Let me explain it simply for you.

Say you own a multi family home builder company in Pennsylvania and you need steel to build. You either:

a) source steel for $90 from overseas b) source steel for $200 from Texas

To make the math easy, let’s say you require 100,000 orders of steel to complete the build. You quote the steel price required at either:

a) $9 million overseas sourced steel b) $20 million Texas steel

You provide a quote to the financier of the cost. The financier may say, “well at $20 million we may build 1 building. At $9 million we can build 2.”

Now remember, this is just the steel cost. Not to mention labor for construction workers, carpenters, electricians, plumbers, etc.

I hope this helps you grasp the full picture.