China is recognized as one of the world' s most popular locations for factories. This is the reason why so many of the products you pick up have "Made in China" marked on them. And this is due to the countless benefits of using a China factory.
China has made a name for itself as the largest exporting nation in the world, specialising in a number of different product categories. Almost anything can be made in China, particularly in the cities of Shenzhen and Guangzhou, which are known for their wealth of accessible factories and manufacturers.
From competitively priced manufacturing to easy production, here are the most important points to be aware of when looking to use a China factory.
Cost-effective manufacturing
As the price of manufacturing increases in many countries, Chinese factories are able to remain competitive. Because of this, countless businesses around the world choose to use a China factory so they are able to keep their costs as low as possible. While other countries such as the USA also have large manufacturing industries, they are not able to keep their costs as low, meaning there are greater benefits when choosing to do business with factories in China.
Even with the need to then ship the products to other countries after they have been made in China, the reduced cost to create them makes the overall process less expensive.
China’s factories make manufacturing affordable by avoiding steep training costs and high turnovers which typically increase costs. It is also cheaper in many cases to use an existing factory which has the capability to produce a specific product, than it is to set up a new factory yourself. By building up a trusting relationship with factories, you are able to understand the benefits they can bring and create the opportunity to increase production should it be required, with costs often becoming cheaper per unit when the quantity is increased.
Startups and smaller companies or those without enormous profit margins benefit particularly from the low manufacturing costs of Chinese factories. For many companies who opt to manufacture domestically, they fail to make a profit as a result of the expense of production. With efficient production lines and a low cost to manufacture products, this can make operations more affordable, helping businesses to make more profits.
A growing business
China’s ability to massively produce products is rapidly increasing, with more warehouses being built for manufacturing purposes and an increasing amount of employees working in the manufacturing sector. In 2002, there were around 80 million employees working in manufacturing in China. Seven years later, in 2009, there were around 100 million people working in manufacturing. This rapidly growing number of manufacturers in China means the country is able to facilitate manufacturing orders around the world on mass scales.
There is no other country in the world which can rival China’s product availability, which continues to go from strength to strength.
As an example of Chinese factories’ success, the country has been the world’s largest furniture exporter for years, with many of the best-known furniture brands having their furniture produced in China. In addition, there are approximately 100,000 factories in China which produce branded apparel.
The country continues to outperform others when it comes to the performance of factories, for example, the bags and accessories sector, which amounts to $37.6 million and is expected to continue to grow at a rate of 14.5% annually.
Low labour costs of a China factory
The labour costs in China are the lowest in the world when it comes to the manufacturing sector. While the cost of paying staff may be low, these jobs also make a huge difference to the workers and their families, with China bringing more people out of poverty than any other country through jobs in factories. While the wages may seem low to those in other countries, when compared to the cost of living in China, these wages are enough to make a difference to Chinese people’s lives, at the same time as creating products which are sold around the world.
By outsourcing manufacturing tasks to China, you are able to avoid the need to go through rigorous and costly hiring processes, training of new staff, creating working space or managing a factory. Instead, you are able to leave it to the people who know exactly what to do and the best, most efficient methods of manufacturing and meeting expectations.
Increased production made easy
China factories are able to deal with large production lines and quantities. These factories are used to mass production, creating countless items every day through tried and tested techniques and processes. These factories are capable of taking on any size of project, as they have scaled their businesses and increased their capacity on a larger scale than most can imagine. Because of this, if your required production supply increases, this is no problem as it can be scaled up to meet your requirements in the same factory, meaning they know exactly what you need and are ready to begin work.
Wide-ranging product categories for manufacturing
China leads the way when it comes to manufacturing. If you are looking to build a specific product, a China factory can give particularly impressive benefits, saving you both time and money when you choose a factory which specializes in your product sector. The reason for this is that they hold specialist expertise in this industry, as well as being familiar with the processes required for specific materials and the best ways to be efficient. By choosing the right factory to suit your needs, you are able to reduce costs and guarantee a high quality finished product that fits your needs and requirements.
