| Chinese manufacturers deliver huge potential cost | | | | profits, you either have to increase your price, or |
| savings for American manufacturers, and I\'ll | | | | minimize your cost. |
| explain why in this article. | | | | It\'s time to look at outsourcing several or all of |
| US manufacturers determine their selling prices as | | | | your manufactured products to China. |
| labor cost material cost overhead cost profit. This | | | | On the surface, it seems like you\'ll be exchanging |
| operates very well in an up market, but when a | | | | labor, material and overhead for freight costs, but |
| tough economy happens and shoppers only | | | | let\'s take a closer look. Chinese manufacturers |
| purchase perceived needs and extremely few | | | | pay their work force something like 90% less |
| wants, a long term survival tactic becomes | | | | than US labor costs. Material costs are low in |
| necessary. | | | | China, and so are taxes. Consequently, if cost = |
| As a general rule, labor cost is the foremost cost | | | | labor material overhead, then you have a low |
| component of any manufactured item. Employees | | | | cost solution by using a Chinese manufacturer. |
| would like to have a great life with some nice | | | | Quality is high with products made in China |
| creature comforts, and their earnings have been | | | | because they have a large economy that now |
| growing. Once again, in an ascending market | | | | supplies the world. Wal-Mart, for example, is a |
| that\'s definitely not a problem. People today | | | | huge customer for products made in China. The |
| accept price increases as a fact of life in a | | | | lesson of low price and poor quality that once |
| flourishing economic climate, so shielding profits | | | | seriously affected Japan was learned well by the |
| isn\'t that tough. | | | | rest of Asia. |
| In a tough economy, such as the pretty serious | | | | If you bring in your products in container loads, |
| one we\'re presently experiencing, manufacturers | | | | the cost per piece is amazingly low. |
| are confronting two demands. The first is the | | | | If you outsource 100% of your manufacturing to |
| worker need for yearly salary increases and the | | | | Chinese manufacturers, you can switch your |
| second is the slowdown in product sales. It\'s | | | | factory into a warehouse and recognize even |
| simple mathematics. For you to shield your | | | | greater savings. |