Posts Tagged ‘manufacturing companies in China’
How to Find the Right Chinese Manufacturer for Your Business
In the last few decades, the Chinese economy has grown incredibly fast. One of the big reasons for this is because Chinese companies manufacture a considerable amount of products for western companies.
If you want to reduce production costs and grow your business, it makes a lot of sense to work with a China manufacturer. Given that you’d be working with a foreign company, the process can feel overwhelming.
So what exactly do you need to look for to make sure you find the right company for the job? This article lists some of the things you need to consider before signing a contract with a Chinese company.
Do They Have Certifications?
When you work with Chinese manufacturers, you need to be sure they have the right certifications. This helps to make sure you can rely on the company. If the China assembly service doesn’t have certifications to show you, it could be a red flag.
Always make sure you get proof of the correct documentation. A good company should be more than happy to provide proof.
Are They Financially Stable?
It’s also important that you work with product assembly services in China that are financially stable. The reason for this is simple. If the company goes out of business during production, it causes you a lot of problems.
A good Chinese product production company will be financially stable enough that you can rely on them to consistently deliver the product. You can find out if a company is financially stable by asking them about its finances. You should also verify what they say by researching the company.
Do They Offer Any Additional Services?
When looking into product assembly in China, you should also look for companies that offer multiple services. Many manufacturing companies in China offer other additional benefits, such as graphic design or packaging design.
This means that the company could deliver your product fully packaged and ready to go. Working with a company that offers such additional services can save you a lot of time and money in the long run.
You should take the time to analyze exactly what your company needs. Then see if you can find a Chinese manufacturing company that can meet all of those needs. When you’re only dealing with one company for a variety of services, it can really streamline your production process.
How Big is the Company?
You should also pay attention to the size of the company. While you might be tempted to go for the biggest company possible, this isn’t always the best choice. If you’re a small business, it may make more sense to go with a small or medium-sized manufacturing company.
As a small company, you’d probably be a much lower priority for a large company. On the other hand, if you go with a smaller company, they’ll have much more time to focus on your manufacturing job.
Before signing a contract, make sure that the company you’re considering doesn’t work with many big clients.
What is the Minimum Order Quantity?
You’ll also need to figure out if there’s a minimum order quantity. Many Chinese manufacturing companies will only work with you if you want to produce a certain number of units.
For larger businesses, this isn’t usually a problem, but for a small company, it could be problematic. Always make sure you confirm the minimum order quantity before you start doing business. This makes sure you won’t face any nasty surprises in the future.
Also, beware that if you work with a larger manufacturing company, they may implement a minimum order quantity later on in the business relationship.
Do They Have Good Quality Control?
When working with a Chinese manufacturing company, quality control is key. If the company sends you products that are not up to standard, your profit margins will decrease.
While Chinese manufacturing companies had a bad reputation for poor quality control in the past, they’ve gotten much better in recent years. If you work with a reputable company, you should have no problems getting quality products delivered.
Manufacturing companies should also have policies in place to reimburse you if some of the products are not up to standard.
Can They Provide a Product Sample?
Working with a foreign manufacturing company is always a risk. That’s why you should ask for a product sample before you commit to a serious business relationship.
A good manufacturing company would be more than happy to provide you with sample products. They should also be receptive to your feedback. It’s not uncommon to go through a few prototype examples before you get something you’re happy with.
Beware of any companies that aren’t willing to provide samples as it suggests they might not be a company you can rely on.
Check Out Reviews and Get Recommendations
You should also make sure you check out reviews of a potential company. These days a huge range of businesses use Chinese manufacturing, so you should find no shortage of online reviews.
You should try to verify the legitimacy of these reviews to make sure they’re not fake. You might also consider talking to other business owners you have a relationship with. Recommendations from friends are worth a lot as you know they’re genuine.
A China Manufacturer Can Grow Your Company
If you’re looking for a way to take your company to the next level, a China manufacturer makes a lot of sense. If you want to make a reasonable profit, you’ll need to find a way to keep costs down. Chinese manufacturers allow you to do exactly that.
If you want to work with a company with a lot of experience in working with Chinese manufacturing, contact us today, and we can help you to grow your business.
How to Navigate Contract Manufacturing in China
For some western companies considering overseas production, they may want to open up a permanent factory in the country where they wish to operate. For others, there are many options for short-term factory operations without investing too much time or money into it. These factories can be found easily in China—a country that provides what is needed for this type of business.
Working with an overseas partner can be quite daunting, but there are ways to navigate these situations successfully.
To make this decision easier for you, we will explore the nuances of contracting work out to a Chinese manufacturing company and what you might expect from such an arrangement – whether it’s just for one new product or if you’re considering scaling up your production globally. Let’s dive in!
What is Contract Manufacturing?
Simply put, contracting manufacturing is when one company hires another to build components or parts on their behalf over a specific period and at an agreed-upon price.
This enables a company to start producing its products without having the huge amount of resources or the funds necessary to build and run a factory.
Different Kinds Of Contract Manufacturing In China:
There are many different types of contracting agreements between companies that engage in contract manufacturing in China. These range from simple to complex and can be broken down into 3 main categories:
1. Private Label Manufacturing
Under a private label manufacturing agreement, the contract manufacturer delivers an item to the client’s inventory warehouse or directly to the store for them to sell under their brand.
In this way, the entire private label manufacturing process is outsourced. The client has full control over designing, marketing, and managing other aspects of their business.
2. Individual Component Manufacturing
Component manufacturing is known as a one-time service, which is generally used to refer to producing specific, individual components.
In individual component manufacturing, contract manufacturing is only responsible for producing one component that will eventually become part of a larger, more complicated final product.
For instance, basic components such as lifting bolts can be manufactured in bulk – this lowers costs for the manufacturer because they are produced to the same specifications.
3. End-to-End Manufacturing
End-to-end manufacturing is a process where products go through every stage of production under one roof.
Of course, that’s not to say there are no outside vendors. There are things like raw material sourcing and shipping handled by external companies.
End-to-end manufacturing is more about the process, rather than the materials. It leaves more control for the client company in regards to design, quality control, and other details.
Working With A Quality Contract Manufacturer In China
There are many benefits of working with a contract manufacturing company in China. Here are a few of the best.
1. Reduce Overall Costs
Across almost every industry, businesses cite this as their number one reason for outsourcing production to China.
Outsourcing allows access to existing facilities and trained professionals, saving time and money in the process. You only pay for the final product exactly what you need, which means you can stick to a smaller and more manageable budget.
2. Flexibility
Although having your factory is a good way to get exactly what you want, outsourcing to contract manufacturing can be a smart try if you are new to this field.
When it comes to contract manufacturing, flexibility is another important factor you should keep in mind when choosing a supplier.
With numerous factories and workers in the manufacturing industry, you can reach out to your manufacturing partner at any time if there are any changes you need to make.
