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How China Produces Wholesale Products

How China Produces Wholesale ProductsUndoubtedly, as buyers around the world continue to order products from China at low-cost prices, China has become the world’s factory.   Chinese wholesalers provide good profit margins on a wide variety of products, manufacturers produce goods at prices you won’t find anywhere else. Retailers, therefore, can quickly dominate their particular niche when buying from China.

Although the economy worldwide is struggling economically, a lot of Chinese factories still have a growth in exporting revenue.  This is especially seen in small size trade.  Any small retailer worldwide, can directly order a large variety of items from China at bargain prices.  You receive the products in a week, flip them immediately, and buy more. Over the past few years, global fast trading market has grown rapidly.  

The question everyone wants to know is, “How do they do it?”  How can they produce quality merchandise at prices lower than just about anyone else in the world?    When combined, there are several factors that have turned out to be a winning combination for China.

  1. Lenient Environmental Laws–The environmental laws are more lenient in China than those the US.  This has caused heavy industry to move from the US to China.  This could be a result of  the strict environmental laws which were enacted in the last half of the 20th century.  The strict laws require expensive environmental protection actions, processes and equipment.  Without that expense, it makes sense that you can have a greater profit.  Businesses can have products manufactured cheaper in countries like China which have fewer, lenient environmental regulations.
  2. Lack of Minimum Wage–There is no minimum wage law in China.  Because of this, workers can be replaced by Chinese workers who may cost a lot less.  The average monthly wage at a Chinese factory is less than a weekly wage of an employee in the US.  Ironically the goods that Chinese workers make are considerably more expensive in China than the U.S.   
  3. Factory Growth/Expansion–Factories in China are constructed and retooled for new products at an extremely impressive speed.  Combined with the low monthly wages, this is an important element of the Chinese.
  4. The Consumer Allows It–The Chinese manufacturing process has added an average of $1,000 per year to the American budget. As long as all countries continue to benefit from the lower prices, the manufacturing industry in China will grow. 

The combination of these three areas definitely works together to result in an overall product that is much cheaper.  Any  Item which is made in China can be obtained by a manufacturer or distributor for much lower prices than the same item being manufactured in the US.  Then, the US retailer can sell the product for a price comparable to items made in America.  Even though they sell it for a lower price, the results is still a much higher profit margin for the manufacturer.

There are very few homes in the world that don’t have “Made in China” on the at least a few labels.  To the average consumer, those have become synonyms for “Great Deal!”

 

 
 
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