Can you expect to get gas for $1 per gallon? If you could, what would the quality of that gas be? My guess is a little bit of gas and a lot of water. Realistically, you would be expecting to pay a few dollars per gallon for gas. Making products in China relies upon the same principle as buying gas-you have to be realistic in what you will be paying to make your products. If you expect to pay pennies for your products, then that is exactly the type of quality you will get from your product.
Products can be made cheaper with very high quality in China; however, you must also remember factories still need to make money. If you are willing to pay only an unfairly low price for a product, then factories are going to reduce the quality of materials used in your products to make what you want at the price you request.
For buyers it is important to know how to find a manufacturer in China:
China is attaining pre-eminence in global manufacturing. The country already produces 50 percent of the world’s cameras, 30 percent of air conditioners and televisions, 25 percent of washing machines, and 20 percent of refrigerators. One private Chinese company manufactures 40 percent of all microwave ovens sold in Europe.
Chinese producers continue to move forward, investing strongly in new plant and equipment. Cost is usually the major driver in the market to purchase products. China provides products at low cost with quality which attracts the large number of buyers it has throughout the world. China price, which always seemed to be at least 40% lower than United States’ costs on everything from bedroom furniture to telecom gear, is narrowing. The biggest factors behind the sharp shift are currency fluctuations and labour costs.
Consider the following suggestions when planning your manufacturing in China:
Purchase more. China is a volume-based market and in order to get the best prices, you need to purchase larger volumes compared to manufacturers in the U.S. Factories will always have a minimum order quantity required. Consider purchasing more than the minimum in order to lower the price per unit. This will require additional cash in the beginning, but will pay off in the long run since you will be making more money per sale.
Pay more for quality. With the minimum order quantities required by factories, you will be making your products cheaper; therefore, be willing to pay more for higher quality materials in your products. Not only will your products last longer, you will make more long-term customers because of your product quality.