3. Fast Production
When you partner with a reputable Chinese contract manufacturing supplier for your products, you’ll be able to save more time.
Working with an experienced manufacturer means that not only will your products get manufactured quicker, but they’ll also be done well – because the company has invested in its facility over the years to perfect its production process.
They’ll handle every aspect of product development and manufacturing, allowing you to bring them to the marketplace faster so you can generate revenue right away.
When to Choose a Contract Manufacturer
Manufacturing in China has been proven to be an effective and cost-effective way for many Western companies who can’t compete with wages in other countries and regions.
Though contract manufacturing is often a wise choice, it doesn’t necessarily make sense for all businesses. Here are some things to keep in mind before considering it an option for your company.
- Doing due diligence
- Checking qualifications
- Comparing manufacturing capabilities
- Dealing directly with the contract manufacturer rather than a middle-man
- Conduct product quality
Find A Reliable Contract Manufacturer In China
In recent years, as China’s economy has entered a new era, it has transformed from the low-end to the high-end of the manufacturing industry.
There has been such an increase in the number of production plants becoming less labor-intensive and even more quality driven.
Still, choosing a perfect manufacturing company in China may not be easy. So It’s better to work with an established and reputable company that specializes in manufacturing for years.
Now, if you are ready to start making your products in China, try to work with us Shield Works.
Shield Works is a British-owned and managed company in the South China Greater Bay Area. We specialize in product design, prototyping, manufacturing, and product assembly for clients from all over the world.
We attribute our success to the dedication and expertise of our engineering team who is highly qualified and experienced. With over 15,000 projects completed, there is no wonder why we’ve been able to achieve success. Contact us for a no-cost consultation!
Product Manufacturing: 5 Steps To Start Manufacturing Your Products In China
If you have a great idea that you think it’s feasible and a desire to turn it into reality, you can make the jump and create something great out of nothing.
You may still have some questions:
- How do I find a manufacturer for my product?
- How much will it cost me?
- How long will it take them to produce my orders?
Whatever it is, for starters, you have to know that there are a lot of factories that are waiting out there who are dying to produce your dream products.
If you are still struggling with the idea of whether or not to outsource manufacturing your products to China, here are 5 steps to manufacture your products in China. Let’s begin!
Step 1: List All Your Needs
You might have a good idea of how to develop and operate a small business, at least you think so. But maybe you are not quite sure how to get it done.
By far, the most common question we get after 17 years of helping international businesses to move their production to China is “What do I need to provide to get an estimate quote from a manufacturer?”
Maybe you also have this question, right?
Well, to answer this question, you have to understand the manufacturing process. Each product is made based on its materials and complexity, and the processes needed to meet the required specifications.
This is important: having every detail mapped out before contacting any potential manufacturers will make it easier for you and the manufacturer to have an accurate quote.
In fact, at Shield Works, we generally work with a lot of overseas entrepreneurs who have a detailed plan for their products.
Most of our clients understand the gap between current demand and reality, so they try to find a perfect niche to expand their businesses. And they also understand their requirements will vary based on certain orders. So try to let your prospective partners know your product plan ahead of time. It’s also important to keep costs down while still meeting all requirements necessary.
By knowing where your priorities lie before approaching any potential manufacturers, everyone will be aware of what is possible and what isn’t without too much lost time or money later on in development.
Step 2: Build A Product Prototype
Whether you are new to the product manufacturing industry in China or a seasoned veteran, you have likely heard of the concept of product prototyping.
In short, product prototyping is the process to create an initial product to test the function and user experience based on what you will see in this tangible form. It’s also an essential phase that shouldn’t be ignored.
Typically, there are two approaches to creating a physical prototype for your product.
3D Printing
3D printing has a significant influence on the mandating industry.
Using this technology, you can mass produce prototype samples quickly by simply inputting some simple information using a process known as rapid prototyping.
3D printers are best suited for industries that need frequent and disposable prototypes to represent something visually – including jewelry, clothes, and consumer goods.
CNC Prototyping
CNC is an abbreviation of Computer Numerical Control, which allows you to create near-perfect replicas of your product.
Also, it’s a good idea to use the CNC prototypes to showcase a simple demo of your product to potential clients, which can help you gather feedback and suggestions in order to improve the product.
CNC prototypes are ideal for products such as industrial equipment, medical devices, etc.
Step 3: Confirm Your BOM
A bill of materials, also known as a BOM, is the comprehensive list of all required parts, items, raw materials, and assemblies that you need to manufacture a product.
A BOM is one of the most important documents for a custom manufacturer—think of it as a recipe—as it includes all of the components and steps you need to take to manufacture your product.
Typically, BOM is usually split into 2 categories, EBOM (An Engineering Bill of Materials) and MBOM (Manufacturing Bill of Materials)
EBOM
EBOM is used primarily by engineers when they design a product and is often created in a CAD (computer aided design) system.
MBOM
While the EBOM deals with product design, the MBOM or Manufacturing BOM deals with product assembly which is more detailed than EBOMs in both structure and depth.
MBOMs need to include a line for every material required part or assembly on the supply chain, along with instructions on how the part is to be used.
To have a better understanding of these two terms, let’s take a look at this example:
If the product you are building needs 12 of a certain type of screw, then each individual screw will be listed in the MBOM. Conversely, the EBOM will only list a line where there are 12 total screws needed for production.
Providing an accurate BOM allow your manufacturer to deliver products on time and buy at the best rates for materials and components, thus saving you both money and time.
Step 4: Be Careful Of The Quality
If you have a product prototype on hand, and you have every problem fixed, you’re already halfway there.
After mass production, you should always make sure to avoid common pitfalls with product quality.
Poor-quality products will only hurt your business and tarnish your brand.
If you don’t want to waste your time and money on the long process of product creation, and want to stand out from other brands, it’s better to invest in quality control and customer experience. Otherwise, you may compete on price or delivery options.
To avoid quality problems as much as possible, here are three keys points you should keep in mind:
- Be clear and concise about your product requirements and expectations.
- Investigate and work with your manufacturing supplier to ensure your product complies with the regulations of the final market.
- Follow up throughout production and communicate effectively.
In short, it’s easier than trying to fix things later on!
Step 5: Find A Reliable Manufacturer In China
Manufacturing in China can be a daunting experience for any overseas business. Though the overall process may be similar, the technique and equipment vary from company to company.
Also, selecting a manufacturing company in China can be quite difficult. So It’s better to work with an established and reputable company that specializes in manufacturing for years.
Now, if you are ready to start making your products in China, try to work with us Shield Works.
Shield Works is a British-owned and managed company in Zhuhai City, Guangdong Province, South China Greater Bay Area. We specialize in product design, prototyping, manufacturing, and product assembly for clients from all over the world.
