Chinese manufacturers offer huge potential savings for US manufacturers and explain why this article. US manufacturers determine their sales prices as cost of labor costs. This works well in the emerging market, but at any time there is a recession, and individuals only need identified needs and relatively little need for a long term survival strategy.
As a general rule, labor cost is the highest cost item for all produced products. Workers want to live a good life with some beautiful creature comforts, and their income is growing. Again in an emerging market that is no problem. People today accept price increases as the reality of life in a prosperous economy so retaining profits is not that difficult. In the downward economy, such as the beautiful one we are going through, the manufacturers have two demands. The first is the demand for employee wage growth and the second is the slowdown in product sales. It's simple math. In order to preserve profits, you should either increase your cost or reduce costs.
It is time to examine outsourcing of part or all of the manufactured products to China. On the surface, it appears that labor, material and overhead costs can replace delivery fees, but we will look closely at it. Chinese manufacturers pay 90% less labor than US labor costs. Material costs in China are lower, and thus taxes. So if cost = workpiece, then using a cheap production line uses a Chinese manufacturer.
Quality is high on products manufactured in China because they have a large economy that now supplies the world. Wal-Mart, for example, is a big buyer for products manufactured in China. The low priced and poor quality lesson that once shook Japan, the rest of Asia is well-known. If you put your products in container load, the cost per piece is incredibly low. If you outsource production to 100% of Chinese manufacturers, you can switch the factory to a warehouse and get even more savings.
Source by sbobet