Importing from Low-Cost Countries

By Davina Cruella Sandwich

Organisations have been having their products mass produced in and around Southern China (now recognisable world-wide as the manufacturing capital of the planet) for more years than I care to remember.

The reason for this is that you get a lot more for your money in China than you do pretty much anywhere else because of the exchange rate, a single unit of their currency (Yuan) is worth far less than a single unit of ours.

That is pretty much the main reason that a lot of companies source their products from Asia. I mean, what more reason does a company need to do something if its going to save them lots of money in the long term? But there are some other advantages, and a few disadvantages.

There are only a few advantages, but I still think that they by far outweigh the disadvantages. The main one I have already talked about, the price. For every single GBP you get 11.2CNY (Chinese Yuan), so your money really does go a lot further.

The second advantage I will mention is how close you can get to the Chinese trade industry, which is of course advantageous, and thirdly you will probably end up a lot closer to your raw materials, therefore saving money on that as well.

One of the main disadvantages of this, is the cost of importing the products from China. This can be seen as extra expenditure, but compared with the money saved on the manufacturing, I would say this bares an insignificance.

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. - 23305

About the Author:

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