We attribute our success to the dedication and expertise of our engineering team who is highly qualified and experienced. With over 15,000 projects completed, there is no wonder why we’ve been able to achieve success. Contact us for a no-cost consultation!
Finding A Perfect Factory: 5 Reasons Why It’s Hard to Find a Reliable Manufacturing Partner in China
China has been the production powerhouse of the world for a few decades and now is churning out products at an ever-increasing rate.
With so many overseas companies turning to Chinese manufacturers, it still can be hard for some of them to find a reliable and professional manufacturing plant that meets all their requirements and standards.
This article will explore some reasons why finding such a manufacturing partner in China is difficult, as well as offer advice on how to do so successfully.
If you’re an overseas company looking to make your first foray into the Chinese manufacturing world, this information could be critical to your success. Check out the five reasons why it’s hard to find manufacturing partners in China and start building your own business there today!
1. Factories Don’t Have Websites
With the development of the Internet and related technology, it’s pretty standard for companies to have some sort of online presence. This is especially true for manufacturing companies who want to show off their capabilities and reach more global clients.
However, many Chinese factories still don’t establish their websites. This can make it difficult for foreign companies to research potential partners and get a sense of their work.
Cost and human resources are the other two main reasons why smaller businesses would avoid setting up their websites.
Though these small and medium-sized factory owners may find the idea of having a website intriguing, many do not have enough money for both technologies and for hiring someone to set it up. Also, this could be way too expensive for them when compared with how much revenue the business generates annually or if there is even potential for any return from this investment at all.
2. Difficulty with Language
One of the main reasons it can be difficult to find a reliable manufacturing partner in China is the language barrier.
Commonly, most staff working at most Chinese factories don’t use English as their first language. Typically, most factories hire a few employees who can speak English to work with foreign clients, but there’s no guarantee of their English ability.
Communicating clearly to your Chinese supplier will make things easier for both parties involved. Don’t just rely on letters or phone calls, but show them what you want and need, and ask them to list them back to you in an understandable format.
The key to clear communication with your factory representative is clear, simple, and open. Even when you are communicating with someone who has a good grasp of spoken English, it’s best not to simply send them product specifications through email and assume they will understand all information without questions. Because sometimes people need clarification due to cultural differences or what they’re used to manufacturing versus what you want.
3. More Factories Are On 1688
Whether you are running a brick-and-mortar or an online retail shop, if you want to import products from China, then Alibaba can be a good start to reach out to many manufacturers.
However, if you think you get your desired goods at the best rates on Alibaba, you’d be wrong. There’s another B2B platform out there that boasts significantly more manufacturers providing lower prices for the same goods
That’s 1688. com.
1688 is the biggest and most popular Chinese wholesale platform that covers all manner of different goods including apparel, industrial equipment, home appliances, and more. Dozen of manufacturers sell their products directly on this platform rather than working with other trading companies. Some trading companies reach out to factories and then go on to resell their goods at higher prices on other platforms such as Alibaba, Aliexpress, Gearbest, etc.
So you may also want to find your ideal factory on 1688 right?
Yes, of course, you can. The only issue is that everything is written in Chinese, which helps cater to China-based manufacturers. It will be hard for those who don’t know any Chinese to locate a proper company to work with. And there are simply too many listings, products, and suppliers, it can be way too much to weed through, which makes it difficult for you to reach out to a reliable partner for your business. Additionally, as a domestically oriented website, they offer few payment options, such as Domestic Bank Transfers, Alipay, and WeChat Pay, which won’t allow international sellers or buyers access easily.
4. The Fuzzy Definition of Quality
When it comes to finding the best factory for your production project, quality is one of the most important paramount you need to pay attention to – but getting it right isn’t always easy.
Overseas companies often find themselves having difficulty defining product quality when looking for a Chinese manufacturer because everyone has their own opinion about what constitutes “high quality”.
Asking 100 factories about their concept of product quality nets you 100 responses. Some factories would say that quality means products meet all their in-house specifications and requirements; some mean there are no defects present and they comply with international standards; others make sure products are fully functional straight out of the box.
It’s hard enough trying to decide who has the highest level of product quality without this uncertainty over what exactly quality even entails making decisions even harder.
What’s more, every customer has different standards, and what may be considered high quality to one won’t always be accepted by someone else.
Overseas companies in other countries often have their own specific needs when importing goods, which makes it hard for factories in China to know exactly what they need to do to satisfy their customers’ requests.
It can be frustrating, right? Don’t worry.
International Quality Standards like the ISO family and IATF 16949 are essential for making high-quality products. These international tools can help you control costs, simplify compliance, and guarantee safe, dependable products.
5. Lack of Trust
Many foreign companies are hesitant to work with Chinese manufacturers because they lack trust.
From the supplier perspective, the main reason is cultural differences and a lack of understanding of the Chinese business landscape. China has seen an upsurge in small-to-medium-sized factories over recent years and they often rely on word-of-mouth referrals from individuals who share common needs to increase their customer base.
Typically, many of these small and medium-sized factories have established relationships with local networks that are other factories or trading companies, and they focus on making products for these domestic partners.
On the other hand, there have been numerous stories in the online forum or other social platforms saying that about Chinese factory’s stolen intellectual property or delayed deliveries which dissuade overseas businesses from partnering with a factory. This makes it hard for companies to take the leap of faith and partner with a factory in China.
The best way to overcome this problem is by building a relationship with the company you’re interested in working with. The more time you spend getting to know them, the more likely you’ll be able to build up that necessary level of trust so that your overseas company can get what they need from them.
Need Professional Help With Your Manufacturing Project?
Finding the right manufacturing plant for your project is quite a task. It takes extensive research before deciding to ensure you are getting the best deal.
To find a professional contract manufacturer in China, look no further than Shield Works.
With our British ownership and management background combined with manufacturing knowledge, we keep quality at the forefront. You don’t have to worry about any defective products coming out of our doors. As one of only a few businesses able to boast 17 years’ worth of experience under their belt in China and helping over 15,000 previous clients complete projects successfully and cost-effectively, we’ll provide all your questions answered on how to manufacture in China! Contact us to discuss your project today!
Manufacturing In China: 4 Tips To Spot A Real Factory Vs. Trading Company In China In 2022
If you’re considering outsourcing production to China, there are certain things to know before embarking on the task like
- How to start?
- Who you can reach?
- What to do before placing an order?
- How much will it cost?
However, the most important thing is to make sure you are going to work with an actual factory rather than a trading company.
Why? Because when you work directly with the actual factory:
- Your spending will be less to get the same items, which increases your profit margin and reduces lead time.
- You can make changes to the product easier and quicker.
- Your product quality will be higher because you can check with your supplier now and then.
So, as you can imagine, it can be difficult to find out whether a supplier is a factory or just someone pretending to be one. Here are four tips you can use to figure this out.
