANYTHING in China and if you can get the same quality and lower prices significantly, why would you choose a middle of the road solution in the US? I think the cost differential still overrides any sort of boost you might have from having a Made in the USA stamp on the machine.
    - Domenic_S 11y ago
      > if you can get the same quality That's a pretty big if. But truth be told, most things don't need to be ultra-high-quality with ultra-tight tolerances.
      - sokoloff 11y ago
        I'm pretty convinced that you can get any quality you're willing to specify, pay for, and inspect for in China. Where's your iPhone made? China gets a bad rap for the lowest, barely passable spec crap that gets made and sold by vendors seeking the lowest possible COGS. It's not that China can't make iPhones; it's that they get asked to make cheap shit in a lot of cases. And they can happily do that, too...
        Domenic_S 11y ago
        Sure, but there's the rub - how many iphones get made in a year? Your volume has to be stupid big to make high quality chinese manufacturing make sense.
    - Vivtek 11y ago
      Well, why aren't they moving their corporate offices to India or Thailand instead of Brooklyn? I mean, cost is the only metric, right?

jdietrich 11y ago

It still wouldn't help. It's cheaper to manufacture electronics in China even if the labor costs are the same. The logistics are vastly better over there. If you need PCBs or components, you can have them direct from the factory on the same day. If you have a production problem, you can get a specialist engineer the same day. If you need a new production line with 200 extra staff, you can have it up and running in two weeks. An established EMS company like Jabil has huge economies of scale and tremendous in-house resources. They have long relationships with suppliers and consultants. A startup can't possibly compete with that.

melling 11y ago
In other news, the driverless truck is going to automate a few million people jobs: https://news.ycombinator.com/item?id=11568699 https://news.ycombinator.com/item?id=11568699 Perhaps it's worth the effort to have some manufacturing and expertise in the US?
- unchocked 11y ago
  The US manufacturing sector is huge, however it's concentrated in high value industrial goods that are generally invisible to the consumer. So what you're proposing, yeah pretty much doing that. https://en.wikipedia.org/wiki/Manufacturing_in_the_United_States#Size https://en.wikipedia.org/wiki/Manufacturing_in_the_United_St...
xt00 11y ago
Yea I've spent tons of time in China, and worked with a number of these ODM type companies and smaller factories, and the kinds of things they can get done in short times for small amounts of money is pretty amazing.. Basically why its so hard not to manufacture in china is because of the "factory engineering plus" kind of model. Basically you get low cost engineering work done by the factory to modify your plastic tool, tweak your PCB design, build test fixtures, setup test station software, etc.. Basically one person who knows what they are doing can essentially give a detailed list of instructions to a factory in china and they will just "make it happen" for a really good price.. Since there are so few factories in the US anymore, there are no engineers that work for the factories, so there are very few companies that offer engineering work for low cost, whereas in China the actual factory work pays for the salaries of the engineers. So, its hard to compete with that..

bardworx 11y ago

Makerbot Studio is in Industry City, where rent isn't exactly "expensive".[0] Rent (for employees) is also very accessible in the nearby area, nothing close to Manhattan or some swanky neighborhood in BK. (I live nearby) In my opinion, especially in technology, its just hard to operate at scale and not produce products in China. Not only is their labor force less expensive but the parts that you require are manufactured there as well. [0] : https://commercialobserver.com/2015/09/brooklyns-sunset-park-is-about-much-more-than-just-industry-city/ https://commercialobserver.com/2015/09/brooklyns-sunset-park...

loucal 11y ago
I was about to post this but you beat me to it, for context when people picture "brooklyn rent" they think williamsburg which according to trulia has a $3525 avg rent (http://www.trulia.com/real_estate/Williamsburg-Brooklyn/5274/ http://www.trulia.com/real_estate/Williamsburg-Brooklyn/5274...) as opposed to sunset park (the neighborhood which industry city lies) which it has at $1700, less than half. (http://www.trulia.com/real_estate/Sunset_Park-Brooklyn/5246/ http://www.trulia.com/real_estate/Sunset_Park-Brooklyn/5246/)
- scurvy 11y ago
  Average rental price of $1700 is still pretty high compared to most of the US.
- iask 11y ago
  I saw a posh house in Florida a few months ago for $700 a month. The whole house and yard space. 20 minutes from Miami. Weeks later I saw a one for $550 in North Carolina.
  - teknologist 11y ago
    My rent in Shanghai, China is more than triple this (2 bed apartment)
    - 11y ago

legitster 11y ago

I've always been off-put by American Apparel's "Made in Downtown Los Angeles". Like I'm supposed to be impressed by it. For Middle America, it might as well say "Made in Downtown Dubai".

jessaustin 11y ago
I'm reminded of the old Pace Picante Sauce ads, in which the crowd of homespun rustics would all cry out at once, "New York CITy?!?!" Coastals might feign confusion, but that spoke to lots of folks.
goldbrick 11y ago
I think that was a calculated move. The dirt farmers aren't supposed to like American Apparel.

mbostleman 11y ago

You don't have to locate in some of the country's most expensive places to operate, but you'll still be located in one of the world's most expensive countries to operate.

mifreewil 11y ago

There's no argument here for not relocating to an even less expensive geography than the one you've mentioned here.

tn13 11y ago

Honestly I dont see why and how Americans can do lot of those jobs. (de facto) Minimum wage in USA is around $10. You can hire an Indian or Chinese for an entire day for that amount and he will thank you. The fact is that average productivity of an average American is so high today that it does not make sense anymore for most Americans to do a lot of those jobs. This makes life difficult for some people at the bottom who have no skill and I think as a society we need to solve that problem. But I see government regulation and unreasonably high taxation as primary barriers to do anything.

iask 11y ago

Probably. But then there is shipping. If I may stray a bit. The price to ship a small package from Adafruit to a place less than 10 miles cost me around $10.00 - 4 days tops. I can make a similar purchase for a Chinese spoofed version and have it in 7 days, free shipping. I don't know how the heck the shipping from China is so cheap. While to ship anything inside the us is frigging expensive...to ship outside the us is worse. And we invented modern day shipping.

TylerE 11y ago
Locate somewhere near the population centroid, like, say, Oklahoma City and your avg shipping costs probably go down.
dahdum 11y ago
It's because the USPS is subsidizing the cost of that shipment. "The Postal Service is losing millions a year to help you buy cheap stuff from China" https://www.washingtonpost.com/news/storyline/wp/2014/09/12/the-postal-service-is-losing-millions-a-year-to-help-you-buy-cheap-stuff-from-china/ https://www.washingtonpost.com/news/storyline/wp/2014/09/12/...
kbart 11y ago
Slightly off-topic, but that's the real problem. How the hell are we (West) going to compete with China if shipping a small item in the same city, for example where I live now, cost 2-3 €, meanwhile the same item from China cost less and shipping fee to my door is 0! Ordering inside EU is even worse, it's common that shipping costs more than the item itself. Sure, it takes a while for order to arrive from China, but if I'm not in a rush, I don't mind that. I order a lot of mundane things from eBay/Aliexpress just because: a) no/small shipping fee b) it's faster and easier than to look for alternatives in physical shops. Postal system is what really needs an overhaul imho.
ThisIs_MyName 11y ago
Yep, ePacket is amazing.

taneq 11y ago

That's crazy talk. You must be located in Silicon Valley or Shenzen, nowhere inbetween. /s