North America vs. China Manufacturing

Think You’re Saving Money Manufacturing In China?

You might not be saving as much as you think and in fact it is very risky compared to manufacturing in North America. One bad order will end up costing you time and money.

Some Factors you may or may not think of before placing an order in China

1. Materials Switching - It has become common practice in China to switch product or part specifications without informing the client. This practice can leave you open to lawsuit when a product or part fails.

2. Quality Fade - An expression used to cover the Chinese practice of cheapening the product or part and fudging test results.

3. When Problems Occur the Chinese Company Ceases to Exist - If you're looking for a guarantee that your product or part is manufactured to specifications, you are better to use a North American manufacturer which stands behind its product.

Once Chinese companies have your money, they couldn't care less about your complaints and often change their names at the first sign of problems.

4. Long Lead Times - Product or parts that can be turned around here in a month often take 3 months to turn around in China. That costs you 2-3 months in sales.

5. Volume Ordering - In order to get the price break you are looking for you might have to order more parts or product than necessary. Excess product in inventory is costing you money.

6. The Price is not the Final Price - Have you added:
  • Duty shipping into Canada
  • Transportation costs
  • Insurance and brokerage charges
  • Interest on your money (China must be paid in advance vs.60 days here)
  • The cost of 2-3 months lost sales waiting for delivery
7. Communication - In order to get exactly what you want it may be necessary to hire a translator or even visit the factory in China. All added expenses.

8. Patent Protection - Non-existent in China. Remember, you are exposing your product or part to the risk of being copied.

9. Weather – The weather of late has become less and less predictable. Shipping by sea can very easily result in delayed, lost or damaged product. If you are selling the goods into a big box store this could result in hefty fines for non-compliance or late deliveries.

In the end are you really saving money? Or are you just creating headaches for yourself and taking unnecessary risks on behalf of your company?