1. Check The Business License
First and foremost, it’s a good idea to request a copy of your manufacturer’s business license which is called “营业执照” in Chinese.
Every legitimate company in China has a business license issued by a local branch of the Administration of Industry and Commerce (AIC). It is an official certificate, proving that the company has been registered with the authorities and operates legally.
If your potential supplier doesn’t have a business license, that’s a huge red flag. it’s best not to do any kind of business with them until they get everything sorted out on their end. No matter what they say, don’t risk your time and money.
If your supplier claims that they have a business license, it’s better to request a physical copy. It can be used as proof that your supplier is an actual manufacturer. In addition, if there is ever any dispute with your supplier, having a physical copy of their business license on file could be helpful.
Once you receive the business license, make sure you review it carefully. Keep in mind to check the business scope which should include words like “manufacture or produce” (生产，加工，制造)
if you don’t know Chinese, it’s ok.
Here is a simple way:
You can use your phone to scan the business license, extract words, and copy-paste to the Google translator. The business scope is the combination of some simple words so don’t worry about the correctness.
Verifying the business license is the first step when doing due diligence on a Chinese company. It allows you to verify that the company is legit and not a scam.
2. Check the Sample Address
Many Chinese manufacturing companies are willing to send out samples when you have a detailed plan for working with them.
One way that you can use this method is to verify if your chosen manufacturing supplier understands your requirements and quality standards.
Moreover, we advise checking the address of the sample package before disposing of it. Make sure it matches up with what is included on the business license that you requested beforehand.
If they are the same addresses, then this manufacturing supplier may well be a real factory rather than just someone acting as a middleman.
However, this isn’t always reliable.
The reason being is that some companies set up offices downtown whilst their factories are located outside of town due to cheaper rates for renting land.
In this case, even though the sample address might not be an office at that location, it still could be possible that they’re a real factory.
You have to check with your supplier to request both business licenses for the office and the factory.
3. Check the Facility Visuals
Now, many Chinese factories have the abilities and technologies to introduce themselves to the world through visualization.
Take Shield Works for example, we have invested heavily in digital presence such as
- Uploading our facility video online: enhance transparency across our manufacturing plant thoroughly.
- Creating a virtual facility tour on our homepage: show an immersive tour of our whole production environment.
- Posting images of the facility or factory tour on social platforms: keep our followers updated about our new visitors.
The reason for checking the facility visuals is that most foreign business owners can not come to China in person to make a physical facility tour to confirm the production environments, capabilities, and quality.
If a supplier tells you that they own a huge and state-of-the-art manufacturing plant, but cannot provide any proof yet, then it might be worth walking away from them until they can back up what they say with hard evidence.
By checking their facilities, you will have more confidence to build trust and reduce business risk.
4. Check The ISO Certifications
Typically, not every trading company has ISO certifications but the majority of manufacturing factories do.
This is because a factory needs some specific ISO certifications to keep operating.
However, some trading companies also have ISO certifications to deal exclusively in one product category and maintain a strong relationship with their manufacturers.
Working with such a trading company is the same as working with a real manufacturing company with a factory when it comes to price.
Meet Shield Works
When selecting a manufacturing company in China, you have taken into consideration many factors.
It’s important to list your needs and criteria before starting the process of narrowing down candidates or you risk being too hasty in making a decision without taking all necessary factors into account.
Working with a professional manufacturing company in China like Shield Works will save you time and reduce risks.
With our British ownership and management background, we take great pride in our over 17 years of international project experience and excellent team. Contact us for a no-cost consultation!
Your Guide to OEM Products: What They Are and Their Benefits
Projections show that the global automotive OEM market will reach a value of $39.503 billion by 2028.
When it comes to aftermarket car parts, the general belief is that they may be lower in quality than factory originals. Your old air conditioner, for example, finally gives out after all of these years. The next day, you head into the dealership and purchase a factory replacement for optimal performance.
Auto parts aren’t the only thing produced by OEMs – in fact, they can create all kinds of components for various industries. So how do you decide between the two? Well, first you need to know about OEM products.
In this guide, we’ll go through what they are, why you should use them, and anything else you need to know.
OEM Products Defined
An OEM (original equipment manufacturer) is a company that makes parts that are considered to be as good as the components of products from another manufacturer. For example, a manufacturer that makes smartphone screens that are as good as the ones that come as standard in iPhones would be classed as an OEM.
OEMs generally work closely with VARs (value-added resellers) to add value to an original item, which the VAR then sells. An OEM may make custom designs based on the needs and specifications of a VAR.
How OEMs Work
An OEM typically makes sub-assembly parts, but will sometimes produce completed items (although this is rare). An OEM as above, that makes smartphone screens, may also make a range of other electrical components. They might then sell these on to a company like Samsung or Apple, which assemble these parts into TVs, smartphones, computer monitors, etc.
Many parts made by an OEM are quite insignificant on their own. Most final products are assembled from many individual parts before the VAR sells them under its own brand name.
As OEM product manufacturing consists of parts and components, they focus mainly on B2B (business-to-business) sales, whereas VARs sell primarily to end-users. With that being said, the number of OEMs selling directly to customers has increased in recent years.
This is mainly with certain types of products. OEMs that make computer components, for example, often sell directly to customers who build their own computers. Car part manufacturers often do the same as many people carry out car repairs and upgrades themselves.
Despite this, the auto industry contains one of the most basic OEM examples there is. OEMs manufacture parts like brake cylinders and exhaust systems, which they sell to auto manufacturers. These manufacturers then assemble these parts into cars, which they market to auto dealers, who sell them on to customers.
Newer OEMs
In recent years a new definition for OEMs has arisen, and it’s most commonly associated with the computer industry. It refers to a company that buys products, then rebrands them or incorporates them into new products under their own name.
Microsoft, for example, creates Windows software which it then sells to HP. HP incorporates this into its devices and sells them to customers under the HP brand.
In this situation, Microsoft would traditionally be the OEM, and HP would be the VAR. In most cases, however, the product guide from HP would refer to themselves as the OEM.
You do have the option, however, to go for aftermarket parts instead of OEM products. This is true for almost any component, and whenever you need to replace or upgrade anything, you need to choose which you think is best.
OEM vs Aftermarket
People often get OEM and aftermarket confused, but they’re almost opposites in some ways. OEM parts are made for specific products. Aftermarket parts are made by another company, and customers can use these as a replacement for the original parts.
There’s a lot of competition here in many industries. Among the most common is the auto parts industry.
If a consumer has a Ford Taurus, for example, and the thermostat breaks. They can replace it with an OEM part made by ABC Thermostats, which would be identical to the original one. Alternatively, various other companies make other parts that would serve well as a replacement – these are aftermarket parts.
