Mass Producing in Low Cost Areas
For more years than I have been witness to, companies have been mass-producing their products in Asia, usually in or in the region of Southern China which is now globally seen as the manufacturing capital of the world.
The reason for this is that you get a lot more for your money in China than you do pretty much anywhere else because of the exchange rate, a single unit of their currency (Yuan) is worth far less than a single unit of ours.
And there we have it, pretty much THE reason most products are sourced in China. Cost. But what more reason do you need it it will save a great deal expenditure? There are a few more advantages, and a couple of disadvantages.
The advantages are few, but still obliterate the disadvantages in my opinion. Of course the main one, price is a big factor as I previously mentioned. There are 11.2 Chinese Yuan for every 1 British pound so you do get a lot more for your money.
Also, you can get in with the Chinese trading industry, and if you can become known among them, this can be infinitely advantageous. Another advantage is that you will undoubtedly wind up closer to the raw materials you need, hence you save money on that as well!
Now to the disadvantages, one of the main ones is the cost of importing your goods back to your base country. However when you compare the money spent on importing to the money saved on manufacturing, the overall process will still work out cheaper.
As well as that, there’s the time that shipping takes. This is probably more of a disadvantage as this could result in loss of turnover if demand for your product is high enough. Also, the production might be a little sloppy to start with, but if you get a good sourcing company to sort it all out for you, they will ensure that this doesn’t happen.
To conclude, I believe that the advantages that come with manufacturing your goods in Asia far outweigh the disadvantage.