Manufacturing and Importing Your Product from Asia
For many many years now, companies have been having their products mass-manufactured in Asia, usually in and around Southern China as this is now recognised as the global manufacturing centre of the world.
The main reason for this is because the currency in China (Yuan) is worth a lot less than British currency, American currency, or most other currencies for that matter.
So that’s the main reason people source their products from China. Well, what more reason do you need to do something other than the fact that it will save you lots of money? There a a couple of minor disadvantages, and a few more advantages to boot.
As far as the advantages go they are few, but pretty big. The price I have already mentioned, but there is a severe difference in the currencies. For every one British pound you get 11.2 Chinese Yuan, so you really can pay peanuts for what you want.
Another advantage is the close proximity you gain to their local trading environment. If you can get your company recognised in the Chinese trading industry it can only benefit your organisation. Also there is a good chance that you will end up a lot closer to the raw materials you need to make your product, therefore saving on the acquisition of your raw materials as well.
Now to the disadvantages, one of the main ones is the cost of importing your goods back to your base country. However when you compare the money spent on importing to the money saved on manufacturing, the overall process will still work out cheaper.
Also there’s the time that the shipping takes, this could be seen as a greater disadvantage as, depending on level of demand, it could result in loss of turnover. Another disadvantage is that there may be some issues with production quality nearer the beginning of manufacturing as the factory staff become acclimatised to your product, but if you get a good sourcing company to do the communications for you, then you should end up with a high quality production line from start to finish. As well as that, it is difficult to predict what the local conditions are going to be like, financial or otherwise.
In summary, it is my personal belief that sourcing form low cost countries such as Southern China is far more advantageous to businesses than domestic sourcing.