Sourcing To China Manufacturers – A Sound Business Plan?

Posted on Mar 23, 2015 | 0 comments | Connect with Nancy Smith on Google

Sourcing To China Manufacturers – A Sound Business Plan?

Outsourcing production to a manufacturing company carries with it a certain stigma for some people. Most of society, when they hear the term outsourcing, they think of only one thing —eliminating jobs from the local workforce and giving it to overseas manufacturing companies. Although it’s most likely the case, manufacturing companies have plenty of reasons for opting to outsource their production to qualified offshore sourcing companies, and the most common of which is cost-cutting. A company has to do what it needs to survive and minimizing manufacturing costs without sacrificing the product’s integrity and quality is an obvious move that most manufacturing companies are willing to take.

Minimizing Labor Costs

One of the most costly aspects in managing a sports team franchise is the salary of all your players. For a team manager, keeping player salaries as competitive as possible without going over the salary cap is a challenging endeavor. The same goes for a manufacturing company. The labor force is among the most important part of any business. With that said, you have to be able to provide competitive wages, decent incentives, and some form of health benefits for your employees in order to keep them happy and be more productive. But as a business manager, you can only do so much. You have to draw the line somewhere, right? One of the most efficient ways to minimize labor costs is by outsourcing some of the company’s operations to an independent party.


Labor and production costs in China are lower than in the West.

Outsourcing some of the manufacturing aspects of your business means lower labor costs, since the manufacturing company you hire will cover the labor expenses. If you outsource your production to China manufacturers, for instance, you will have effectively cut down your labor expenses since the average labor cost in Asia is significantly lower than in most countries in the west. This is why most western-based companies often outsource certain aspects of their operations to Asian countries like China, Vietnam, or India.

Minimizing/Eliminating Overhead Costs

Many of the companies based in the United States, Canada, and some of the countries in Europe outsource their manufacturing operations to offshore manufacturers mainly to eliminate, or at least minimize, overhead expenses generally associated with maintaining a production facility in their locale. Such overhead costs may include utilities like electric, water, and gas, as well as expenses associated with production equipment maintenance. Maintaining equipment important to your day-to-day operations is both crucial and expensive.

Another reason why product sourcing services is an ideal choice for any company looking to become more globally competitive is the fact that sourcing your production operations allows you to become more flexible and efficient. Production efficiency and flexibility are vital characteristics in any manufacturing business. If you outsource your production to a manufacturing company that has more production capacity—meaning they can produce a larger volume of goods, you will have effectively improved your company’s ability to meet the market demand while maintaining a reasonable production cost.

There are quite a few sourcing companies that can help you find the best solution for your production needs. Sourcing agencies like AsianProSource have the capability to match any business with the right manufacturer. You should contact them at 702-616-2298 to see if their business is the perfect fit for you.

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