Why does it seem all the US suppliers are having constant stock issues?

Honeywell6180 said:

These companies should consider manufacturing their products in the United States, instead of having to import them from China. It starting to become a logistics nightmare.

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Unfortunately, there are no machines left in USA that can produce these heavy absorbency products. Most of USA diapers are low absorbency, cheap diapers for medicaid and nursing home and even retail store brands. So factories made decision that they needed to invest in new machines to make diapers as fast and cheap as possible in USA. Unfortunately, we don't have $50 million it would take to build a new factory here in the USA.

NorthShoreAdam said:

Unfortunately, there are no machines left in USA that can produce these heavy absorbency products. Most of USA diapers are low absorbency, cheap diapers for medicaid and nursing home and even retail store brands. So factories made decision that they needed to invest in new machines to make diapers as fast and cheap as possible in USA. Unfortunately, we don't have $50 million it would take to build a new factory here in the USA.

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Now I know what to invest in if I ever win the Powerball.

Honeywell6180 said:

These companies should consider manufacturing their products in the United States, instead of having to import them from China. It starting to become a logistics nightmare.

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It comes down to the price of shipping vs the price of labor. It's cheaper to import from China, where the labor is incredibly cheap. Take a major port city, like Guangzhou. The minimum wage there in 2017 was 18.3 Yuan/hr, or a mere $2.89 an hour.

Here, the federal minimum wage is $7.25 an hour and hasn't changed since 2009. That's about two and a half times more expensive labor than China. Sure, you don't pay as much shipping, but by the container, roughly 40,000-50,000 bags of diapers each, shipping costs to way down.

Now, that's just federal minimum wage. Let's say we want to open a factory in Detroit. In 2017, minimum wage was $8.90/hour. This year, it's up to $9.25/hour. That is 3.2 times the labor cost as China.

In 2017, the strongest manufacturing city was straddling both Illinois and Kentucky. In Illinois, the minimum wage is $8.25/hour.

Labor in the United States is very expensive. It's why many companies choose to manufacture their products overseas. In many cases, something "made in the USA" is merely assembled here. It's just not profitable to manufacture here.


https://www.forbes.com/sites/joelkotkin/2017/06/12/where-manufacturing-is-thriving-in-the-u-s/

https://wageindicator.org/main/salary/minimum-wage/china-custom


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NorthShoreAdam said:

...as fast and cheap as possible in USA.

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Sadly that seems to have become a life model as well as a business model here now :/

NorthShoreAdam said:

Unfortunately, there are no machines left in USA that can produce these heavy absorbency products. Most of USA diapers are low absorbency, cheap diapers for medicaid and nursing home and even retail store brands. So factories made decision that they needed to invest in new machines to make diapers as fast and cheap as possible in USA. Unfortunately, we don't have $50 million it would take to build a new factory here in the USA.

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I didn't even mention the initial investment to even open a factory.

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NorthShoreAdam said:

Unfortunately, there are no machines left in USA that can produce these heavy absorbency products. Most of USA diapers are low absorbency, cheap diapers for medicaid and nursing home and even retail store brands. So factories made decision that they needed to invest in new machines to make diapers as fast and cheap as possible in USA. Unfortunately, we don't have $50 million it would take to build a new factory here in the USA.

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It looks to me like those companies are set to founder eventually. Once families become aware that superior products exist for their loved ones, they will start buying them instead of using what the nursing home offers, regardless of import fees or tariffs. It amazes me why these companies that offer such inferior products aren't subject to lawsuits. A Pampers or Luvs Size 6 used as a pad is far more effective than any adult pull-on type garment. Back in the late 1990's, I tried some Wallgreen brand "briefs" that were thicker than what exists today, that were supposed to be "high absorbency". They turned out being a total failure. There actually has never been a machine in the United States that were capable of producing what we get from China.

Yooo said:

It comes down to the price of shipping vs the price of labor. It's cheaper to import from China, where the labor is incredibly cheap. Take a major port city, like Guangzhou. The minimum wage there in 2017 was 18.3 Yuan/hr, or a mere $2.89 an hour.

Here, the federal minimum wage is $7.25 an hour and hasn't changed since 2009. That's about two and a half times more expensive labor than China. Sure, you don't pay as much shipping, but by the container, roughly 40,000-50,000 bags of diapers each, shipping costs to way down.

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Minimum wage tends to come down to quality of life. Americans enjoy a pretty high quality of life compared to the average Chinese citizen. That's why you don't have to pay them as much in China.

People complain about the trade deficit, but what it's really doing is evening out quality of life, on a global level. Naturally people don't want to lower their quality of life so someone else on the other side of the world can raise it, but it's a system that's self-correcting. Higher cost of labor moves jobs overseas, increasing the trade deficit, which moves money out of country, which lowers their average quality of life. It might eventually even out. Countries combat this by raising import tariffs which skim some of the cost savings of outsourcing labor and return it back to the local economy. But then the citizens complain about the cost of foreign products going up. They don't see how this is all connected.