Abstract :
Offshore manufacturing may seem cheaper at first sight, but reality often works out differently. People forget that wage rates and taxes in countries like China and India are going up. The truth is that overseas sourcing isn´t the ´no-brainer´ that it was a few years ago. The paper explains how total landed cost can reveal the truth. The only true test of whether an overseas-sourced item is cheaper, argue its proponents, is to compare the cost of domestic production with the total cost of bringing the same item onto home soil - the overall ´landed´ cost, in other words.
