Here are few major policy initiatives which make the cost of manufacturing cheaper in China: Why Chinese products are cheaper? Though ratings say that China is not the cheapest anymore, and there are several serious competitors like Vietnam, Thailand, other Asian countries and even the United States, it is still the best choice for Private Label sellers. Plus, enjoy a FREE 1-year. Vietnam is gaining experience in manufacturing and learning. There are always factories willing to work with small, medium and large businesses. We are aware of the underwater rocks. First, China has been the world’s manufacturing hub for a long time. Sorry. But for whatever it is that you're manufacturing, you don't always need to reinvent the wheel, at least for some of it. Officially, Vietnam is planning to achieve that by 2050. The cost is minimal and the benefits are priceless. The thrust of Chinese government policy makers has remained on economy of scale. USA!" Admittedly, I'm writing this column as the opinion of ONE person with experience. On the other hand, I never had difficulty finding a Chinese factory that was willing to work with me as a smaller company ("smaller company" = I'm not Walmart). Most times, when a Chinese factory tells you they can produce your order in four weeks, they produce your order if four weeks. In fact, their quick and aggressive turnaround times are impressive. So expect some negative comments and feedback from time to time about the fact that your products are made in China. Yet, with any factory -- overseas or domestic -- it will be important to stay on top of quality control because mistakes happen and shortcuts are made no matter where the factory is located. This information will help you be confident in what you do. Factories in other countries have a significantly higher MOQ (Minimum Order Quantity). Think Global! And while many of the price hikes can be palatable, they'll still throw you off and you may feel blind-sided. The cost of shipping from a remote city in China (where most factories are) versus the cost of shipping from somewhere in the U.S. will be drastically different. Vietnam offers some important advantages over China, especially in the low-cost manufacturing. The cost may vary depending on this factor. People usually question themselves why is it cheaper to manufacture in China, but let’s take a look at this question from another side: high productivity and automation, low energy costs, rich domestic markets, short supply chains, and so on. Unlike other countries, China has an incredibly developed infrastructure, so raw material can come from point A to point B in the shortest time and for the minimal price. I published a list of 7 important aspects of #manufacturing in Asia and compared #China against #Vietnam. Why China Is "The World's Factory" The 5 reasons why China is the world's biggest manufacturer. and how to control the whole process. Second, China is the most attractive consumer market in the world. Don't get me wrong. The government does a lot of good things to attract foreign investments and the political situation is stable. But keep in mind, there is a trend of wages rising across the whole of Southeast Asia. Do you have critical gaps in your coverage? Its population is 15 times smaller. They will take very seriously every word you say. But, Why many companies still manufacture their products in China? For just $5 per month, get access to premium content, webinars, an ad-free experience, and more! Depending on your business and your products, some factors weigh more heavily than others. This information will help you be confident in what you do. Chinese factories work are far lower profit margins than those in the U.S. As a result, they are almost never able to accommodate one-offs and, generally speaking, their minimums are often higher than other countries. From Amazon sellers for Amazon sellers. But you will. How to Create a Free Amazon Seller Account, All You Need to Know about Amazon FBA Long-Term Storage Fees, Individual and Professional Accounts on Amazon. As opposed to what most people think, it is fairly easy to find factories willing to manufacture lower quantities here. Vietnam, Thailand, Malaysia, India, and Indonesia are all perceived as the “new-China” due to significantly lower wages. When manufacturing processes depend on actual labor work, it is more likely production costs will be cut down in Vietnam, not in China. They have focused on mass production of products in their factories which lowers their aggregate cost significantly and this makes it cheaper. It's more expensive, but you can get your products at your front door in two to three days. In the two retail businesses I've started, I reached out to domestic manufacturers first. So expect some of the same if you decide to work with Chinese factories. I thought to myself, "Oh come on. Cheap manufacturing, fast production, high quality, customization opportunities are necessary things for Amazon sellers. And consider the lost sales you'll have during that possible 29-day period when you don't have your goods in stock. The Chinese are very precise. But please do not EVER let the intimidation of working with a factory of China be the reason you don't do business there. However, this idea is fair only for large manufacturers who own several plants and produce tons of goods every month. For one, it’s not nearly as cheap to manufacture goods in China as it was 20 years ago. The only time a factory refused my business was because I couldn't meet their high minimum requirements (more on this later in the 'Cons' section.) China has the fifth place in their list before Taiwan which takes the 6th place. This was my experience with each of the five to seven American factories that I spoke with. Nobody will beat that at least for another 10 years. And sometimes, the cost of shipping by air is still less than the lost sales you'd have if you waited the 30-day ocean shipment time. Again, from anecdotes and conversations, my understanding is that manufacturing more highly sophisticated goods (e.g., electronics) can be riskier than something simpler such as textiles (e.g., clothing). My hat's off to the Chinese who have done an incredible job learning our language. They say that Chinese companies start their production in the US, as it is cheaper for them. We know all the stages of selling on Amazon from the inside. Vietnam can’t keep up with China in this regard. Maybe yours will be different.
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