How to choose the Right Product for China
When considering making an item in China, one must
understand that not all products are good outsourcing candidates.
Labor-intensive manufacturing is China's largest export.
Making products in China allow our clients to take
advantage of the labor differential between the US and China. Where
you might have to pay $20 - $30 dollars an hour for labor in North
America, we can drive that cost down to $ .75 - $1.00 in China.
Therefore the item to be sourced should include tooling and/or require
assembly, packaging, or some other labor-intensive add-on to achieve
a significant cost advantage over making it here. You should also
remember that the cost of raw materials is about
the same almost any place in the world so it is unlikely that there
would be any cost advantage in this area.
Finally, small runs are only efficient when a product
is very complicated and/or expensive. The cost of manufacturing
and shipping would be prohibitive if you were to have 1-2,000 parts
of product outsourced that only costs a dollar or two to make. As
a rough guideline, we figure a project must bill out somewhere over
$20,000 a year to make it a good sourcing candidate.