The 5 Hidden Costs of Manufacturing Overseas That No One Talks About

Sean Weisbrot: What if bringing your manufacturing back to the US wasn't just a patriotic move, but a strategic one? Today I'm talking with Samuel Fish, the owner of Shield Security Doors and Shield Metalworks, who made the bold decision to bring his manufacturing back from Eastern Europe to American soil. We dig into how who gives you advice and when they give it to you can change everything. If you've ever wrestled with global supply chains and rising costs, or where to build long term. This conversation might challenge everything you think about your business. Stick around because the very first question I ask is probably the thing you've been avoiding. Is it really smart to manufacture in the USA after years of manufacturing in Europe? Why did you decide to move your manufacturing back to the us?

Samuel Fish: The biggest single reason for that was a principle that my father had always taught me, which was whenever possible. Manufacture your product. Produce your product where you sell it, and if you can follow that principle, you'll never go wrong. That's a lot easier said than done. That's a lot easier said than done with a high value product, like what I make as opposed to something that costs a dollar. But at the end of the day, it was about. Manufacturing where you produce and after a decade of manufacturing overseas that going well, sometimes, sometimes not going well and encountering all the problems that come along when it's not going well. I decided it was time to shift gears and, uh, move production back to the US uh, from Eastern Europe.

Sean Weisbrot: How many years was it from when he told you that to when you actually made the change

Samuel Fish: in 2019 with a previous supplier, things started unraveling really quickly. Effectively, the owner of the factory there was driving things into the ground for very complicated reasons, and as the main customer at the time, one of the main customers. Uh, I didn't have any control over what was happening. My father said to me at the time, if you want to be in this business, long term, open, open your own factory in the us. Find, uh, another company that you can buy and add your product as a new product line to it, but be in control. So the first time he told me that was in 2019 and when it finally came to fruition was late 2024.

Sean Weisbrot: So,

Samuel Fish: um, just over five years.

Sean Weisbrot: The reason why I asked that question is because I've noticed that I. When I give people advice, it typically takes them time to digest it and then act on it. Everyone's different, but I also find that this happened to me with my last team where I had a CTO, I had a product manager. I had a COO, I had a director, and they would all give advice. And sometimes I would take it to heart immediately and put AC put it into action. And other times I would take time to to realize, and sometimes it would take me hearing the same advice from someone I was interviewing a few months down the road to go, you know what? I should probably do that. Because now several people have told me to do it. And then when inevitably I realized that I should make that change and I put it into action, they'd go, why didn't you do this months ago? And I, I had the same frustration with people that I was mentoring or advising, but as I've gotten older, I've realized that people are just mentally at different places. So maybe you were too afraid to make the move or maybe you were too lazy to make the move. I, I don't know. What, what do you think was going on that made you kind of ignore that?

Samuel Fish: So I think it touches on two different aspects. One, like you experienced the messenger matters. I. You can receive the exact same message from two different people. It's gonna resonate coming from one, but not necessarily the other. So one, the messenger matters. Two, the timing matters. Uh, when, when my dad first told me this in 2019, I was not yet at a place confidence-wise to think I can do this on my own. I wasn't there yet. Uh, in my, my father passed in 2020, but so fast forward to 2024, and I still had that advice that he had given me four years earlier that I was, I was at a place in 2024 where doing this wasn't as daunting anymore. It wasn't as intimidating. So it was a combination of, of those factors. Um, I guess for you it's, it was, the messenger really mattering for me. My father was the best messenger. Just the timing of it wasn't there, uh, the first time around, but the advice still resonated five years later when, when it did matter and when I was ready to take that big step.

Sean Weisbrot: I think for me, the messenger part is. Like I, I valued those people. They were part of my team. Of course, you know, I was paying their salaries. Uh, if I didn't like them, if I didn't trust them, they wouldn't be part of the team. But I think hearing the message from someone that was doing a 7, 8, 9 figure business annually, it meant more because they had experienced it. So it was one business owner to another saying, Hey, I've been there, I've done this. This is what happens if you don't make this change. And where the team member, they haven't run a business before, they've always just been somebody else's employee. So they're looking at it differently. And so. It means more to me when someone who's also a business owner is saying it because I can trust that they've lived it and it was probably painful. And if I continue to ignore it, it'll continue to be painful for no reason. Yep.

Samuel Fish: Absolute spot on. You were getting the message from someone who you felt could relate to what you were going through and had already been through that tunnel once before and seen the light. So it, it, it, it resonated and, uh, and it was much more persuasive than coming from an employee who sees one sliver of it, even though they might actually be, uh, reading the tea leaves really well. And, and that is a, a vote of confidence in them as, uh, people that you've hired that Yeah, they could act, even though they hadn't experienced it firsthand, they could see where the road would lead.

