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I appreciate the well thought our response. I offer a counter on one point: "If you want numbers that can't be faked, inbound container counts at the port of

I appreciate the well thought our response. I offer a counter on one point: "If you want numbers that can't be faked, inbound container counts at the port of Los Angeles are up." There is a world wide glut of shipping capacity. http://money.cnn.com/2016/03/31/news/economy/china-shipping-slowdown/ http://money.cnn.com/2016/03/31/news/economy/china-shipping-... port of LA could still be up but perhaps it isn't really an adequate example to generalize. otherwise, I am in the same place. Sure, countries where production left due to labor costs will be able to compete again, and will enjoy some advantages around strong research institutions and being close to their markets, but its silly to think that China won't now have a strong consumer market to provide for, that they can't innovate, and that they can't have top tier research. I have lived in the US and China and I always get this feeling that Westerns think they have a monopoly on ideas and China has a monopoly on cheating/cloning/cheap. They are all wrong.

dmritard96 10y ago
also, I would love to offer some interesting numbers I manufacturer in china (https://flair.co https://flair.co) and just recently got some quotes from Bay Area Metal shops. A tool for metal stamping that costs me 5KUSD in China was quoted to me for 55KUSD in the East Bay. And, the 5K cost gets refunded to me after 40K pieces are bought... The notion that there aren't significant cost differences now is also misrepresented in the article. Sure, I would love to produce parts next to my apartment both because of convenience and proximity to my market (not because of bruhaha made in america nationalism nonsense) but it simply doesn't make financial sense.
- vinceguidry 10y ago
  So get that tool in China today because you need it today. The article was about the future. All signs are pointing to that tool costing you ~7.5USD in the US in the near-term future. With better shipping, support and logistics. The price differential is going to, at some point, matter way less than those other considerations and you may well decide to eat the entire $7.5K switching cost just to get access to them. I buy all my iPhones retail, for full price, from Apple. Of course China is going to win a bunch of price races today, it's like competing in swimming vs. Usain Bolt as a varsity college swimmer. Sure, you might win the first few races. But once Bolt gets serious, he's going to be able to level his skills up way faster than you will, even given your 5 year head start. His genetics are simply better. The US just has better DNA for commerce. Other countries can win battles, but never the war.
  - throwanem 10y ago
    > The US just has better DNA for commerce. Other countries can win battles, but never the war. As concise and positive a statement of religious faith as any I've ever seen.
    - vinceguidry 10y ago
      There's always a certain amount of faith involved in future-predicting. Show me a sure-fire way to predict the future in any better way, and I'll take that and make billions with it.
      - throwanem 10y ago
        If seeing what you want to see qualifies as prediction, I'd say you have it down pat. Congratulations in advance on your Thielesque attainment.
    - Spooky23 10y ago
      We're all riding on the shoulders of giants. The men who designed the postwar world were remarkably prescient in their engineering of affairs to benefit the United States. The US has another decade or two of riding that wave until things get hairy.
      - tracker1 10y ago
        The problem is the can-do, hardcore engineering types (particularly those without college training) are gone and supplanted by layers of bureaucrats and bean counters.
      - mooreds 10y ago
        Have you read "The Accidental Superpower"? Highly recommended. It covers the demography, geology and geography that guarantees the USA will continue to be the predominant power for the next 25 years, if not longer. Not sure I buy all his arguments, but definitely worth a read.
    - 10y ago
- bsder 10y ago
  > A tool for metal stamping that costs me 5KUSD in China was quoted to me for 55KUSD in the East Bay. And, the 5K cost gets refunded to me after 40K pieces are bought... Mechanical engineering in the US DRIVES ME CRAZY. For electrical, China is 1/2 to 1/3 the cost. They also horribly screw up 1 in 3 that you have to redo completely. This is fine if you have the time. Otherwise, you go domestic. Everything associated with electrical in the US understands that they are competing on turnaround, high-margin, high-value, and customer service. Yes, they're more expensive than China, but not unreasonably so. The mechanical stuff is just totally out to lunch in the US. My gut feel is that mechanical shops in the US are in two categories: 1) competent, and running at 100% capacity or 2) incompetent, and running at almost 0% capacity. This is a recipe for frustration. You either can't get time ot can't get knowledge. Consequently, all of the good electrical manufacturers I know have mechanical on site too (CNC milling, lathe, and probably injection molder). Even if it sits idle 95% of the time, that ONE time they need it NOW, it just paid for itself.
