--- title: "MBA School Lesson:  The 10% Rule" description: The 10% Rule is an important concept in manufacturing. Elon Musk has done a lot to restore American manufacturing, and he really gets this concept. image: https://info.c-loans.com/hubfs/Industrial%20production.jpg --- [![c-loans-logo-2025](https://info.c-loans.com/hs-fs/hubfs/images/c-loans-logo-2025.png?width=183&height=86&name=c-loans-logo-2025.png)](https://c-loans.com) [Terms of Use](https://www.c-loans.com/terms-of-use) | [Disclaimer](https://www.c-loans.com/disclaimer) | [Blog](https://info.c-loans.com/) # Commercial Loans and Fun Blog ## [MBA School Lesson:  The 10% Rule](https://info.c-loans.com/mba-school-lesson-the-10-rule) Posted by [George Blackburne](https://info.c-loans.com/author/george-blackburne) on Tue, Jul 21, 2020 - [Tweet](https://twitter.com/share) I am looking for an expert witness in a commercial real estate lending case.  You will be paid an expert witness fee for your time, and qualifying as an expert looks great on your resume or your website.  [Here are the details](https://info.c-loans.com/looking-for-an-expert-witness-in-a-commercial-real-estate-lending-case). **Lesson From Business School:** Have you ever wondered why Elon Musk is so hell-bent on building new battery giga- factories all over the world so quickly?   [![Free Commercial Loan Software](https://no-cache.hubspot.com/cta/default/37671/91457cad-8798-4053-804b-fc684233b7cc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/91457cad-8798-4053-804b-fc684233b7cc)       [![Nine-Hour Video Training Course How to Broker Commercial Loans](https://no-cache.hubspot.com/cta/default/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f)   The reason why is because that manufacturers have learned that the more experience they garner in building widgets, the lower their cost of building each widget.   As they build widget after widget, they learn a little trick here and a shortcut there.  Pretty soon these little tricks and shortcuts add up to some real cost savings.  This leads us to The 10% Rule.    The 10% Rule: **Every time a manufacturer doubles the number of widgets that he has *ever* constructed, his cost to manufacture each widget falls by 10%.**  In some cases, his cost per widget falls by 15%.   [![Free Commercial Loan Placement Kit](https://no-cache.hubspot.com/cta/default/37671/882eb54a-a8b4-4c38-a2ed-605338b6f07a.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/882eb54a-a8b4-4c38-a2ed-605338b6f07a)       [![Huge Referral Fees! 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Their bread-and-butter D-Ram computer chips were as good as ours, and they were selling them at less than their cost.  "Dumping!" cried Texas Instruments, in a complaint and lawsuit before the Federal Trade Commission.  "They are bidding against us on big computer chip orders, and they are quoting prices that are lower than their cost.  They are dumping D-Ram chips at less than their cost, just to steal market share!"   [![List of Commercial Lenders 2,500 For Just $79.95](https://no-cache.hubspot.com/cta/default/37671/9488a761-b4e6-4b02-b82c-4ccc932612bc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/9488a761-b4e6-4b02-b82c-4ccc932612bc)       [![Banks and Credit Unions: Get 200 Free SBA Loan Leads](https://no-cache.hubspot.com/cta/default/37671/eb103ba9-3328-470e-bdda-e29c55be2881.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/eb103ba9-3328-470e-bdda-e29c55be2881)   *Oops.*  By the time the case reached trial, however, the Japanese were able to prove that they had actually made a handsome profit on that big order.  Even though their cost per chip was $100 at the time they bid on that big order, and they bid $99 per chip on that big order, the order was so large that by the time they delivered the chips, their cost had fallen to just $90 per chip. They Japanese literally "schooled" us, and that is why this manufacturing lesson is now taught in most U.S. business schools. So whenever Tony Stark... oops, I mean Elon Musk... opens another huge battery giga-factory somewhere in the world, just nod your head and say, "You go, Elon!  Pull even further ahead in lowering your costs."   [![Video Course - How To Market For Commercial Loans](https://no-cache.hubspot.com/cta/default/37671/c1051bad-ef5d-4c65-b573-e4432b1769ef.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/c1051bad-ef5d-4c65-b573-e4432b1769ef)       [![Submit Your Loan to 750 Commercial Lenders Using C-Loans.com.  It's Free!](https://no-cache.hubspot.com/cta/default/37671/7bcb7dc6-4127-4491-982a-16e57ca54d60.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/7bcb7dc6-4127-4491-982a-16e57ca54d60)   Did you know that Elon Musk actually did a cameo in one of the Ironman movies?   *Haha!*  Anyone else out there think that Gwyneth Paltrow, playing Pepper Potts, looked absolutely outstanding in that white outfit?   [![Apply For a Commercial Loan to Blackburne & Sons](https://no-cache.hubspot.com/cta/default/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc)       [![Earn 11% to 12% Interest Since 1980](https://no-cache.hubspot.com/cta/default/37671/80333ce3-b6a5-4bf7-9687-52c156ed5457.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/80333ce3-b6a5-4bf7-9687-52c156ed5457)   [![Subscribe to the Commercial Loans and Fun Blog](https://no-cache.hubspot.com/cta/default/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc)     Topics: [10% Rule](https://info.c-loans.com/topic/10-rule) ### George Blackburne III Owner of C-Loans, Inc. ![George Blackburne III C-Loans Owner](https://info.c-loans.com/hs-fs/hubfs/George%20Head%20Shot%20Small%205%20by%207%20copy.jpg?width=158&name=George%20Head%20Shot%20Small%205%20by%207%20copy.jpg) ### Subscribe via E-mail ### Connect with C-Loans ## [![Get the Latest Scoop on C-Loans Inc.](https://no-cache.hubspot.com/cta/default/37671/bacfb58b-143e-40d7-b126-33c182b5b90b.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/bacfb58b-143e-40d7-b126-33c182b5b90b) C-Loans.com® is sponsored by  C-Loans, Inc. — For more information, contact Tom Blackburne 555 University Ave., Suite 150, Sacramento, CA 95825 Telephone: (916) 338-3232 x 317 * Tom Blackburne in Indiana: (574) 210-6686 * Fax: (916) 338-2328 Real Estate Broker -- California Department of Real Estate -- License Number 01330173 Arizona Dept. of Financial Institutions – License Number 0909472 The Florida Mortgage Brokers License Number: 0708758 [Read our many client Success Stories](https://c-loans.com/mortgage-brokers-overview/success-stories/) » © 2025 C-Loans, Inc. 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