3 of 4
BACK NEXT
Commodity cost crunch
Alden Mills
Founder, Perfect Pushup
Moved manufacturing to China in 2004.
Cost increase since then: 20%-30%


While steel and iron prices have surged more than 30% since 2007, oil and natural gas prices have skyrocketed even higher, doubling in the past 18 months. Companies that manufacture in China now pay more for both the raw materials of their products and to transport the finished goods back to the U.S.

In addition, the price of land on China's east coast is also on the rise: Rents are climbing rapidly in Shanghai, Beijing, Guangzhou and Shenzhen.

Mills manufactures his Tiburon, Calif., company's fitness equipment in two Guangdong province factories. Since moving his manufacturing overseas in 2004, Mills has seen costs jump. Perfect Pushup specializes in ergonomically correct workout-equipment handles made of metal and rubber; the rise in oil and steel prices has taken a direct toll on the company's bottom line.

"We go through exhaustive design analysis and limit the need for costly materials, while also maintaining functionality," Mills says. "Everyone has to get creative to keep costs in line."

NEXT: Slashing the trade surplus

LAST UPDATE: Aug 11 2008 | 8:04 PM ET
Sponsored by
More Galleries
7 lifehacks to eliminate your holiday hassle Whether curating the perfect gift or finding a pet-sitter, these startups offer time-saving services that might just seem like holiday magic. More
San Francisco: The best city to make things From electric motorcycles to death shrouds, San Francisco's manufacturing sector is booming. More
6 designers shaking up fashion These designers are changing the way we dress, accessorize and shop, from custom made-to-fit dresses to smart jewelry that's actually stylish. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.