  - Animats 10y ago
    "My gut feel is that mechanical shops in the US are in two categories: 1) competent, and running at 100% capacity or 2) incompetent, and running at almost 0% capacity." Buying something mechanical in the US is disorganized. There's nothing like Alibaba's wholesale side, with a reputation system. There's ThomasNet, but it's just a big industry directory. There might be an opportunity here for somebody. But it's not going to be a huge business. Designing something to be injection molded is hard. There are lots of little things that run the price way up. There's "Injection Molding Part Design for Dummies", which is $495 on Amazon, but Proto Labs will send you a copy for free if you ask them. Incidentally, all TechShop locations have a small injection molding machine good for about one part a minute, and a CNC mill on which you can make a mold. They even have Autodesk Moldflow, which helps design molds using finite element analysis to predict what will work. So you can make prototypes and learn what works. If you're dealing with a mold-making shop, if you send them files in Inventor or SolidWorks along with a Moldflow analysis, you'll probably get a much better price. In mechanical, the more clueless you are, the more it costs. EMachineShop has a nice little CAD program which knows what their shop can do and will price the job. It will tell you if they can't make something due to some constraint (sheet metal bends too close, hole too deep, etc.) and gives hints on how to make the job cheaper. Those guys have been around for about 15 years, do a nice business, but haven't grown much.
- narrator 10y ago
  The greatest mystery in economics are things like this price difference. Why does one cost $5k and the other cost $55k? Some economics PHD should go and research into this and figure out why there's such a huge price difference. It would be interesting if they would go beyond the usual "just so stories" and simple answers and chase the numbers as far down as they can.
  - ComodoHacker 10y ago
    The answer in this case is indeed simple: cost of living. It's really about 10x difference.
    - narrator 10y ago
      Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper? What are they doing that makes everything so cheap? IMHO, this is really a phd thesis sized undertaking and would probably teach us a lot about the inefficiencies in our western system. It's also not just because they're underdeveloped. Some cities in developing countries, like Luanda, Angola, have some of the highest costs of living in the world.
      - usaar333 10y ago
        Land actually isn't that much cheaper, but the others are true. It also isn't a Western System issue; Japan is actually one of the most expensive countries in the world. A lot does come down to being underdeveloped. Or more specifically, living standards are lower, especially with the lower class (e.g. the poor in the US live far better than the poor in China). Take away all of developed nation's anti-poverty programs and minimum wage laws (that provide for floors on labor costs), combined with cost-inducing regulation that exists to protect human health and the environment, and yes, you would make products in the economy a lot cheaper.
      - nl 10y ago
        Note that Luanda is only outrageously expensive for ex-pats, if you want to live how you are accustomed to in the West. If you accept the lack of access to Western goods, then it is much more reasonable. Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper? What are they doing that makes everything so cheap? IMHO, this is really a phd thesis sized undertaking and would probably teach us a lot about the inefficiencies in our western system. Have you ever been to one of these places? People are much poorer, and the standard of living is much lower. Things like utilities often don't exist, or or much less reliable than in richer countries. Some things are cheaper: branded clothes and foods are generally priced beyond the means of most, so people don't buy them. Transport is cheaper, because people don't own cars - they walk, or bus, or share motor-scooters. Accommodation is cheaper on a per-person basis, because 6 people in a single bedroom apartment is normal. A few exceptions exist of course - the US health system costs a lot more than anywhere else in the world given the health outcomes. Places like Chile and Cuba pay a lot less for health care, but sit above and below the US on tables of life expectancy[1]. There are also things like extreme inequality in some countries which can cause other distortions. But there generally really are no secrets - they live cheaper because they are poorer. [1] https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...
