Should I use a Chinese Manufacturer? - A Guide

Manufacturing in China has become a trend so fundamental to businesses around the world as a way of producing a high number of products at a low cost. Some of the most powerful brands in the world utilize production in China as a staple to successful manufacturing. The need for affordable overseas manufacturing continues to rise in parallel with domestic price increases.

Cheaper Labour

One of the advantages of producing in China is that the cost of labour is much cheaper. Outsourcing to China gives access to a workforce that does not require expensive training and on the whole staff wages are significantly lower in China and so is a great way for businesses to save money to invest in other areas.

Low Manufacturing Costs

There is a stark difference in costs when you compare manufacturing domestically to manufacturing in China. Most domestic manufacturers have higher overhead costs such as training and a high turnover. China’s lower manufacturing costs, strong business ecosystem, lack of regulatory compliance, low taxes and duties and competitive currency practices make it an attractive choice for international businesses.

Wealth of Experience  

China has become known as “The World’s Factory” as it is the bedrock of cheap, high-quality, high-volume products, and has been for a while. China boasts many years of experience and a wealth of knowledge in delivering products that keep up to the high standards that are required by western consumers and legislation which gives it the edge over other Asian manufactures.

Service Providers

While China’s low labour and manufacturing costs are well-known, it’s strengths in the service industry are often underrated. Nowadays, when an importer needs a labour-intensive, value-added service, Chinese logistic service providers and suppliers are more than capable of responding. Applying labels or mixing products on a pallet for example can be incredibly time-consuming services and these can be a lot cheaper if outsourced to China and so are worth considering.

High Production Capabilities

China-based manufacturers produce many goods for the global economy. They have scaled their production capabilities accordingly, which is well beyond what was ever believed possible. Outsourcing to China means you will be working with time-tested factories that have been producing high quality products for decades, in similar industries, and in vast quantities.

Lots of Expansion and Diversification Opportunities

Outsourcing to China may let you expand your business and offer a new product line or tap into a new and upcoming market on the fly, something you may not have thought possible through using your existing wholesalers. Outsourcing to Chinese manufacturers may mean the difference to diversifying your product offerings and may make selling your products to the international market much easier.

Cutting Lead Times

Manufacturing domestically means of course you will become accustomed to an immediate lead time. As you’ll be manufacturing on-site, there will be no real delay in terms of long international shipping etc so the whole process of ordering to receiving will be quite short. 

Naturally using an international manufacturer is seen as a drawback in terms of lead times with regards to shipping and delivery times etc. There are however many ways to improve lead times when manufacturing in China. Examples of these include:

• Ordering more often. By increasing the frequency in which you order, you’ll have a continuous supply of the incoming product. Many suppliers have Minimum order quantities (MOQs), but these are often reasonable mounts and so it is easy to negotiate regular orders. This will ultimately save your business the carrying costs and means you’ll never have a dire need for the product.
• Automate your information. When placing an order for a product with your supplier, is there a manual process that must take place for the order to be approved? There are often work-around methods to help on automating the delivery of that information. From purchase orders, invoices or inventory sheets, there is a myriad of software designed to automate the process and make the whole experience faster.
• Share your data. Providing your supplier with forecasts on inventory levels, you can essentially allow them to track this same data and automate a purchase order on your behalf when need be. Many suppliers are more than happy to integrate your inventory management software and take on the responsibility of monitoring your SKUs and their stock levels. This in turn will lead to better practice and better production efficiency.

Product duplication capabilities

Often, we come across a product that really sparks our interest and seems to really hit the nail on the head. These ingenious products are often so inspiring that we want to produce something similar for our own businesses. To avoid any legal trouble, you want to make a duplicate and not an exact copy. China’s product duplication capabilities are far superior to any other countries and can produce products at faster speeds with better accuracy than almost anywhere. It is this exact process that put China on the manufacturing map, initially drawing inspiration from American and Japanese made products, producing near perfect duplicates for a fraction of the cost. China’s factories are a dependable and trustworthy place to have a working concept of a product rebranded.

Scam Prevention

There are now many specialised companies that actively work to protect businesses from being scammed by connecting them with trusted and vetted overseas factories. You can immediately build a relationship and start outsourcing your manufacturing to China knowing you’re in safe hands and won’t be taken advantage of.

High Quality Products

China has traditionally been branded as the world’s manufacturing hub that churns out low-grade cheap products. However, the way in which the press paints this picture doesn’t always reflect the whole picture of China’s manufacturing capabilities, nor is it consistent with the experience of many successful importers that continue sourcing products from China.

Contrary to the stereotype, Chinese manufacturers are increasingly focused on developing world-renowned brands, producing high value products while using more and more sophisticated technology to do so. Though this may not be true of every factory in China, the manufacturing industry as a whole has seen a shift towards higher quality products, and this is becoming the popular trend.  

In addition to this shift towards improved quality, the Chinese government has grand plans to modernize manufacturing and improve the quality of Chinese products. There is currently a government initiative called ‘Made in China 2025’ which aims to transform the nation into an innovative, forward-thinking, and green world power by 2025.

In all, the manufacturing industry in China has changed drastically for the positive, in terms of product quality and innovation, while maintaining its competitive edge in term of low costs, vast experience and high output. Additionally, the communication barrier is becoming less of an issue, with most factories employing English speaking staff who understand the need for a personal experience and have the technical prowess to communicate through essentially any medium you desire, making the whole process smooth and hassle free.