Importing From Low-Cost Countries
Sunday, June 14th, 2009Organisations 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.
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.
There are only a few advantages, but I still think that they by far outweigh the disadvantages. The main one I have already talked about, the price. For every single GBP you get 11.2CNY (Chinese Yuan), so your money really does go a lot further.
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.
The disadvantages, I would say, are severely disproportionate to the advantages in that they seem relatively insignificant. The main disadvantage is the shipping cost. Actually getting your produced product back to the UK/USA/wherever you are based can be a bit pricey, but compared with the money you will have saved on the actual production, I think this is an insignificance.
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.
To conclude, I believe that the advantages that come with manufacturing your goods in Asia far outweigh the disadvantage.