Sean Weisbrot: So you decide to finally take your father's advice and move the manufacturing over to the us. How long did it take from the idea to actually go through with it to The first line was starting to be produced in the

Samuel Fish: US Total took seven months, maybe eight months. Uh, I made the decision and it was all, uh, going back to 2019. It was almost five years later to the day that my new supplier or my now my second supplier, started having their own very major issues. So it was almost five years to the day, and that was part of the reason why my dad's advice resonated so loudly in my mind that the timing of it. And from that point, from from when I decided like, okay, it's time to do this. Let me jump in with both feet. Uh, until we were up and running at this new factory in North Carolina was around seven to eight months, um, with a few fits and starts. But, um, that was roughly the timeline. This wasn't, uh, planned out for two years and gradually phased in. It was a lot more of a. Hair on fire kind of situation, like, I gotta get this done right away because I have a ticking time bomb overseas and I don't know when that bomb is gonna go off. So let me get this done as quickly as humanly possible.

Sean Weisbrot: Do you think it was a mistake to try to push that fast? Or did you, or did something bad happen in the process of making this move? I. Uh,

Samuel Fish: no, it was, it wasn't a mistake to push as quickly, if anything, uh, with more foresight, I would've started the process earlier and done it somewhat more gradually. Um, but the, the reality with my supplier overseas is that they were just no longer reliable and the. Things, orders weren't getting produced anywhere nearly on time. Uh, employees weren't getting paid. Uh, taxes weren't getting paid. It was a complete collapse, and I was having to prop them up financially. So I was having to take on all of the financial responsibilities, making sure that, uh, giving them an unsecured line of credit. To make sure that employees were getting paid or back pay something so that they wouldn't walk out because if they did walk out, well then I'm really up a creek because then there's no one, no one left to produce anything, and I wasn't ready yet. I wasn't at the stage yet where I could start producing myself in North Carolina. So there was an interim period there where it was cheaper for me to take a big financial risk by. Giving them a blank check effectively rather than rolling the dice and them potentially collapsing. And then I don't have a supplier any longer until I could bring my own factory online.

Sean Weisbrot: Was there ever a moment where you felt like the business was done?

Samuel Fish: Not this time around, but in 2019? Yeah, there was, um, I think this was March, 2019, and. I was very much contemplating, and I'd been doing this six, maybe seven years at the time, and it was my first time through the ringer. It was my first time seeing my supplier who I had relied on and who had been reasonably good up until then just fall to pieces. And to give you an example of how bad things got on on one trip over there. I had to go around with, with my engineer and with another guy, and we went to all the suppliers and I paid them cash. I was running to an ATM taking out cash to pay these suppliers in Eastern Europe. So that we could bring back the materials, the raw materials needed, the wood, the glass, the steel, the locks, bring it back to the factory so that they could complete orders because the suppliers weren't willing to deliver anything to them anymore because bills hadn't been paid in months. That time around, I very much thought, okay, maybe this is the end. What flipped the light switch for me is in the midst of this, I had a call from a, uh, a security agency for a foreign government, and we start a G seven country and we started talking about projects for gov for their government residences, and that was a wake up call to me. Because just at the time where you're at your lowest of lows in terms of not knowing what the future is gonna be, all of a sudden you get this amazing reminder and this amazing opportunity of wow, uh, this would be the most incredible project I've ever done. And that just reminded me that. I've gotten somewhere over the last six years. I'm building towards something here and I'm getting these calls right now about incredible projects, so that really helped. The timing of it couldn't have been better. That really helped fuel my confidence and my desire to keep going at that inflection point. That easily could have gone the other way. Had there been more bad news at that point?

Sean Weisbrot: Are you still getting calls from these foreign countries? 'cause you're saying to manufacture where you sell, but if you have demand outside of the US and you're only producing in the US then shouldn't you be manufacturing outside of the US as well to meet that demand?

Samuel Fish: So yes, we still do work for foreign governments. Um. Whether we were producing in Eastern Europe or we were producing in the us, oftentimes there's still foreign governments because there are 179 other countries in the world. And there we there here we're only talking about two. Um, so the export opportunities, however that you're touching on, uh, are, are more complicated right now manufacturing in the US in the current tariff environment, that is much less of an issue. I. Manufacturing in Eastern Europe where tariffs are not being imposed. So that's a, a, a big question as well. And it is hurting, um, the, the tariffs that, uh, the US government has imposed on foreign countries. And foreign countries have imposed reciprocally on us as well. That's very much hurting export. Uh, but there's a little bit of it. Um. Anywhere you go. Um, right now from the us if we were still manufacturing in Eastern Europe, we'd be getting murdered on tariffs right now. And the volatility of tariffs and how that changes almost on a daily basis.

