Moving your manufacturing overseas is a nerve-wracking step in your business. No wonder so many companies are scared to take the plunge, especially if you’ve launched a product from scratch and can’t bear to give up the reins.
But it’s hard to ignore the temptation to find a cheaper, faster, and more reliable manufacturing route. And for your business, that could be to move your manufacturing to China.
Before leaping, read through our guide to the pros and cons of manufacturing a product in China.
The Pros
There are plenty of reasons companies choose China for their manufacturing. Here are some of the benefits of manufacturing a product in China:
Lots of Choices
China is frequently nicknamed the World’s Manufacturer, and for a good reason. They accounted for over a quarter of all manufacturing globally in 2018, and that number is rising.
That gives your business plenty of choice. You have the chance to find a company with the right product, reputation, and price, and you won’t have to compromise to find one that fits your list of requirements.
The Cost
With low wages and efficient processes, Chinese manufacturing still offers considerable cost savings over an American or European equivalent.
That is ideal if you are in a price-sensitive market and need to keep in step with your competition.
A Chinese manufacturer will have an efficient and cost-effective process for making your product to the same high standard.
That may help improve your profit margins or give you the chance to add new discounted offers to your promotions.
It’s High Tech
China isn’t only manufacturing large quantities; they also have fantastic tools and processes that are world-leading.
That’s a genuine advantage if you have a product that needs a complex or cutting edge manufacturing process that you might not access in your domestic market.
So when thinking about the steps to take to manufacture a product, ask yourself whether you’ll need the advanced technology that China offers.
The Cons
So what are the disadvantages of manufacturing a product in China? Here are some reasons why it might not be the right decision for you.
Communication Barriers
Many Chinese businesses speak some English, but you could still have language barriers when communicating, which could hold you up.
That can be a risky scenario for a business, should language problems lead to miscommunication. Imagine, for example, that the manufacturer misinterprets your timescales or requirements when placing a large (and pricey) order.
Scale
While China allows you to scale, that might pose a problem when you are still a small business and only ordering minimal units.
You need to consider timescales and shipping costs, which might not offer your business much of an advantage when you are only ordering tiny units of products.
Manufacturing a Product in China
It’s always worth fully considering the pros and cons of manufacturing a product in China before making a final decision. But for those businesses with grand ambitions, China offers an unrivaled expansion opportunity.
For more helpful tips, visit our business resources for guides and articles to help grow your business.