Here are some important key points to note when manufacturing in China. Firstly, let’s take an overview of China’s manufacturing industry.
China is the largest exporter of manufactured products all over the world. In the previous year, 18% of China’s export was sent to the United States. Chinese industries offer more affordable manufacturing costs. And they have more advanced technologies used in manufacturing processes compared to other developing manufacturing industries in other countries.
The Chinese manufacturing industry specializes in producing a variety of products in different categories. If you are a new business trying to build a branded product, using Chinese manufacturers can save you plenty of time and money.
With China being the largest manufacturing country in the world, there is always a large variety of products to choose from. Here are a few categories Chinese industries have been able to dominate:
- automobile parts
The clothing is said to have over 100,000 manufacturers all over China, and the automobile category in China is said to house the majority of auto part manufacturers in the world.
The city of Shenzhen in China is the center of manufacturing in all of Asia because of the high level of manufacturers and services provided in this city. Amazon FBA logistics is also located here.
China Wages and Cost
As China is considered one of the biggest economies in the world, it is advancing in its technology and production capabilities, which has resulted in the rise of wages paid to factory workers.
Factory worker wages now appear more competitive compared to other countries like Vietnam and Indonesia. Another advantage that comes with the increase in wages is better-managed factories, advanced machinery, and stronger infrastructures that improve the production process.
The rise in wages doesn’t have a negative effect unless manufacturing cost is higher with lower profit margins.
Cost of Shipping
Another factor to consider for China manufacturing is the cost of shipping. In Asia, the cost of shipping is similar, but there is mostly a standard rate to ship a medium package of a product. As a business, you get better rates when you build a relationship with manufacturers or factories.
Your manufacturer can provide faster shipping methods to reduce the amount of time spent from sourcing for couriers, and this would most likely help you spend less on shipping costs. It is important to know that custom duties and other taxes are not calculated in the shipping cost when shipping from china.
The majority of manufacturing industries in China demand a high Minimum Order Quantity (MOQ). A high-volume order can reduce the cost of production because it makes the per-unit price more affordable.
Smaller manufacturers may offer to give lower minimums order quantity than larger factories. It’s important to take precautions when working with small factories to avoid spending money on a poor-quality product.
As stated before, it’s important to take precautions when working with manufacturers, especially when dealing with online manufacturers. It is advisable to always take a trip to the factory to view the whole production process or use outsourcing agents that connect businesses to manufacturers.