Mass Producing In Low Cost Areas

By Davina Cruella Sandwich

Organisations have been having their products mass produced in and around Southern China (now recognisable world-wide as the manufacturing capital of the planet) for more years than I care to remember.

But why do these big producers insist on having their products made so far away from home? Well, one answer to that question is that because of the exchange rates between our country and most Asian countries, which works out very much in our favour.

And there we have it, pretty much THE reason most products are sourced in China. Cost. But what more reason do you need it it will save a great deal expenditure? There are a few more advantages, and a couple of disadvantages.

The advantages are few, but still obliterate the disadvantages in my opinion. Of course the main one, price is a big factor as I previously mentioned. There are 11.2 Chinese Yuan for every 1 British pound so you do get a lot more for your money.

Another advantage is the close proximity you gain to their local trading environment. If you can get your company recognised in the Chinese trading industry it can only benefit your organisation. Also there is a good chance that you will end up a lot closer to the raw materials you need to make your product, therefore saving on the acquisition of your raw materials as well.

Now to the disadvantages, one of the main ones is the cost of importing your goods back to your base country. However when you compare the money spent on importing to the money saved on manufacturing, the overall process will still work out cheaper.

Also there's the time that the shipping takes, this could be seen as a greater disadvantage as, depending on level of demand, it could result in loss of turnover. Another disadvantage is that there may be some issues with production quality nearer the beginning of manufacturing as the factory staff become acclimatised to your product, but if you get a good sourcing company to do the communications for you, then you should end up with a high quality production line from start to finish. As well as that, it is difficult to predict what the local conditions are going to be like, financial or otherwise.

In summary, it is my personal belief that sourcing form low cost countries such as Southern China is far more advantageous to businesses than domestic sourcing. - 23212

About the Author:

A great company to do all your import and wholesale product work with is Red House Global. They have had decades of experience and are well known among the Chinese traders, ensuring you the best price.