Quote Originally Posted by Desertboy View Post
At the moment I outsource a cnc contract to another company for a customer I deal with I intend to to take it in house but it's low volume custom parts. It will be very profitable to me if I CNC the parts myself but only because rarely do we make more than 2 of the same item.

My experience has been that setting up costs are high vs production costs so if I was to make 100 of the same item it becomes more profitable to outsource but 10 I should probably do it myself.

Outsourcing has both advantages and disadvantages and not everything is cost, Accuracy, quality of finish, reliability and just sometimes needing to get a rush job done are factors that need to be considered on a job by job basis.
I agree 100% with that reasoning. This is EXACTLY the reason why I am making these small things. Initially I outsourced, but actually only the first ten with an option of of a 100 more, but after the first ten I realized that it is not possible for me to make profit unless I make those parts, or order 1000 every time, which again was not possible because of the fairly low sales volume and because paying for 1000 is actually quite expensive and risky for me. So, after I sold the first ten and tested the market with them I decided that I will make those on my own. This decision was 100% right and because of that, I could even improve, make small changes and so on. That is NOT possible if you outsource, because every time you change something the maker will charge extra (rightfully) for the extra costs concerning machine setup or tooling changes. People who talk about outsourcing as an ultimate solution doesn't have a clue about what that means. Yes, outsourcing is fine in some cases, but would mean disaster in others. Of course, if I knew I will have a constant flow of orders and would sell hundreds every month then it would be different, but then I'd needed to set up a factory because I alone would not be able to assemble, test, pack and ship them out. So sure, outsourcing has advantages, but it is not for everyone and not for low volume production and sales.