Making communication simple
It is worth putting time and effort into creating a trusting, open and honest relationship with a manufacturing factory. While there may be language barriers, finding the right factory will mean there are no misunderstandings and that your requirements can be met, as well as both understanding the necessary process. Research and having in-depth conversations about your expectations can work to give you peace of mind that you are working with a reputable factory.
Technology has almost entirely eliminated issues with communication, with the internet creating platforms for conversations to take place seamlessly. Emails, texts and phone calls can make speaking with the necessary people from a factory easily, explaining projects and receiving status updates. For more visual demonstrations or group conversations, Skype, conference calls, screen sharing, videos and countless other methods of communication can help to ensure that everybody fully understands what to expect. In addition to this, the majority of China factories have English speaking members of the team on hand to answer any queries and explain everything in depth, creating a fantastic experience.
Negotiating with Chinese factories
Negotiations can be easy when working with Chinese factories. With so many factories to choose from, competition is high so many will do everything they can to beat their competitors’ prices. Because of this, they are often quick to respond and are willing to negotiate on costs and delivery times to win business.
Factories can expand opportunities
For companies looking to grow their range of products or sell new items, it may not be possible through wholesalers. However, you are able to do this quickly by using China factories, also making it easier to create products on demand, which can be shipped to international markets.
Achieve short lead time with a China factory
While domestic manufacturing can create immediate lead time, there is a common misconception that using a China factory means long lead time which can lead to gaps in stock, or even running out at times. This isn’t true, and there are plenty of ways you are able to keep stock at the necessary levels without needing to pay for over-manufacturing.
One of the methods of doing this is to place regular orders with a Chinese factory, keeping a continuous supply of products which arrive. By doing this, inventory will not fall to dangerous levels and therefore will not be a concern. In addition, it can also mean you do not require large amounts of storage space in a warehouse, as you will not have enormous quantities of inventory at any point.
Another way to cut down the lead time is to reduce time of approval processes, purchase orders, inventory documents and payments, with automation working to speed up and stop waiting time between ordering and fulfillment of the order. The addition of inventory management systems and collaborating in this way can also work to automatically reorder products when a set quantity of inventory is reached.
By sharing inventory data and forecasts with factories, they can help to facilitate automatic re-ordering. Many factories are happy to work alongside clients’ inventory management software, meaning you do not have to continuously check inventory levels or SKUs. Instead, they are able to do this for you, remaining aware of the amount of remaining inventory and placing orders to create more products on your behalf. This can not only save time and effort, but ensure orders are placed when specific inventory levels are flagged. When the correct re-ordering point is selected, China factories are able to simplify inventory management and ensure more stock is on its way to you by the time you begin running low.
How can a China factory create duplicate products?
Chinese factories are able to make fantastic duplicates of products, being renowned for their ability to create copies of products quickly and more accurately than most factories anywhere else in the world. While you must be careful not to create identical products, replicas can be made with the help of a factory in China, using existing products as inspiration if required.
So if you think one of your competitors is selling an item which is perfect for your target market, why not see how you can create a very similar product by asking a China-based factory to create it for you? If your competitors aren’t already utilizing Chinese factories for their manufacturing, this may be a way to cut corners, reduce costs and overtake the competition. You can even brand products up in the process, putting your own stamp on the finished products and creating more of a brand identity, reminding those of your business every time they see or use the product. You would be surprised at how often somebody will ask a factory in China to create a product, before realizing it’s the exact same factory which creates the same type of product for their competitors.
To avoid finding yourself in any legal troubles, make sure you do not cross any boundaries. However, copycat manufacturing can enable you to create very similar products to existing ones, creating the opportunity for you to even make improvements or add additional selling points.
When looking to find a factory in China capable of creating duplicate products, make sure the factory has the facilities to create exactly what you need, with the required level of quality so the product meets your expectations.
Conclusion
If you are looking to reduce your manufacturing costs and create stock for reduced prices while still maintaining high quality, a China-based factory could be the answer. Enabling you to reduce manufacturing costs, increase profit and create better products for any business, Chinese factories can work to facilitate any requests and create a service which cannot be replicated domestically. By taking these considerations into account before selecting the factory to outsource, you can experience all the benefits associated with a reputable factory and improve your bottom line without negatively impacting business whatsoever.
