For your first run, there will be many obstacles to overcome from your designs and prototypes to a fully manufactured product. A few advantages of doing this locally are:
While all of these points are important, there are two big disadvantages of sourcing locally:
The obvious one is price: Due to the difference in labor and rent, the overall costs are generally a bit higher producing locally, even after taking shipping into account. The price differences are usually not significant though and given the time you are going to invest yourself, achieving quality results will be the biggest affect on your bottom line.
The more subtle but much more important factor is preparing for mass production: If you produce your first run locally you will be using local engineers, local technology, local machines, local language…. While technology can transfer, the way the factories are set up is often very different. Local factories generally employ more automated equipment to save on labor costs, so different tools may be created, and those tools used on different machines.
If you were to continue to mass produce with the same factory, then all of the investment with teaching that factory how to make your product and their work to troubleshoot the manufacturing process would remain intact, but if you transfer your production to a new facility with different tools, different machines, a workforce that speaks/reads a different language, then all of the work you are investing in to write SOP’s and inspection guidelines, build tools for automated machines and so forth, is often lost. There is a lot of human and machine “training” (ie. process parameters) that goes into manufacturing a product and you will need to reinvest this time and money if you transfer your production to a facility in China from your local supplier.