In many situations, a consumer would go for an aftermarket part because it’s cheaper and/or easier to obtain. Sometimes it may be the only option. If the consumer is replacing a part from an older product, the manufacturer may no longer support it, meaning the OEM might not make the parts needed anymore.
Sometimes certain aftermarket product manufacturers become well known for the quality of the parts they produce. In these cases, consumers may specifically look for parts made by such an aftermarket manufacturer.
This is something else that is commonly seen in the auto parts industry. Hurst Performance, for example, is an aftermarket gear shifter manufacturer. They’re also an OEM manufacturer of some parts for various muscle car automakers.
Their products are generally seen as being superior to the parts that most cars come with as standard. Because of this, people will often choose them for replacement parts instead of going with OEM parts. People will sometimes upgrade to Hurst Performance gear shifters before their original even needs replacing.
The Benefits of OEM Products From Shield Works
When buying parts, you may need to decide what type of manufacturer to go with. Several advantages come with using an OEM.
Response
You’re likely to get a faster response from an OEM than other manufacturers. This is because they can identify and produce the part quicker as they have access to the technical drawings. At Shield Works we aim to always keep turnaround time to a minimum, ensuring we get your parts manufactured and out to you in good time.
Quality
With OEM parts, quality is key. We work to make sure our parts are identical to the original component, if not better. We test all parts we create to make sure they meet the specifications of the original, ensuring high quality and reliability.
Any parts you receive from us will be fully compatible with the product and perform just as the original part did. At Shield Works, we go by ISO standard work practices to ensure we maintain a high product standard. All of our processes and record-keeping also meet ISO standards, maintaining high-quality practices across all areas of our business.
Shield Works is a Wholly Foreign-Owned Enterprise (WFOE). As such we adhere to all PRC laws and regulations in terms of product manufacturing, assembly, distribution, and exportation.
Support
All OEM support engineers should have access to the engineering team that designed the original products. This means they’ll also have access to any information or details needed to ensure the part is up to standard. With a high level of technical knowledge and support, we can ensure that we make all of our parts correctly, with minimal room for error.
Value
OEM parts should always be as good as the original part. Because of this, you would expect them to have the same longevity. If a part serves the same function but fails much quicker, it may not be as worthwhile to replace it.
Any parts you get from an OEM manufacturer like Shield Works should last just as long under the same conditions as the parts they’re replacing. The performance will be just as good, and it will degrade at the same rate or slower.
One of the downsides of aftermarket parts is that they often don’t match up here. While they may work well enough for the same purpose, they’ll often fail much quicker. This is because they tend to be made with lower quality materials, and with worse manufacturing processes.
ROI
In most cases, an OEM manufacturer produces parts in a very cost-efficient manner. While aftermarket parts can also be very cheap, the lower level of quality means that they’ll need replacing more often, and they’re more likely to have defects from the start.
OEM parts are specifically designed to exact specifications to match your equipment. In the long run, this will keep the need for maintenance down, helping save on costs. It also means you’ll experience less downtime, further increasing the ROI (return on investment).
Costs
Shield Works is based in Guangdong, China. The cost of product manufacturing varies depending on the country in question. In China, manufacturing costs are often much lower than in many other locations.
By saving costs on manufacturing, we can offer our OEM parts at a lower price than many competitors, without compromising the quality.
While all manufacturing takes place in China, Shield Works is 100% British owned and managed. This means that we maintain western standards for communication, service, and business ethics at all levels of our organization.
Transparency
People may have concerns about products being manufactured so far away from a business’ main center of operations. To ensure all standards are held we maintain 24/7 video streams from our warehouse in Guangdong. Using this you can observe your manufacturing area at any time to ensure proper practices are being adhered to.
Security
One of the best ways of ensuring standards are maintained is to only allow authorized personnel into manufacturing zones. To do this, we use fingerprint access which helps provide full IP (intellectual property) protection at the manufacturing location.
Access
While a 24/7 video feed is useful for monitoring a manufacturing zone, it doesn’t give a good look at the parts themselves, so you may want a better idea of how everything is being handled. We’ll give you full access to production monitoring in real-time. This way you can get details from your assembly line whenever you need them.
You can look at information such as communication lines and statistical reporting to ensure things are on track. This also means you can communicate directly with your production team in China if need be.
Flexibility
You can contact us at any time if there are any changes you need to make. Within our OEM manufacturing processes, we can make any adjustments to ensure your orders meet your needs. If you have any product adjustments you need to make or project requirements that we’re not aware of, just let us know and we’ll make the necessary changes.
Experience
Shield Works, with already over 17 years under its belt now, was launched the core values of transparency and integrity. We still carry these principles on today, and they’ve been a key component of our success in the manufacturing industry.
Since being founded we’ve completed over 15,000 projects. Our team is skilled in a variety of processes and sectors.
Capabilities
Over the years our team has tackled all kinds of projects. We can produce a range of hard goods, soft goods, and electronics such as:
- Furniture
- Tools and hardware products
- Automotive parts
- Safety equipment
- Jewelry
- Footwear
- Bags and accessories
- Home and garden appliances
- Lighting
- More
Whatever OEM parts you need, we can manufacture them professionally and in good time.
Getting Your OEM Products
OEM products are ideal if you want high-quality parts for your goods. The products we manufacture at Shield Works will always meet or exceed expectations, making them ideal for any situation.
We pride ourselves on transparency, so you’ll be able to see what’s happening with your parts at any stage of the process. We have a wide range of capabilities and can meet whatever needs and specifications you have. OEM parts provide quality, reliability, and longevity.
The team at Shield Works Precision Manufacturing is ready to take on any project you have. If you want to know more about our services, or if have any other questions for us, click here to contact us today.
Manufacturing in China: 5 Facts You Should Know
Though it seems like a lot of overseas companies outsource their production to China, there are plenty of misconceptions about Chinese manufacturing that can come back to haunt you.
Before you set out to reach a manufacturing partner in China, there are some facts you should know so you can prepare yourself for success instead of falling into the pitfalls. Let’s dive in.
1. Manufacturer VS. Supplier
If you’re looking to get your product made in China, you’ve probably already heard the terms “manufacturer” and “supplier” thrown around a lot.
They seem to be the same thing, right?
Yes, but also no!
Though the two words are closely related, they are not always meaning the same person in the manufacturing industry.
Generally speaking, a manufacturer would be considered more of an in-house entity that operates as your micro-factory with all the machinery and workers required to create your product from start to finish.
Suppliers are those who supply goods or services; but they can sometimes also act as manufacturers, wholesalers, or distributors who purchase existing brands and products (usually from somewhere else).
It’s imperative to make sure that you understand the difference between “manufacturer” and “supplier” and figure out what kind of services they can provide for your business.
If you’re a newcomer to the market, make sure to work with someone who doesn’t take advantage of inexperienced clients.
