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Why didn’t someone just set up domestic manufacturing for those hobbyist parts?

Zigurd 2y ago
Comparative advantage
yapyap 2y ago
Is this sarcastic? It does read like it. I’ll take it on face value: Cause domestic manufacturing for hobbyist parts is not economically viable
- idiotsecant 2y ago
  I wonder how that additional cost breaks down. Is it mostly cost of labor? Supply chain access? Environmental controls and compliance? Other overheads not present in China? Is economically viable production possible in the US?
  - Aurornis 2y ago
    For hobby parts? It’s not viable because you’d be setting up a manufacturing operation to serve a small number of people. The fixed costs would be so high you’d never get it back. Contrast that with someone setting up an operation to serve the entire world, a market 1000 times larger than many localities.
  - michaelt 2y ago
    If you're smart enough to design and build a LIDAR, you're smart enough to make $200,000 a year working for the big adtech companies. You'd need an enormous hobbyist robotics market to be able to sustain a business making and selling $60 LIDARs with that wage bill.
jononor 2y ago
Sweden as an example is 10 million people. The world is 8000 million, 800x larger. The affluent parts of the world are somewhere between 100-1000 million, so the market potential is 10-100x larger. If one is able to address the global market, the economy of scale around manufacturing will be heavily in favor of that. This is particularly true for hobbyist stuff, because it tends to be both (relatively) low volume and low margin. And also price sensitive, in that people might just adjust their hobbies based on what is affordable/not. This is just demand side. Of course producing in Sweden will be more expensive than in China - for electromechanical things, Shenzhen is likely better on every single metric...
Aurornis 2y ago
Assuming this wasn’t sarcasm: For many hobbies the parts come from all over the world. You can’t expect hobbyists in every country to set up manufacturing for every part. Even if they did, the raw materials have to come from other countries. The machines probably come from other countries. Setting up little factories all over the world isn’t efficient so prices would be extremely high. Parts might be cheaper importing from other countries even with extreme tariffs. It’s all just a mess of bad policy. We lose out when governments restrict our ability to make small, simple purchases from other countries without heavy cost overhead.

Comparative advantage

Is this sarcastic? It does read like it. I’ll take it on face value: Cause domestic manufacturing for hobbyist parts is not economically viable

idiotsecant 2y ago
I wonder how that additional cost breaks down. Is it mostly cost of labor? Supply chain access? Environmental controls and compliance? Other overheads not present in China? Is economically viable production possible in the US?
- Aurornis 2y ago
  For hobby parts? It’s not viable because you’d be setting up a manufacturing operation to serve a small number of people. The fixed costs would be so high you’d never get it back. Contrast that with someone setting up an operation to serve the entire world, a market 1000 times larger than many localities.
- michaelt 2y ago
  If you're smart enough to design and build a LIDAR, you're smart enough to make $200,000 a year working for the big adtech companies. You'd need an enormous hobbyist robotics market to be able to sustain a business making and selling $60 LIDARs with that wage bill.

jononor 2y ago

Sweden as an example is 10 million people. The world is 8000 million, 800x larger. The affluent parts of the world are somewhere between 100-1000 million, so the market potential is 10-100x larger. If one is able to address the global market, the economy of scale around manufacturing will be heavily in favor of that. This is particularly true for hobbyist stuff, because it tends to be both (relatively) low volume and low margin. And also price sensitive, in that people might just adjust their hobbies based on what is affordable/not. This is just demand side. Of course producing in Sweden will be more expensive than in China - for electromechanical things, Shenzhen is likely better on every single metric...

Aurornis 2y ago

Assuming this wasn’t sarcasm: For many hobbies the parts come from all over the world. You can’t expect hobbyists in every country to set up manufacturing for every part. Even if they did, the raw materials have to come from other countries. The machines probably come from other countries. Setting up little factories all over the world isn’t efficient so prices would be extremely high. Parts might be cheaper importing from other countries even with extreme tariffs. It’s all just a mess of bad policy. We lose out when governments restrict our ability to make small, simple purchases from other countries without heavy cost overhead.