- BaiduFu 10y ago
  For 3x vents and a puck unit, I'd owe you about $400 or so? I can find your unit off baidu, all in, for $150 (5 vents as well). I have no idea if the software is legit (meaning working, it's likely not "legit legit"). Did you send your firmware to China?
- YZF 10y ago
  Could you elaborate a little on what this tool is? Are you paying for design work or just manufacturing? Typically with non-trivial mechanical parts there are also jig design costs. If you're making a PCB then pretty much anything within the design rules goes through the same process. With mechanical parts manufacturing is more complicated. E.g. someone may need to figure out how to hold the part so it can be machined from different directions. If you specify tolerances then it can be a non-trivial exercise in how to sequence things to meet your tolerances. etc. The cheap part from China possibly includes significantly lower rent, lower salaries, cheaper equipment, no benefits for employees, no insurance, less concern for safety, some corner cutting, an easier regulatory regime (dump that acid down the drain?), possibly economy of scale now that they're doing so much manufacturing. At any rate, for low volume jobs where the overheads dominate and there's no special knowledge required there's no way the US can compete. Once volumes get up and/or there are some more complex specialized tasks the playing field is more levelled. The kind of manufacturing that Apple does where they have a room full of CNC mills making iPhone casings is not going to be that different. If there was sufficient business/margins in the lower end someone would invest in more automation to try and bridge the gap but most likely it's simply not worth it to participate in this race to the bottom. EDIT: Btw, cool product! Good luck with it.
  - Animats 10y ago
    When manufacturing people talk about "tooling", they mean custom stamping dies, molds for injection molding, and other one-off items used in making parts. These are complex, custom-machined items usually cut from hard metals and machined to tight tolerances. Designing them is tough, making them is expensive, and if there's a mistake anywhere, it's very expensive to correct. Take a look at some Youtube videos of progressive stamping for a sense of how ordinary metal parts are produced. Look at the elaborate custom tooling required. All the work is in the tooling. Once the tooling is right, the stamping process is simple and cheap.
- ascorbic 10y ago
  Here in the UK it's relatively common to get the tooling made in China but do the manufacturing over here. They're really good at making tools and yes a 10x price difference is not unusual. I find it a good compromise. The unit cost is higher in the UK, but that is wiped out at the low volumes I'm doing by the time and cost savings in QC and the PITA that is dealing with incoming freight.

dmritard96 10y ago

also, I would love to offer some interesting numbers I manufacturer in china (https://flair.co https://flair.co) and just recently got some quotes from Bay Area Metal shops. A tool for metal stamping that costs me 5KUSD in China was quoted to me for 55KUSD in the East Bay. And, the 5K cost gets refunded to me after 40K pieces are bought... The notion that there aren't significant cost differences now is also misrepresented in the article. Sure, I would love to produce parts next to my apartment both because of convenience and proximity to my market (not because of bruhaha made in america nationalism nonsense) but it simply doesn't make financial sense.

vinceguidry 10y ago
So get that tool in China today because you need it today. The article was about the future. All signs are pointing to that tool costing you ~7.5USD in the US in the near-term future. With better shipping, support and logistics. The price differential is going to, at some point, matter way less than those other considerations and you may well decide to eat the entire $7.5K switching cost just to get access to them. I buy all my iPhones retail, for full price, from Apple. Of course China is going to win a bunch of price races today, it's like competing in swimming vs. Usain Bolt as a varsity college swimmer. Sure, you might win the first few races. But once Bolt gets serious, he's going to be able to level his skills up way faster than you will, even given your 5 year head start. His genetics are simply better. The US just has better DNA for commerce. Other countries can win battles, but never the war.
- throwanem 10y ago
  > The US just has better DNA for commerce. Other countries can win battles, but never the war. As concise and positive a statement of religious faith as any I've ever seen.