Before signing any contract or making any upfront payment, it is important to know if your manufacturing partner is qualified for what they produce and has an official business license to run a company in China.
2. Manufacturing Costs Vary Across Different Cities
Though you may think that manufacturing costs in China are lower than that of western countries, the prices in manufacturing among Chinese cities differ significantly.
One of the reasons for this is that China has undergone enormous changes and development in recent decades. This explains why the average monthly salary differs between cities or regions.
In this case, you may find out that some cities display relatively stable manufacturing cost patterns while some raise their manufacturing service fee due to the increment in labor costs and land prices.
The other main reason is that China is paying great attention to improving its high-end manufacturing capabilities. Now, more and more high-tech manufacturing factories are well-established to pursue productivity and lower costs.
3. Finding the Right Manufacturer in Your Area
Locating for a manufacturing company that produces what you need is easy unless you confirm everything you need beforehand.
The main thing you should know is that many manufacturers usually stick to one specific type of product.
For example, it may be hard to find someone who can make “home appliances“ but it’s easier to reach a blender manufacturer who specializes in this field for years.
See the difference?
So when reaching a potential manufacturer in China, keep in mind to find someone who has experience and expertise in your product area. Otherwise, it will end up costing you even more than if you do the job yourself.
4. Don’t Skip Quality Control
Product quality is a major factor for western businesses because defective products can lead to financial losses as well as angry customers who will complain about your company sending them an unsatisfied product.
When outsourcing your production to China, it isn’t enough just to send your idea or design to a factory and expect them to produce the item correctly – even though you deeply trust them.
Make sure you’re thoroughly involved in each step of production and conduct quality control so that you can be confident that the manufacturer is capable to deliver products that meet your expectations and the quality standards.
5. Delivery Delays Can Be Normal
Manufacturers often negotiate with multiple foreign companies at once, so there’s no guarantee they will give you their full attention or work quickly enough to meet your deadlines.
Make sure your manufacturer gives you a detailed production plan so you have an idea of how long it will take to produce your items.
Another factor worth considering is how long it will take for the items to arrive once they are shipped.
The delivery time can vary depending on where the factory is located, where you want to receive the product, and even if there are any Covid cases in the region
So you have to remain realistic about the lead time and deadline. Keep communicating with your manufacturing partner so you can receive an update on your production process.
The Solution For Your Manufacturing Project
If you haven’t yet worked with a manufacturer in China, you have to list your needs and expectations before making a final decision.
Also, never choose the one who offers the lowest price, work with those who have long-term experience and know how to help your business.
Shield Works can be your best manufacturing partner. With our British ownership and management background, we take pride in our over 17 years of international project experience and excellent team. Contact us for a no-cost consultation!
Contract Manufacturing Services in China: A Guide on What to Consider
Let’s say you’re a small business owner and have just received an order for 500,000 watches. What do you do?
Well, first off, you’re probably feeling pretty overwhelmed! It’s a big deal to get that kind of business, and you want to keep them coming back for more. All you need is the resources to fulfill their order.
You’ve heard about contract manufacturing services in China, but you don’t know where to start. You can’t afford to make a mistake, so you need to be sure that whoever you choose understands your needs and offers quality products at competitive prices without compromising on safety or environmental standards.
Instead of trying to choose the best candidate on your own, read on for everything you need to know to make the right choice.
Quality Control and Inspection
You need to be sure that the products your company sells meet or exceed quality standards. Ask manufacturers about their quality certifications. You should also consider whether they have industry-specific certifications, such as FDA certification.
Ask about the steps a manufacturer takes to ensure quality, including inspection techniques and certifications. You also need to consider whether they use third-party testing. If they do, ask which organizations they use and what types of tests they do most frequently.
Cost
With so many variables involved in your product’s production and delivery, it’s not always easy to determine how much something will cost. The price of your final product will depend on several factors. So, it’s best to work with a contract manufacturer who can provide you with a comprehensive quote. This will help you understand all the costs involved in production and shipping so there are no surprises down the line.
Capabilities
When you’re looking to manufacture a product, you need to consider the capabilities of your supplier. You should ask:
- What type of products they can produce
- How many units per month they can produce
- At what price it will be possible to get them manufactured
For example, if you want to produce 500 units per month and require a high-quality material for your product, then finding a supplier who can do this would be ideal. However, if you only need 100 units per month with no specific requirements for the materials used, you have a wide range of options. Assuming you’re looking for the lowest price per unit, then your best bet is to find a supplier with no minimum order size.
Longevity
If your supply chain is disrupted in any way, it could wreck your bottom line and your business. You should carefully evaluate a potential manufacturing partner’s financial stability and performance record before choosing them for your product.
Communication
Contract manufacturers in China have low-cost labor, which can be a benefit if your goal is to reduce manufacturing costs. However, this also means that you may face communication difficulties because of language barriers. To circumvent this issue, consider working with a contract manufacturer that has experience communicating with Western businesses.
If you have limited opportunity to communicate with the production facility on an ongoing basis, then you should consider whether another manufacturer might be better suited for your needs.
Production Flexibility
It helps to choose a manufacturing company that’s willing to add to their production tools when necessary. For instance, some manufacturers only produce with injection molding equipment. If your project requires casting or machining equipment, then you’ll need to find a different company.
But if you can find a company that’s constantly updating its machinery and processes, then you should have the flexibility to make any changes that might be necessary.
Experience
A manufacturing company will only be able to produce your product if they understand the design specs and goals. If you’re working with a facility that doesn’t fully grasp your project, then it may not come out as expected. To avoid this problem, try to choose a manufacturer with experience in your industry or with similar products.
For instance, when choosing a manufacturing company for plastic injection molding projects, you should look for companies that have produced high-quality plastic components in the past.
Certifications
The quality of your products hinges on the quality of your manufacturing partner. It’s important that they have the right certifications and follow best practices. Manufacturers who don’t have certifications should be avoided at all costs, as they represent a risk for both you and your customers.
There are many certifications that manufacturers can earn, like ISO 9001, ISO 14001, and ISO45001. However, there is no law requiring a contract manufacturing service to have any particular certification. Each organization has its own standards for what is required for membership or accreditation.
Some industries also require specific certifications from their suppliers to sell their products to specific markets. For example, food packaging or medical devices require FDA approval before being sold in the United States’ market. If you’re planning on selling internationally, then make sure that any contract manufacturer you work with can meet those requirements as well!
Choose Reliable Contract Manufacturing Services
Getting the help of contract manufacturing services can help bring your ideas to life. At Shield Works, we have a wide range of capabilities and services to help you design, prototype, and manufacture your products. If you’re looking for engineering support to help you create the right product, we can do that too!
Get in touch with our team and tell us about your amazing idea. You’ll hear from us in 24 hours!
