There are many reasons businesses are choosing to have their products manufactured in China. One of the biggest reasons that Chinese manufacturing makes sense is lower production costs. If you are wondering exactly how Chinese production can be so much more affordable, you aren’t alone! Understanding how Chinese manufacturing can be more budget-friendly will help you decide if offshore production is suitable for your products and overall business model.
Reduced Labor Costs
One of the biggest differences between manufacturing in China and manufacturing in the US is labor costs. The reasons for labor being less expensive in China are varied and complex but the “bottom line” is the greater the percentage of labor required to manufacture an item the less expensive it is to manufacture in China.
We all know that when you buy in bulk you are usually going to save money. This idea carries over into Chinese manufacturing. Generally speaking, material prices are relatively the same all over the world. However, because China is the world’s largest manufacturer, they are ordering massive quantities of materials needed to support the amount of manufacturing being done. Because they are ordering huge quantities of supplies the prices are competitive even when considering the cost to import them.
When considering the savings, you will need to consider the factory’s minimum order quantity (MOQ) requirements. This is one crucial metric that will help to determine if manufacturing in China is right for your business.
Access to Raw Materials
Depending on your product or business, you may find that sourcing the materials you need to manufacture your products takes more time and money than you would prefer. You need to find the best price for the product as well as to be able to access it promptly.
Because China has such a well-developed infrastructure, raw materials are sourced and moved quickly and efficiently.
Abundance of Factories
The size of the manufacturing infrastructure in China is impressive. The National Bureau of Statistics of China reported that there were nearly 2 million factories in China and that was in 2018. Not only are there a great number of factories, most factories specialize in specific types of products and/or processes. Specialized factories require very little downtime when switching from task to task, increasing productivity and allowing for an overall faster turnaround time. Factories that specialize in a particular process or that works with a particular category of material has an advantage over makers with less experience.
Taking the Next Step
So how do you find a factory that will be right for your needs? If you search the Internet for “Chinese factories” you will be inundated with options and information. They all look interesting and all have impressive pictures of a factory. How do you know which one to contact?
This is where ITI Manufacturing can save you lots of time and money. ITI Manufacturing knows when you make the leap into manufacturing offshore there are multiple questions and concerns. ITI Manufacturing can help you overcome some of the biggest and often costly issues associated with manufacturing offshore.
Common Problems ITI Will Help You Overcome
When you can’t visit a factory yourself you are at a disadvantage. You can look at pictures online and you can try to communicate with people in China but are you getting an accurate picture? How do you know that the factory will provide you with a quality product in a timely fashion? How do you know the picture of the factory you see on the screen is really their factory? These concerns are usually what keep people from jumping into offshore manufacturing despite potential cost savings.
ITI Manufacturing has been in the business offshore manufacturing since 1974. ITI works with you to understand your needs and how offshore manufacturing can best be structured to most effectively meet those needs.
As an additional benefit, ITI Manufacturing helps you:
- Overcome language barriers
- Understand cultural differences so they don’t impede the delivery of your product
- Ensure the correct quality materials are used in the manufacture of your unique item
- Ensure timely shipments
- Navigate the financial process of manufacturing overseas
- Navigate the waters of ocean shipment and the paper chase of importing from China
Let ITI Manufacturing be your guide to finding the right Chinese manufacturer. You can rely on ITI Manufacturing like hundreds of customers have during the past 46 years. While new opportunities come with challenges there is no reason to “re-invent the wheel”. You can do it right the first time with ITI Manufacturing’s help.
Get Started with Offshore Manufacturing Now
If you are considering manufacturing a product offshore we would love to connect with you to discuss all your production needs. There may be options that you don’t even know are available to you that we can help you with.
Also, if your company is currently manufacturing in China and experiencing challenges call us to discuss our Offshore Management Service.
Either way, call us. 877-735-0370. You will be glad you did.