Manufacturing and creating products is not a new thing. There's no big secret here, but it is something that gets spoken about a lot. Largely because there are different ways to approach this business model. Today, we're tackling the topic of whether you should build and sell products from scratch or not?

Image Location - CC0 License

What does it mean to build a product from scratch?

In essence, you are the sole person responsible for creating this product. Well, the sole organization, but that's beside the point. The point is that you might purchase resources and supplies from other distributors, but the creation and manufacturing of the product happens at your hands. 

By contrast, a lot of companies will design a product, but outsource different elements of it to other companies. For example, when a company designs a new car, they don't handle every aspect of the manufacturing themselves. They may deal with metal fabricators that make the doors, another company that makes the chassis, and so on. 

So, there are two main questions to answer today:

• Can you make things from scratch?

• If so, is it profitable?

Making products from scratch

The short answer is that yes, it is possible to make a product from scratch. The slightly longer answer is that it really depends on what you are manufacturing. Let's say you run a business where you sell bracelets and necklaces that you make by hand. Here, it is perfectly possible to buy the materials you need and construct the products yourself. The same goes for furniture; you can make pieces of furniture with just the materials required - you don't need other companies to lend a helping hand. So many people run their own furniture business out of their homes or in a small workshop, by creating bespoke pieces that are handcrafted and worth every penny. As long as they have the necessary tools such as chisels, saws, and Edgebanding tools, for example, their work can be exemplary.

On the other hand, there are instances where it is almost impossible to create a product from scratch. Imagine you wanted to make a new smartphone can you create this all by yourself? Unless you are a tech wizard or have access to a tech genius, the answer is no. This is because many smartphone components are premade by someone else. For example, the processing chip will be pre-made, you just decide which one will be put in your phone. Most of the phones could be made by you, but the electronics will likely not be. 

The same sort of approach can be found across many industries and many products. The simple truth is that it isn't always possible for you to build products from scratch. In some cases, you need to get parts made elsewhere. 

Is it more profitable to sell products you made all by yourself?

Again, it's a yes and no answer here. It all depends on the products you're making! In theory, it can be more profitable to make things from scratch. This is because you're only paying suppliers for the materials you need. Any labor costs are your own, so you don't have to worry about them adding to the total cost per product. Whereas, when you get parts made by other companies, you obviously have to pay them for it - and they will charge set rates that take the supplies and labor costs into account. 

However, the big caveat here is that some products are simply too expensive or complicated to make on your own. To manufacture certain things, you might need to spend a fortune on resources and equipment. These costs can make the total cost per product rise through the roof, making it impossible for you to sell the products at a price that will generate profit. 

As a result, this is why a lot of businesses don't make products from scratch. Instead, they outsource to other manufacturers when possible because it could be more affordable. The cost of paying the other company is less than it would cost to make the parts they're after themselves. Overall, it's a simple case of running some calculations before you decide which approach to take. Will you be able to make your product from scratch, and how expensive will it be? Then, do the same equations but without building it from scratch. Which one comes out on top? The one that generates the most profit or can be built for the least amount of money should be the one you choose. 

With all things considered, it is possible and profitable to build and sell products from scratch. However, this is only the case for certain products. In many instances, it is more convenient and affordable to make things and rely on other providers to build certain parts, with your business putting everything together to create the finished product.