Choosing the Right Product Manufacturer in China: Contract Manufacturing vs OEM Manufacturing
Contract manufacturing, original equipment manufacturing, and ODM manufacturing, oh my! There are so many different types of manufacturing companies that you can use to fulfill the needs of your business.
When you need to manufacture your product, you will want to pick the one that best protects your intellectual property while upholding the best labor practices possible.
If you are looking for more information about these product manufacturers and how to choose the right one, you came to the right place. This brief product manufacturing guide will cover all you need to know about the common manufacturers and who you can reach out to for more guidance.
What Is Contract Manufacturing?
Contract manufacturing is when you outsource part of your product’s manufacturing process to a third-party company. A large majority of companies use this method, so they don’t have to handle the bulk of their production process. Instead, a contract manufacturer manufacturers products for the OEM, producing items based on a set formula or design.
Advantages of Contract Manufacturing
A significant advantage of using a contract manufacturer is that they can help you create your products without investing in machinery or equipment. This also allows you and your business to minimize labor costs, free up capital, and commit additional resources toward research and development. Contract manufacturers also accept a certain amount of manufacturing-related liability.
Disadvantages of Contract Manufacturing
A major disadvantage of working with a contract manufacturing company is that there is more research and development work. The time to market your product is also a disadvantage.
Because it takes a bit longer to get the product, you will have to wait. Be sure to have a testing and validation plan from the beginning so you and the manufacturer can adjust it over time.
Types of Contract Manufacturing
There is a wide range of contract manufacturing services available. Standard contract manufacturing services include molding, assembly, machining, packaging, and sterilization. It is imperative that you partner with a contract manufacturer that provides the right services needed to support your product.
ODM Manufacturing
ODM manufacturing, also known as Original Design Manufacturer, is a business that creates products designed by you, but they are based on existing products. When you work with these types of companies, you purchase items that the factory already produces; you can just customize the items and add your logo.
You don’t always have to change the logo or design unless you want to. China is currently the leading ODM manufacturer, and most manufacturers outside of China are contract manufacturers.
Advantages of ODM Manufacturing
When you work with an ODM manufacturer, you don’t have to wait too long to market your product. There is also a much lower introduction price since you don’t have to go through the research and development process. ODM manufacturers also have strong expertise in technologies and in the market space.
Possible Issues with ODM Manufacturing
ODM manufacturers have the ability to send out your products quickly because they already have the item on hand or the specifics of the item on hand. A significant issue that comes with working with an ODM is intellectual property and who owns the design of the product even after you add customizations.
For the most part, the manufacturer created most if not all of the design, so they technically own the product’s intellectual property. This means that you own the copyright to the branding.
If you decide to work with an ODM manufacturer, make sure that you check the product you wish to customize. If the product looks similar to another name brand company, they can sue you for using their intellectual property.
OEM Manufacturing
OEM, also known as Original Equipment Manufacturer, is a company that creates a product based on the blueprint you send in. When you create a partnership with an OEM manufacturer, they expect you to provide them with a product specification sheet and a product design document so they can make your product properly.
There are several different varying degrees of original equipment manufacturing companies. Some of them already have a product on site that they can use to make changes to, or you can start from scratch and create a brand new product.
If you plan on creating a brand new product, you may want to reach out to a contract manufacturer for more assistance. With most original equipment manufacturing projects, the client must create custom molds or some other tooling to create the item.
If the OEM does not already have what you need, they will need time before production to get that all prepared. This is a cost most clients have to bear upfront, but there are other manufacturers who purchase molds and just charge you after the fact.
Intellectual Property with an OEM
Since you’re the product designer and you created the product specification sheet, you most likely own the intellectual property of your product. Since you’re also paying for the parts of production (tooling and molds) and you have contracts that prevent the manufacturer from using the specification of your product, the intellectual property is yours. Just to be safe, make sure that you protect your intellectual property with the appropriate documents.
Advantages of OEM Manufacturer
The time to market with an OEM manufacturer is typically relatively short. This is because the original equipment manufacturer already makes products similar to yours, and they can use their current suppliers. Working with an OEM manufacturer comes with lower research and development costs.
Disadvantages of OEM Manufacturer
Although working with an OEM manufacturer comes with several beautiful advantages, a few significant disadvantages can affect your project. For example, if you have to change suppliers, you can’t just make a quick switch.
You will have to change up your entire supply chain. This means you will need a new component supplier as your OEM won’t disclose their component supplier to you.
Because these sub-suppliers are not disclosed to you, there is a chance the OEM could switch out sub-suppliers without you knowing. This could significantly affect the quality of your product.
How to Find a Product Manufacturer
Before you can look for the right product manufacturer for your needs, you must decide if you want a factory overseas or here in the United States. The best solution for your business needs depends on your personal goals and priorities.
Advantages and Disadvantages of U.S. Manufacturing
Using a factory in the United States does come with a few benefits. For example, when you use a manufacturer in the United States, you have more direct control over overproduction. You have the opportunity to visit the site more regularly, and you avoid dealing with international shipping logistics and tariffs.
Unlike overseas factories, manufacturers in the states allow you to order smaller batches of products. Overseas, they have minimum order requirements that you must meet before they fulfill your order. If you don’t meet the minimum, they may add an additional fee.
One of the most significant disadvantages of working with a supplier in the United States is the fact that they cost more. Sure, you may have access to the supplier, but they typically charge more since they are closer.
Advantages and Disadvantages of Overseas Manufacturing
A factory overseas is almost always cheaper than using one in the United States. When you look for a product manufacturer overseas, you will notice that you have more options than you do in the United States.
This means you will have a large pool of applicants to choose from who have experience creating products similar to yours. The biggest challenge that comes with outsourcing is the longer shipping times and handling of import/export regulations.
There is also an issue of a possible language barrier. Thankfully, there are several different companies that have a dedicated representative that can communicate your needs in your language.
Look for a Product Manufacturing Plant
You can attend several networking events for more information on other Chinese manufacturing plants. International trade shows in the United States are another great resource to use when looking for the proper manufacturer.
When looking for the right company, make sure they make products similar to yours. A manufacturer may be eager to let you know that they can make it, even if they have no experience doing so.
Although this may work in some factories, that does not work with all of them. If they offer to create the product but have no experience, the product may lack quality.
United States Exports
Lastly, it would be best if you looked into a manufacturer that regularly exports products to the United States. These manufacturers already have experience complying with product safety standards, quality standards, and packaging requirements.
Look for a company that is a Wholly Foreign-Owned Enterprise. Wholly Foreign-Owned Enterprise, also known as a WFOA, is a company that has production facilities in China. Still, the ownership and management of the company are run by non-Chinese teams. Depending on who owns the facility, you can expect the same quality and service that you would receive from a western company.
Protect Your Intellectual Property
As mentioned earlier, regardless of who you use to manufacture your products, you will want to protect your intellectual property at all costs. Without that protection, you risk having the manufacturer sell your product to another client.