  - vinceguidry 10y ago
    There's always a certain amount of faith involved in future-predicting. Show me a sure-fire way to predict the future in any better way, and I'll take that and make billions with it.
    - throwanem 10y ago
      If seeing what you want to see qualifies as prediction, I'd say you have it down pat. Congratulations in advance on your Thielesque attainment.
  - Spooky23 10y ago
    We're all riding on the shoulders of giants. The men who designed the postwar world were remarkably prescient in their engineering of affairs to benefit the United States. The US has another decade or two of riding that wave until things get hairy.
    - tracker1 10y ago
      The problem is the can-do, hardcore engineering types (particularly those without college training) are gone and supplanted by layers of bureaucrats and bean counters.
    - mooreds 10y ago
      Have you read "The Accidental Superpower"? Highly recommended. It covers the demography, geology and geography that guarantees the USA will continue to be the predominant power for the next 25 years, if not longer. Not sure I buy all his arguments, but definitely worth a read.
  - 10y ago
bsder 10y ago
> A tool for metal stamping that costs me 5KUSD in China was quoted to me for 55KUSD in the East Bay. And, the 5K cost gets refunded to me after 40K pieces are bought... Mechanical engineering in the US DRIVES ME CRAZY. For electrical, China is 1/2 to 1/3 the cost. They also horribly screw up 1 in 3 that you have to redo completely. This is fine if you have the time. Otherwise, you go domestic. Everything associated with electrical in the US understands that they are competing on turnaround, high-margin, high-value, and customer service. Yes, they're more expensive than China, but not unreasonably so. The mechanical stuff is just totally out to lunch in the US. My gut feel is that mechanical shops in the US are in two categories: 1) competent, and running at 100% capacity or 2) incompetent, and running at almost 0% capacity. This is a recipe for frustration. You either can't get time ot can't get knowledge. Consequently, all of the good electrical manufacturers I know have mechanical on site too (CNC milling, lathe, and probably injection molder). Even if it sits idle 95% of the time, that ONE time they need it NOW, it just paid for itself.
- Animats 10y ago
  "My gut feel is that mechanical shops in the US are in two categories: 1) competent, and running at 100% capacity or 2) incompetent, and running at almost 0% capacity." Buying something mechanical in the US is disorganized. There's nothing like Alibaba's wholesale side, with a reputation system. There's ThomasNet, but it's just a big industry directory. There might be an opportunity here for somebody. But it's not going to be a huge business. Designing something to be injection molded is hard. There are lots of little things that run the price way up. There's "Injection Molding Part Design for Dummies", which is $495 on Amazon, but Proto Labs will send you a copy for free if you ask them. Incidentally, all TechShop locations have a small injection molding machine good for about one part a minute, and a CNC mill on which you can make a mold. They even have Autodesk Moldflow, which helps design molds using finite element analysis to predict what will work. So you can make prototypes and learn what works. If you're dealing with a mold-making shop, if you send them files in Inventor or SolidWorks along with a Moldflow analysis, you'll probably get a much better price. In mechanical, the more clueless you are, the more it costs. EMachineShop has a nice little CAD program which knows what their shop can do and will price the job. It will tell you if they can't make something due to some constraint (sheet metal bends too close, hole too deep, etc.) and gives hints on how to make the job cheaper. Those guys have been around for about 15 years, do a nice business, but haven't grown much.
narrator 10y ago
The greatest mystery in economics are things like this price difference. Why does one cost $5k and the other cost $55k? Some economics PHD should go and research into this and figure out why there's such a huge price difference. It would be interesting if they would go beyond the usual "just so stories" and simple answers and chase the numbers as far down as they can.
- ComodoHacker 10y ago
  The answer in this case is indeed simple: cost of living. It's really about 10x difference.
  - narrator 10y ago
    Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper? What are they doing that makes everything so cheap? IMHO, this is really a phd thesis sized undertaking and would probably teach us a lot about the inefficiencies in our western system. It's also not just because they're underdeveloped. Some cities in developing countries, like Luanda, Angola, have some of the highest costs of living in the world.
