Large companies and small businesses alike are opting to manufacture their products overseas and for very good reason. There are lots of benefits to be had from manufacturing goods offshore when compared to the alternative of doing it in your own backyard. Below we look at five main reasons overseas manufacturing may be just what you need to take your business and product to the next level.
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1. Lower Production Cost
Every sensible business owner will tell you that keeping production costs low without sacrificing quality is the first step toward running a successful business or company. More often than not, raw material costs are the same in China as they are elsewhere in the world. The advantage in China is not just the cost of labor but the cost of skilled labor. A multitude of China manufacturing options have the skilled labor force and the equipment to take your product from raw material to final output, all at a fraction of the cost.
2. Lower Tooling Cost
Injection molds, die cast molds, production fixtures, and other production tooling are not really seen as profit centers for China manufacturers. China tooling costs are roughly 1/5 of US tooling costs, so there’s a significant advantage to start up projects in China. Modifications to tooling are also very inexpensive while most preventative maintenance is free.
3. Mass Production
Overseas manufacturing, because it is less expensive, allows for goods to be produced in very large volumes. Volume ensures that businesses and companies are able to meet their market needs every time. The ability to consistently mass produce and meet demand is crucial to a company’s success. Being able to do so at reduced cost is, of course, an added bonus.
4. Scale and Flexibility
China has a unique ability to scale manufacturing capacity extremely quickly in order to respond to customer demand. Adding workshops and hiring skilled labor can be done almost overnight. The nimble nature of China’s factories can allow you to grow your demand without interruption.
5. Out of Sight, Out of Mind
Opting for overseas manufacturing allows business owners to turn over manufacturing responsibilities to the professionals and focus on other areas of building the business. Being able to focus on product development, marketing, promotions, and brokering new deals can help business owners grow their businesses while they have a competent team handling issues of quality control on their behalf. It is a win-win situation for all stakeholders.