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.
The main reason for this is because the currency in China (Yuan) is worth a lot less than British currency, American currency, or most other currencies for that matter.
So that's the main reason people source their products from China. Well, what more reason do you need to do something other than the fact that it will save you lots of money? There a a couple of minor disadvantages, and a few more advantages to boot.
As far as the advantages go they are few, but pretty big. The price I have already mentioned, but there is a severe difference in the currencies. For every one British pound you get 11.2 Chinese Yuan, so you really can pay peanuts for what you want.
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.
One of the main disadvantages of this, is the cost of importing the products from China. This can be seen as extra expenditure, but compared with the money saved on the manufacturing, I would say this bares an insignificance.
Another disadvantage is the shipping time. Now this might be more of a disadvantage as it may actually result in loss of turnover, depending how demanding your market niche is. Also, although the good sourcing companies will ensure that you get the best service, there may be some issues of quality in the beginning as the workers get used to making a new product. As well as the fact that you cant predict the local conditions very easily, financially 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.
The main reason for this is because the currency in China (Yuan) is worth a lot less than British currency, American currency, or most other currencies for that matter.
So that's the main reason people source their products from China. Well, what more reason do you need to do something other than the fact that it will save you lots of money? There a a couple of minor disadvantages, and a few more advantages to boot.
As far as the advantages go they are few, but pretty big. The price I have already mentioned, but there is a severe difference in the currencies. For every one British pound you get 11.2 Chinese Yuan, so you really can pay peanuts for what you want.
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.
One of the main disadvantages of this, is the cost of importing the products from China. This can be seen as extra expenditure, but compared with the money saved on the manufacturing, I would say this bares an insignificance.
Another disadvantage is the shipping time. Now this might be more of a disadvantage as it may actually result in loss of turnover, depending how demanding your market niche is. Also, although the good sourcing companies will ensure that you get the best service, there may be some issues of quality in the beginning as the workers get used to making a new product. As well as the fact that you cant predict the local conditions very easily, financially 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.
About the Author:
A great company to do all your import and manufacture with is Red House Global. They have had decades of experience and are well known among the Chinese traders, ensuring you the best price.
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