    - usaar333 10y ago
      Land actually isn't that much cheaper, but the others are true. It also isn't a Western System issue; Japan is actually one of the most expensive countries in the world. A lot does come down to being underdeveloped. Or more specifically, living standards are lower, especially with the lower class (e.g. the poor in the US live far better than the poor in China). Take away all of developed nation's anti-poverty programs and minimum wage laws (that provide for floors on labor costs), combined with cost-inducing regulation that exists to protect human health and the environment, and yes, you would make products in the economy a lot cheaper.
    - nl 10y ago
      Note that Luanda is only outrageously expensive for ex-pats, if you want to live how you are accustomed to in the West. If you accept the lack of access to Western goods, then it is much more reasonable. Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper? What are they doing that makes everything so cheap? IMHO, this is really a phd thesis sized undertaking and would probably teach us a lot about the inefficiencies in our western system. Have you ever been to one of these places? People are much poorer, and the standard of living is much lower. Things like utilities often don't exist, or or much less reliable than in richer countries. Some things are cheaper: branded clothes and foods are generally priced beyond the means of most, so people don't buy them. Transport is cheaper, because people don't own cars - they walk, or bus, or share motor-scooters. Accommodation is cheaper on a per-person basis, because 6 people in a single bedroom apartment is normal. A few exceptions exist of course - the US health system costs a lot more than anywhere else in the world given the health outcomes. Places like Chile and Cuba pay a lot less for health care, but sit above and below the US on tables of life expectancy[1]. There are also things like extreme inequality in some countries which can cause other distortions. But there generally really are no secrets - they live cheaper because they are poorer. [1] https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...
BaiduFu 10y ago
For 3x vents and a puck unit, I'd owe you about $400 or so? I can find your unit off baidu, all in, for $150 (5 vents as well). I have no idea if the software is legit (meaning working, it's likely not "legit legit"). Did you send your firmware to China?
YZF 10y ago
Could you elaborate a little on what this tool is? Are you paying for design work or just manufacturing? Typically with non-trivial mechanical parts there are also jig design costs. If you're making a PCB then pretty much anything within the design rules goes through the same process. With mechanical parts manufacturing is more complicated. E.g. someone may need to figure out how to hold the part so it can be machined from different directions. If you specify tolerances then it can be a non-trivial exercise in how to sequence things to meet your tolerances. etc. The cheap part from China possibly includes significantly lower rent, lower salaries, cheaper equipment, no benefits for employees, no insurance, less concern for safety, some corner cutting, an easier regulatory regime (dump that acid down the drain?), possibly economy of scale now that they're doing so much manufacturing. At any rate, for low volume jobs where the overheads dominate and there's no special knowledge required there's no way the US can compete. Once volumes get up and/or there are some more complex specialized tasks the playing field is more levelled. The kind of manufacturing that Apple does where they have a room full of CNC mills making iPhone casings is not going to be that different. If there was sufficient business/margins in the lower end someone would invest in more automation to try and bridge the gap but most likely it's simply not worth it to participate in this race to the bottom. EDIT: Btw, cool product! Good luck with it.
- Animats 10y ago
  When manufacturing people talk about "tooling", they mean custom stamping dies, molds for injection molding, and other one-off items used in making parts. These are complex, custom-machined items usually cut from hard metals and machined to tight tolerances. Designing them is tough, making them is expensive, and if there's a mistake anywhere, it's very expensive to correct. Take a look at some Youtube videos of progressive stamping for a sense of how ordinary metal parts are produced. Look at the elaborate custom tooling required. All the work is in the tooling. Once the tooling is right, the stamping process is simple and cheap.
ascorbic 10y ago
Here in the UK it's relatively common to get the tooling made in China but do the manufacturing over here. They're really good at making tools and yes a 10x price difference is not unusual. I find it a good compromise. The unit cost is higher in the UK, but that is wiped out at the low volumes I'm doing by the time and cost savings in QC and the PITA that is dealing with incoming freight.