Small business investor and turnaround king Marcus Lemonis returns to CNBC's "The Profit," airing Tuesday at 10 p.m. ET, with some counter-intuitive insights for a struggling family business.
On this week's episode, Lemonis visits SWIM by Chuck Handy, a family-run swimwear business focused on plus-size customers. Founded in 2010, the company is losing money and can't afford additional inventory.
As he identifies crucial issues to be addressed, Lemonis zeroes in on the company's manufacturing process.
Currently, SWIM is having their apparel manufactured in China, at a cost of $15 per swimsuit. Lemonis encourages the family to switch to an American manufacturer, where suits will cost closer to $18 each to produce.
It's a move that will cost money upfront in an effort to save it in the long run.
"Most people would sort of scratch their head and say, 'Why would you spend more to make it here?,'" says Lemonis.
"I'll give you my answer: The minimums are lower, the lead times are quicker and you can put your hands on the process from start to finish. As opposed to, send it all over email to China and it comes back and hope it's right."
Instead of opting for the cheapest process, Lemonis emphasizes the value of saving time in transit and delivery and exercising more control over the quality and accuracy of the product.
"On the surface it sounds like a good idea because it's cheaper," says Lemonis. "But is it really cheaper? Once you go back and forth across the ocean to make any adjustments, and you don't get the product produced in time to meet the market, didn't time just really cost you money?"
CNBC'S "The Profit" airs Tuesdays at 10 p.m. ET
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