You can use trademarks, copyrights, and patents to protect your intellectual property. Make sure that the protection you use is also designed for international situations.
If you would like to, you can use an NDA. An NDA, or a non-disclosure agreement, is a legally binding contract prevents other companies from copying your product. It would be best if you made potential manufacturers sign an NDA before you get any quotes.
Questions to Ask the Manufacturer
Before you partner with a manufacturer, you must ask a few questions to ensure they are the right fit for you. For example, make sure to ask the company about their labor practices.
The last thing you want is to work with a company that uses unfair labor practices. Not only is that inhumane, but it can also damage the reputation of your business.
Ask to see their business license and any documentation that proves they have a solid quality control system. It would also be best if you asked about their proof of inspections or their third-party audits. If a company refuses to give you that information, they may be hiding something.
Additional probing questions to ask your potential manufacturer:
- What is the price for production?
- What are your company’s payment terms
- Do you have a minimum order quantity?
- How long does it take to get the product exported
- Who are some of your clients?
- What experience do you have making products similar to mine?
- Do you charge for samples?
- Is all of your work in-house?
- Do you use sub-contractors?
Asking these types of questions can help you determine which manufacturer is best for you and your needs. Don’t be afraid to ask clarifying questions. You’re hiring them to do a service for you at the end of the day.
Partner with the Best Product Manufacturer
Picking out the right manufacturer does not need to be a complex process, but it can be challenging if you aren’t sure what you’re exactly looking for. Once you figure out which type of product manufacturer you want to use, check out their reviews and business licensing.
You want to make sure you partner with a reputable manufacturer that can make your product just the way it is intended to be made. Contact us now if you are ready to learn more about your manufacturing options. We also offer warehousing and logistics if needed.
Reasons the China Manufacturing Boom Is Actually Good
China produces over 28% of the world’s manufacturing. Because of the China manufacturing boom, it’s not surprising that China’s gotten the nickname “the world’s factory.”
But why is there an increase in China manufacturing? How can it benefit your business? And how has the COVID-19 pandemic affected global relations?
Read this guide to find out everything you want to know about the China manufacturing market and why it’s actually good for your business.
What’s Driving the China Manufacturing Boom?
There are several factors that contribute to the boom in China manufacturing.
For most people, the lower cost of labor is probably the first factor they’d consider. There are lower wages in China. This makes manufacturing much cheaper.
China is the most populous country in the world. This means there are more workers than jobs. That keeps the cost of labor relatively low.
However, certain provinces have begun enacting more laws to protect workers. This includes installing minimum wages throughout the country.
Manufacturing is still cheaper when outsourced to Chinese factories. But, the cost of production isn’t the only consideration you should take into account.
The Chinese-U.S. Business Ecosystem
Manufacturing isn’t the only part of industrial production one must consider. In fact, there is a large network to consider that includes:
- Suppliers
- Distributors
- Government agencies
- Customers
American companies such as Apple utilize China’s efficient supply chain. This efficiency helps them to keep costs down and margins high.
Most U.S. companies operating in China find it unrealistic economically to complete productions on U.S. soil.
Additionally, business relations remain strong between the U.S. and China. Though political tensions may be high, many businesses feel confident in their Chinese manufacturing relationships.
In fact, this is the most confidence many businesses have felt since the beginning of the COVID-19 pandemic.
Lower Compliance Standards
Product assembly in China does not have to meet certain guidelines American businesses must follow. For example, China is much more relaxed about the following standards:
- Involuntary and child labor
- Health and Safety Guidelines
- Wage laws
- Environmental protection laws
Though labor laws are changing in China, they are still far less strict than in the United States. This helps to save on labor costs.
Chinese factories also save on waste management. This is because environmental protection laws are not strictly enforced.
Savings on Taxes and Duties
In 1985, China enacted the export tax rebate policy. This policy abolished double taxation on exported goods. This was responsible for making Chinese manufacturing much more attractive to potential investors.
Exported goods in China are subject to 0% value-added tax (VAT). That means these products are exempt from VATs.
Chinese products are also exempt from import taxes. This keeps production costs low, which attracts more investors.
International Expansion
China is a massive pillar in the Asian market. The Asian market in general is growing at an extremely rapid rate.
Doing business in China helps to expand your reach to these valuable Asian markets.
These expansions can multiply your company’s business opportunities exponentially. You also streamline your ability to introduce products into markets across Asia, especially Chinese markets.
How Did COVID-19 Affect Chinese Manufacturing?
It’s no surprise that the COVID-19 pandemic affected the boom of Chinese manufacturing. China was, after all, the first country to experience the effects of the pandemic.
It is common practice for Chinese businesses to take a week off for Lunar New Year celebrations. In 2020, this break was extended. This was China’s attempt to stop the spread of COVID.
Unfortunately, like many American businesses, Chinese businesses experienced delays in production. Many workers became sick, slowing down manufacturing.
Additionally, issues in the global supply chain created fear around reliance on outsourced manufacturing. This included Chinese manufacturing.
Chinese Recovery in a Post-COVID Economy
However, Chinese factories continued on. Many of them capitalized on mask production to keep them operating throughout COVID.
Now, it appears that China’s manufacturing is on the come-up. However, since the roughest days of the pandemic, it would appear China has made a full recovery.
How Did the US-China Trade War Affect Chinese Manufacturing?
While in office, US President Donald Trump attempted to decouple the Chinese and US economies. This created a trade war that affected, and still affects, the manufacturing industry.
However, an annual member survey by the American Chamber of Commerce in Shanghai revealed that 92.1% of its members had no plans to leave China.
Even with Trump’s push, leaving Chinese manufacturing was not an attractive prospect to many companies. Most of these companies have revenues above $500 million USD.
How Is China Upgrading Its Manufacturing Industry?
The Chinese government’s goal is to have 30% of its gross domestic product (GDP) come from new industries. So what are they doing to meet this goal?
By 2025, China plans to have strong innovation in its manufacturing industry. They expect to use these innovations to drive high-quality growth.
Some manufacturing innovations China is currently working on include:
- Sharing production facilities
- Sharing tools and equipment amongst facilities
- Making intellectual resources such as designs and development practices public use
Their goal is to use this plan to boost resource allocation. This will help to improve efficiency and drive higher ROIs for business manufacturing in China.
Take Advantage of the Chinese Manufacturing Boom
So, you can see how Chinese manufacturing is a valuable market for American businesses.
The factors driving the China manufacturing boom can help to lower costs and boost your ROIs so that your business sees significant returns. Plus, you can streamline your business for introduction into the up-and-coming Asian markets.
Contact our team if you’re ready to begin manufacturing in China. With Shield Works, you can rest easy knowing you’re making the right choice for your business’s manufacturing needs.