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Setting Your Price Point for China Manufacturing

Lower product costs and higher profits are the reasons American companies seek out China manufacturing. The promise of greater profits make up for the issues that naturally accompany going overseas: Cultural differences, difficulty communicating, floating exchange rates, longer shipping timeframes and unforeseen delays when shipping product from the China factory to the USA warehouse, paperwork, products failing final testing and inspection, late shipments, and the occasional “equivalent” material being substituted without approval, just to name a few of the more common ones.

Let’s face it; the first goal of a business is to make a profit. If there is no profit there is no business. However, walking the tightrope between acceptable quality and price paid in China manufacturing can be tricky. The common tongue in cheek response to the question, “What is your landed target price?” is, “As low as possible.” While that answer could be considered “off the cuff”, it is accurate. When all of the factors of China Manufacturing are considered a company must ensure they are getting the best value for their money. This includes keeping their costs as low as possible while, at the same time, not risking their reputation by taking chances with unknown factories or products that are inexpensive to the point they cause issues that could cost the company sales and customers.

The added complexities and potential issues inherent in China Manufacturing versus manufacturing domestically make the situation a little more interesting. Often companies focus so much only the landed cost they forget to ask the supplier about their experience, how the supplier will keep the quality consistent, or how the supplier will ensure the product is made correctly, and what happens if it’s not.

A product’s price point is an extension of that product’s landed cost. But what is a reasonable landed cost for a specific item manufactured off shore? How does a company determine a landed cost that gives an acceptable margin and still protects the company’s reputation and product quality and consistency? That’s where ITI Manufacturing comes in.

ITI Manufacturing has been making products for their customers in Asia for over 40 years. They have what some customers’ have called “the best of both worlds”. They are headquartered in the USA (Texas) so they speak your language. They also have a full-time, experienced staff in China who 100% manage every aspect of your product being manufactured. This begins with finding a reliable China manufacturing facility with the expertise your product needs to the actual production, the testing, the inspection, the packaging, and shipping. That’s how ITI Manufacturing can guarantee each and every shipment will be free of manufacturing defects.

Companies of all sizes and experience choose to rely on ITI Manufacturing to be their “overseas buying and sourcing office”. Companies that do not have expertise when it comes to China manufacturing rely on ITI’s expertise and ability to manage the complete process. Major companies that, in some cases, already have established offices in China rely on ITI’s ability to handle the manufacturing of certain products, components, and manufacturing situations that are not cost-effective for them to manage themselves.

Do yourself a favor and contact ITI Manufacturing today. If you qualify there is no charge for ITI to evaluate your product and situation and quote a delivered price. This is the only way to know what you are missing.

By | 2017-03-09T15:39:34+00:00 February 29th, 2016|ITI News|

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