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Manufacture in China
Outsourcing to South East Asia has become extremely popular in recent times driven by the perception of cheaper manufacturing costs, however in reality this is not always the case, particularly for smaller or start-up businesses.
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If you're considering manufacturing in China it's important to take into account the additional costs you may
incur such as:
•Identifying and qualifying manufacturers including time and travel
•Email, mail and telephone costs
•Transport and logistics, both land and sea
•Cost of inventory while in transit
•Quality issues, warranties and the cost of returning non-conforming products
•Currency value fluctuations
Other factors worth considering may also include:
•Potential increased risk of intellectual property infringement
•Potential increased competition
•Possible quality perception by Australian consumers
•Different business processes such as payment terms
However, there are opportunities for considerable savings in China particularly for products that have a high labour component or for bulk orders where the sheer size of the order makes the costs outlined above less significant.
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Manufacture
