The bargaining power level of iRobot's suppliers is medium. Raw materials used in robots are a significant cost item for iRobot and can fluctuate on a periodic basis. Suppliers of steel, plastic, rubber and electronics are numerous and allow iRobot and its contract manufacturers to find quality raw materials at the best possible price. Labor costs are also a significant cost of revenue for iRobot. iRobot outsources the manufacturing of their home products to China where labor is plentiful and costs are favorable compared to the rest of the world. This has allowed iRobot to cheaply manufacture their domestic robots. iRobot's labor costs for the government segment are much higher because they are produced in the United Sates. iRobot produces government robots domestically because intellectual property can easily be stolen when manufacturing abroad.