How Did Mass Production Affect the Price of Consumer Goods?

Before the advent of mass production, goods were usually manufactured on a made-to-order basis. Once mass production was developed and perfected, consumer goods could be made for the broadest possible market. Anything consumers needed or desired could be made in larger quantities. Mass production resulted in lower prices of consumer goods. Eventually, economies of scale resulted in the most affordable price of any product for the consumer without the manufacturer having to sacrifice profits.

A good case in point would be the automobile and its predecessor, the horse-drawn carriage. There was never any form of mass production of the horse-drawn carriage. A carriage was made only if there was a person, company, or organization ordering it. Only then would the craftsmen who specialized in building carriages begin to create the vehicle.

Key Takeaways

  • Mass production enabled manufacturers to produce goods at a faster pace, distribute those goods more widely, and therefore increase availability and enable more sales.
  • Having more products available for sale on a wider basis, versus products made one-by-one for a specific customer, enabled manufacturers to ultimately cut costs.
  • With the impact of economies of scale—cost benefits companies enjoy when production becomes more efficient—manufacturers were able to mass-produce products, cut costs, and still make a profit.

Mass Production Definition

Henry Ford

Industrialization pioneer Henry Ford and his method of manufacturing motor cars changed everything. While Ford was not the inventor of the motor car, he is credited with developing mass production techniques, such as the assembly line, which have helped reduce production costs.

Instead of manufacturing a few units a month, Ford’s plants could complete hundreds of cars per day. While only the wealthy could afford the handmade carriages, cars became the ultimate consumer product due to affordability that gave greater mobility to the average American family of the early part of the 20th century.

This comparison still holds true today. Automobile brands such as Rolls Royce, Maserati, or Lamborghini employ modern-day craftsmen to create vehicles, making them the equivalent of the handmade carriages of yesteryear. Meanwhile, Toyota, Ford, and GM mass-produce cars, making them more affordable to the average consumer.

The market for high cost, rare, or even one-of-a-kind items, such as art or jewelry, remains active, despite the ubiquity of mass-produced items.

Mass Production

While mass production is now the norm for consumer goods, there remains a demand for handmade products at higher prices, which may or may not be of superior quality. Their attraction is the fact that they are not intended for everyone. Handmade cigars are sold at a premium, with prices much higher than branded cigars from other sources, for example. Yet the average cigar smoker may not be able to tell the difference between hand-rolled cigars and mass-produced cigars when taking a blind test.

Other products that are handmade rather than mass-produced and fetch higher prices – sometimes out of the range of the average consumer – include designer gowns, jewelry, and leather goods, such as shoes and bags. They have machine-made, mass-produced counterparts, and purists insist that it takes a trained eye to spot the difference.

About the only thing that cannot be mass-produced but is still in demand by collectors would be artwork, such as paintings and sculptures. While they can be reproduced and mass-produced, there can only be one original. There is, for example, only one Mona Lisa, but knock-offs can be created by any talented artist adept at copying the masterpiece.

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.