Chinese manufacturing is a practice that U.S. and international businesses have recognized as an essential asset to reducing prices for their products. It’s utilized by some of the most prominent brands and it has become a staple to successful manufacturing. As domestic prices rise, the need for affordable overseas manufacturing grows.
China has answered that call and today, you see the “Made in China” tagline on many custom products including clothing, furniture, and toys. Their manufacturing capabilities have continued to grow since the inception of China manufacturing, and their factories produce private label products worldwide. In 2002, China had over 80 million total employees in the manufacturing sector. By 2009, that number had grown to approximately 100 million. The United States, the next closest, maintained a steady decline in manufacturing employees through this period, with 15 million manufacturing employees by the end of 2009.
China has the lowest labor costs in the entire world for manufacturing employees. At the same time, it has grown an economy responsible for bringing more people out of poverty than any other country. Lower costs of living make China’s low wages manageable for the common manufacturing worker, and their factories are thriving by producing goods for the entire world. Sourcify and other companies help transition businesses to the profitable and successful move of manufacturing in China.
Lower manufacturing costs
The cost differential between manufacturing domestically and manufacturing in China is significant. Domestic manufacturers have higher overhead with steep training costs and high turnover. China’s affordability makes overseas manufacturing ideal for the common business.
Cheaper labor
Outsourcing to China gives you access to that factory’s cheap labor without having to train the employees, provide access to a computer, or endure any of the other hardships of hiring locally. Wages are significantly lower in China and tapping into those savings is as easy as establishing a relationship with a factory.
Higher production capability
China-based factories produce goods for the global economy. They have scaled their manufacturing capabilities well beyond what was ever believed possible. When you outsource to China, you’re working with time-tested factories that have been producing quality products in similar industries as yours for years on end, and in massive supply.
Better expansion and diversification opportunities
Have you wanted to expand your business and offer new product lines or tap into upcoming markets, but didn’t see that being possible through existing wholesalers? Outsourcing to China manufacturers allows you to do this on-the-fly. You can expand and diversify your product offerings, as well as sell your products to international markets much easier.
You can still cut lead times
When you manufacture domestically, you become accustom to an immediate lead time. You’re manufacturing on-site, so there’s no real delay from when you place an order to when you receive it. This results in considerable savings because you can manufacture only the amount of stock that is needed, without over-manufacturing and eating into the budget.
This is often seen as a drawback of outsourcing the manufacturing process to an overseas provider. Your lead times are significantly increased, which means you might have to order more than is needed to account for the delay. However, with China manufacturers there are actually ways to cut lead times and experience quick deliveries of your product, which allows you to carry less stock and spend less.
Chinese firms have adopted a number of management practices that are less common in the West. Our research identified ten of these, ranging from deep understanding of their customers, rapid decision-making, rapid prototyping and learning from mistakes, to a ready willingness to deploy extensive resources to innovate.
While these are not of themselves particularly new, they are a source of competitive advantage in the Chinese environment, where foreign companies have not applied them consistently.
Foreign companies have much to learn from China, as it is becoming a leading market for the world. They can develop in China capabilities that they may have neglected, including bold experimentation, speedy implementation, new product category creation, focus on “lean value” and developing mixed teams and global leaders.
There is a tidal wave of competition approaching the developed world from China. The best way multinationals can prepare themselves for this is by participating directly in the Chinese innovation ecosystem.
More and more, companies are moving their factory to China to save costs and become more efficient. For logistical and geographical advantages, China positions you for a global market.
Labor Costs Are Low
Traditionally, your biggest expense is in labor. With China’s low labor costs, companies save a huge part of their profit margin. You can now get more products made for a lower cost. This adds more value to your customers with a competitive sales price.
Raw Materials Are Abundant and Low
China is home to a vast amount of raw materials. And if they don’t have it, they have a lucrative supply network with neighboring countries. Whatever your product is, you need good and affordable materials. China can provide inexpensive materials for you to save costs.
China Factories Are Efficient
Masters of efficiency, China has perfected its manufacturing process. They have advanced technologies that save money by logistics and operations.
These are some of the reasons why a China factory puts you ahead of the game. Not only will it save you costs, but it will provide you with even more value to your business. These are easy ways to cut the cost of your goods. Instead of raising prices on the disadvantage of your customers, you can cut production costs and add value to you and your customers at the same time.
What’s more, pay attention to the speedy delivery. As a businessman or woman, you need a vast vision on how to earn money and how to win in the market at details. More profits on products aren’t the only advantage you get. With smooth efficient operations, you can get a product to your customers’ hands quickly. In a time where speedy delivery is becoming even more valuable than price-points to customers, you can position yourself as a top seller by creating an active and timely process.
A China Factory Has Expert Knowledge and Experience.
A China factory has generations of knowledge and expertise. All the big players in the manufacturing industry are in the same hub, surrounding each other. When it comes to resources, innovation, logistics, and more, China is equipped with synergy to provide you with the best.
The Right China Factory Can Scale with Your Business.
Fifty years ago, it was hard to start a product-based business. Inventory was difficult because you probably had to order a lot for your profit margins to make sense. It was also hard to partner with a supplier overseas or around the world. Now it’s night and day.
With supplier and China factory websites, you can directly contact the supplier or manufacturer. You can order a sample to test your product. And even better, they have per unit price that makes sense for all buyers. You can order a small batch or a large batch. As businesses transition from push inventories to pull inventories, there is no better time to partner with a China factory.
When you can order a quantity that makes sense for you, you can build a business from scratch with minimum risk. And as you grow, you don’t have to switch suppliers. They grow with you. Find the right partner and utilize their operations and expertise to scale with you.