Manufacturing in China - Part 3 - Get Real
Can you expect to get gas for $1 per gallon? If you could, what would the quality of that gas be? My guess is a little bit of gas and a lot of water. Realistically, you would be expecting to pay a few dollars per gallon for gas. Making products in China relies upon the same principle as buying gas-you have to be realistic in what you will be paying to make your products. If you expect to pay pennies for your products, then that is exactly the type of quality you will get from your product.
Products can be made cheaper with very high quality in China; however, you must also remember factories still need to make money. If you are willing to pay only an unfairly low price for a product, then factories are going to reduce the quality of materials used in your products to make what you want at the price you request.
Consider the following suggestions when planning your manufacturing in China:
- Purchase more. China is a volume-based market and in order to get the best prices, you need to purchase larger volumes compared to manufacturers in the U.S. Factories will always have a minimum order quantity required. Consider purchasing more than the minimum in order to lower the price per unit. This will require additional cash in the beginning, but will pay off in the long run since you will be making more money per sale.
- Pay more for quality. With the minimum order quantities required by factories, you will be making your products cheaper; therefore, be willing to pay more for higher quality materials in your products. Not only will your products last longer, you will make more long-term customers because of your product quality.
Aaron Wong is the Founder of AQI (Arrow Quality International), the first and leading Chinese Bridge consulting firm. Aaron is an extremely fluent speaker of Mandarin Chinese, and proficient in Cantonese Chinese (so he claims). He has over 7 years in the translation industry in positions of freelance translator and contract Federal Government linguist. Aaron has been involved in many business ventures that include selling his family cherries when he was 10 to a computer business when he was 13 to sending English teachers to China and Taiwan to teach English at 24. He graduated from the University of Utah in 2 years with a dual Bachelor's degree in Chinese and Asian Studies; and received his Masters in Management with an emphasis in business management from Colorado Technical University with a 4.0 GPA. Aaron received his MBA from the University of Utah in the spring of 2007. He also currently serves as the Secretary of the Board of Directors for the Lehi Area Chamber of Commerce, a volunteer Business Counselor for SCORE, a Student Mentor for the University of Utah SMART Start program, and has been recognized as a Top 40 Under 40 Professional by BusinessQ magazine.
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