Sean Weisbrot: What? Is hurting me, me is earning dollars and living in Europe and spending euros because a lot of people don't look at the daily or quarterly or long-term fluctuations of the dollar to the Euro or the pound to the Euro or the pound to the dollar, or the dollar to the Japanese Yen, et cetera. But if you are working abroad or you are doing business with different countries. You start to notice those things when they are in your face. Because when I moved to Europe, it was like 98 cents to a dollar, and right now one euro is a dollar 18, so everything is about 20 cents more expensive. Then when I got here, plus. The economy of Portugal has had massive inflation as well in the last few years. So I'm being hit with all of this inflation and the devaluation of the US dollar. And so every time I use my American credit card to buy something, I see I, I have two options. Do I wanna pay in USD or Euros? 'cause I have a USD credit card. And I don't have a foreign transaction fee, so I can hit the Euro button and I get charged a lower fee from the bank than the terminal. The POS terminal would charge me. But seeing the, the conversion on the POS terminal makes me sick. It's like, it's like 10 or 15 cents more. It, it's like a dollar 26, a dollar 27. It's almost a pound. It's almost a G, you know, one GVP to a dollar based on these PS terminals. So I can't imagine what businesses are dealing with trying to buy things in, you know, make things in dollars and then sell 'em to Europe where they're like, I mean, I guess Europeans would be happy, right? 'cause their dollars going further. But China does this as well, is devaluing their currency in order to make it more valuable for.

Samuel Fish: So the, uh, exchange rate. So if you go back almost exactly 24 months, I think it was summer 2023, the US dollar was on par, or there was a brief period where it was stronger than the Europe.

Sean Weisbrot: Yeah.

Samuel Fish: And that was amazing. But then the fluctuations, um, even just from a consumer standpoint become noticeable. And from a business standpoint. That's what I've always looked at as one of the very significant soft costs of manufacturing overseas, because you have to factor in, at some level, those currency fluctuate, those exchange rate fluctuations that are gonna affect your bottom line. At times, they're gonna help. At times they're gonna hurt, but either way, you've gotta build in. Some cushion in your margins that's gonna lead to slightly higher prices on account of manufacturing overseas. Uh, if, if you're calculating this, uh, comprehensively, looking at all of the real costs and things that could affect your bottom line, this is one of them and it's one that is often overlooked. When we think about manufacturing overseas, when everything can look really rosy because it's uh, 20% or 30% of the cost to manufacture overseas, but then you start adding up all these other little factors like exchange rate fluctuations, and it's not as amazing as it seems at first brush

Sean Weisbrot: and that tax.

Samuel Fish: That tax. Yes. But when it for export, you're typically exempt from it. So we never had to pay VAT, uh, on our orders, on our exports because they, if it's being exported, the government is happy. Uh, and the manufacturer gets the VAT back quarterly, I think it is, probably varies, uh, in different countries.

Sean Weisbrot: So you didn't have to pay that to purchase those goods. No,

Samuel Fish: no, 22% back. We didn't have to pay.

Sean Weisbrot: Okay, that's good. I was just talking with my accountant and I had some, some things for my, uh, European company and they're like, oh yeah, that gets taxed at 25%. And I was like, why? And they're like, because it does. I'm like, I didn't know that. If I knew that I wouldn't have bought it. And they're like, well, now, you know, they're like, you could always put the, the money back into the business in order to. Yeah, but I don't wanna put the money back into the business. It was profit,

Samuel Fish: it's a corporate version of, oh, someone goes to Europe on a trip and as they're leaving, they go to the VAT office, uh, to, or they, they put the forms in the mailbox to get all their taxes back for high value items that they purchased. It's the corporate version of that.

Sean Weisbrot: Yeah. I walk past the VAT return every time I go in and out of Portugal. I never keep any of the receipts and every, every time you buy something, they ask you, do you want to give us your nif, which is the Portuguese id. I was like, no, I don't really wanna do that because I don't wanna tell you the number. And then you have to sit there and type it in. It's like an extra 30 seconds. I'd rather just not, and apparently you can get refunds, but like I. Just don't wanna deal with it, honestly, because I'm like, what? It's like a few hundred euros every year. Like, do I really wanna put, you have to keep the receipts and then you have to show them the receipts. Like I don't wanna deal with that. So what has been the most rewarding part of having your company in the us being able to say we're made in the USA.

