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Pros & Cons Of Sourcing Products From China

  • Pros & Cons Of Sourcing Products From China

    Pros & Cons Of Sourcing Products From China

    Over the past few decades, China has grown as an economic powerhouse, with many international companies sourcing products from there. However, between the pandemic and rising political tensions, many UK companies are cutting ties with China, according to the Confederation of British Industry (CBI).

     

    Whether you’re an established company or a new entrant to the market, it’s worth considering whether it’s better business to import from China, or whether the outsourcing of products has become too much of a hassle. To help you with this, we’ve listed the pros and cons of sourcing products from China.

    Cons Of Sourcing From China

    While many businesses successfully source their products from China, it doesn’t come without its challenges. These should be carefully weighed against the positives to determine whether this would be the best strategic move for your business.

    Finding A Manufacturer Is Tough

    Finding and cultivating a relationship with a factory owner requires time and money. Once you’ve found several potential suppliers, you then still need to negotiate to see if they’re willing to produce your products to a standard you find acceptable. Many Chinese manufacturers only focus on million-unit orders, which can make things difficult if you're looking to have smaller volumes produced.

    Logistical Challenges

    When you choose to source products from China, you also need to account for international lead times, as your inventory has to be packed, shipped and brought through customs before being transported to your warehouses or retail stores. This shipping can also involve significant costs, depending on your distribution network.

     

    This can often make local suppliers much more attractive as it’s easier to get new stock delivered to you in a shorter period of time. Additionally, you won’t be incurring the costs of international shipping fees.

     

    At Adventa, we produce a range of products locally in the UK. Our central location, coupled with our fast assembly lines and world-class packaging, make us a supplier of choice for UK-based businesses. However, we’re also able to ship products to every other continent across the globe.

    Negative associations of “Made in China”

    It’s a known fact that “Made in China” often brings negative connotations to mind, such as poor quality and low prices. This can sometimes impact your markup and the customer’s general idea of your products.

     

    When producing your products locally, you can take advantage of the fact that your products are ‘made in the UK’. This can be used as a unique selling point that indicates high quality and can also potentially allow you to charge a higher price, increasing your profit margin.

    Language barriers

    The issue with working in a foreign country such as China is the language barrier. Not all Chinese factory owners are proficient in English. And even if you have a translator assisting you, there’s still the possibility of their being misunderstandings.

    Pros of Importing from China

    While there are some significant drawbacks to importing from China, there are advantages that make this a lucrative business option.

    Low production costs

    One of the biggest reasons why companies choose to source their products from China is that the production cost versus output is highly favourable. Lower production costs result in lower prices for your business and customers, which could convince them to purchase your products. Lower prices also contribute to higher profit margins, which is an attractive deal for businesses. However, these lower production costs should always be considered alongside quality.

    Opportunities for market expansion

    Sourcing products from China opens up the door to international expansion, as you can market your goods to the local market. Once you’re in the country and manufacturing your products there, introducing and supplying your products becomes far easier.

    A Summary: Sourcing Products From China

    For decades, businesses have sought lower costs and higher profits by sourcing their products from China. However, in the wake of the pandemic and rising political tensions, many businesses have started to backpedal, choosing to manufacture locally instead.

     

    Each business is unique and should carefully weigh the pros and cons. While importing from China can result in expansion and increased profit, it can be challenging in terms of costs, finding a supplier and more.

     

    Here at Adventa, we are a UK-based manufacturer that specialises in supplying customisable office and decor products. Our location and extensive experience make us an ideal choice as your supplier. If you’d like to know more, please get in touch with our team.