How Did Mass Production Affect the Price of Consumer Goods?

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Updated August 09, 2023
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Michael J Boyle
Michael Boyle
Reviewed by Michael J Boyle
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Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.
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What Is Mass Production?

Mass production is a set of manufacturing techniques that can greatly reduce the cost of consumer goods. Before the advent of assembly lines, standardization, and division of labor, goods were usually manufactured on a custom basis by skilled workers.

Once mass production was developed, consumer goods could be made for the broadest possible market. Anything consumers needed or desired could be made in larger quantities, and with lower per-unit costs. Eventually, economies of scale resulted in lower prices for the consumer without the manufacturer having to sacrifice profits.

A good example is the difference between factory-produced garments, compared to clothing that can be made to measure by a tailor. While clothes that are customized for the wearer may be a better fit, the services of a skilled tailor will cost much more than those that are mass-produced. Using modern assembly-line techniques, a factory of unskilled workers can produce thousands of identical outfits for a much lower price than a tailor.

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 is at high levels—manufacturers were able to mass-produce products, cut costs, and still make a profit.

Henry Ford and the Assembly Line

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 vs. Customization

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 only one Mona Lisa, but knock-offs can be created by any talented artist adept at copying the masterpiece.

How Does Mass Production Affect Workers?

Mass production tends to replace highly skilled workers with a large number of unskilled jobs with lower wages. For example, skilled woodworkers might go out of business due to the availability of low-price, mass-produced furniture. This tends to benefit unskilled workers at the expense of highly-skilled workers. However, there are also significant health consequences for workers in factory jobs, especially those without strong safety standards or pollution controls.

How Does Mass Production Affect Consumers?

On average, mass production tends to benefit consumers by offering more goods at lower prices. This can be a mixed blessing if those consumers are also low-wage workers, who may face precarity as a result of job cuts or layoffs. There are also health consequences, especially for consumers living near highly-polluting factories.

How Does Mass Production Affect the Environment?

Mass production often relies on industrial manufacturing techniques that may generate high levels of waste or pollution at a scale that is difficult to dispose of safely. It also requires high levels of energy input, requiring the use of fossil fuels. The increased energy use, combined with the increased consumption due to lower prices, has the overall effect of contributing to environmental damage and climate change.

The Bottom Line

Mass production is a set of industrial techniques that allows large numbers of identical goods to be created relatively quickly, eliminating the inefficiencies of producing similar goods by highly-skilled laborers. Although there are some downsides, a significant benefit of mass production is lower prices for consumer goods.