Import From China Business

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A practical guide for starting a small business

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Contract Manufacturing China

Import Goods From China

What lessons can we learn from big corporations who have successfully started their manufacturing operations in China?


The Good News About Cost Cutting:

Operating costs such as utilities and rent are typically lower than in the U.S. Construction costs are also significantly lower. The abundance of suppliers keeps prices down for the manufacturer.


The Bad News About Cost Cutting:

Westerners going in expect huge savings in manufacturing costs.  While it is generally true that labor costs in the China are lower than those of the U.S., labor cost is only a small component of the total manufacturing costs.  There is also potential skill shortage in your industry.  Utilities such as electricity are often in short supply.


Industry Maturity:

Automotive and Telecom are at its infancy from an industry development perspective.  If you are in an industry where you'll bring in new manufacturing technology, beware that the Chinese are experts in Reverse Engineering. They'll purchase one of your products, take it apart, put it back together and figure out how you produced it.  Then they go and copy it.  Now you have a knock off on your hands.

 

 

For a small business owner who is interested in import from China, why is Contract Manufacturing China of interest?  Global manufacturing has been a manufacturing strategy for large corporations for many years.  Moving a plant or starting a plant in China to produce goods to be shipped for consumption in western nations has been done successfully.  

As a small business owner, this may the furthest from your mind.  You just want to get the goods from someone in China and sell them in your own country.  However, as your business grows, sooner or later manufacturing your own goods in China might make sense.  You should understand the pros and cons of such an option of Contract Manufacturing China.

Contract Manufacturing China  - Lessons From The Big Boys