Samuel Fish: Over the years, we would, whenever I was on a sales call, a new project, about 50% of the time, maybe even more customers would say, where's this stuff made? And I would always open with, oh, it's made in Europe. Sounds pretty good. And then if they asked me, okay, where's it, it's made in Lithuania. It doesn't sound as. Uh, as appealing as made in Europe, but nevertheless, uh, for a lot of people, for a lot of American customers, it really mattered where it was being made and not necessarily that it being made in Europe was a deal breaker. For some it was, but at the time there was, there were no alternatives. No one else was gonna answer the same call for the same type of product, custom product that they were looking for and say, oh yeah, our doors and windows are made in the US Didn't, it didn't exist. There weren't any alternatives that could meet that criteria. So, uh, the most exci, the most exciting parts of it. Being able to answer that and being able to answer that, um, with a lot of pride, uh, because. These types of doors and windows that we make have never been made in the us. This is a very European style product and as you know, most apartments in Europe, whether you're Eastern Europe, Western Europe is a steel door with a multi-point lock on it and decorative skins. To make them look like nice wooden doors, whether it's painted or stained wood, whatever. This is normal in Europe. It is very not normal in the us. People look at those types of doors here and go, wow, that looks like a bank vault. So being the first ones to do this here is a great feeling. Um, the other crazy part of it that I never predicted. Uh, but got very lucky is our timing with regards to, uh, trade tariffs. We opened up shop in late 2024 and it was early 2025 that tariffs started being introduced. Had I've been three months later, six months later, uh, that would've hurt tremendously.

Sean Weisbrot: What are some of the other soft costs besides VAT Tariffs? Exchange rates?

Samuel Fish: So for manufacturing overseas one, and this is less even a soft cost, but lack of control if you don't own. The factory overseas where your product is being produced and 95% of the time, uh, you don't, they may have other interests. You may have, uh, intellectual property issues down the road. Uh, so not being in control of what goes on day to day, that's a huge one and one that I struggled with a lot over the years. Um, freight. Freight volatility, and we saw this a lot during COVI pre COVID. We, so we brought everything in by air freight and somehow I earned the title of being the largest air freight exporter out of Lithuania. Never a title I thought I was gonna have, but got it. Got there. Um, and we paid about a euro a kilo in air freight costs. Which pre COVID was pretty good at the peak of COVID that went up to 10 euros, a kilo that was no longer, uh, commercially viable, couldn't do it when you're transporting doors and windows, each one of which weighs hundreds of kilos. So that was one of the soft costs that. The, the volatility there in, and we also saw that in ocean freight, um, that was something that you needed to pad your prices because you didn't know where things would be on the day you needed to ship. Time change when you're working with, uh, a supplier overseas, whether it's in Europe, whether it's in Asia, it upends your day. You're waking up early or you're staying up late, uh, that has an impact on health, family life, wellbeing. It, it makes things a lot more challenging and oftentimes it makes decision making longer because it's not like, oh, right now it's, uh, 11:00 AM I'm gonna pick up the phone. Call my production manager, tell him X, nope, we gotta do this. Oh, you're sending him an email. And then he, maybe he's replying it the day after with other questions back and forth. That makes things a lot less efficient. So that time change, the travel overseas, uh, is exhausting, time consuming, expensive. Um, and lastly, when you are. When you run into issues, when you start having problems, because inevitably at some point you will have problems that need to be resolved and conflicts. And if you are working overseas in a foreign legal system, you are at a disadvantage. You're not as familiar with the legal system, you're playing on someone else's home turf, and that can be. A major disincentive. That is a, a, a major hurdle to overcome. You're having to learn about a foreign country's legal system in a foreign language. Yeah. You're hiring, uh, you can hire a local lawyer, but it's never gonna be the same as if you're operating on your home turf. So you're at a major disadvantage when inevitably, at some point there are conflicts, there are disagreements, something goes wrong. That's always gonna be part of business relationships.

Sean Weisbrot: What's the most important thing that you've learned in your life?

Samuel Fish: Say the obvious. So many of the mistakes and misunderstandings that happen on a daily basis, whether it's in communication regarding project details, or anything like that. For myself comes back to saying, oh, something goes wrong. And I'm think to myself, God, I wasn't that obvious. How did they not realize that? And so coming back to it and, and reminding myself, say the obvious state, the obvious. Even if you don't think it needs to be said, it costs you virtually nothing to say it. So state the obvious. Because it will save you a lot of headaches down the road. In those moments where it's obvious to you, it's not obvious to someone else, but if you say it, and even better, if you put it in writing, it's gonna save you a lot of headaches.