3 ms·
Labour is 4x cheaper. Bill of material cost is going to be pretty much the same everywhere. Depending on the product, the labour cost of manufacturing might onl
by leoedin 4y ago
Labour is 4x cheaper. Bill of material cost is going to be pretty much the same everywhere. Depending on the product, the labour cost of manufacturing might only be 20% - so that 4x turns into a 15% saving on cost of goods. That needs to be contrasted against shipping costs and the overhead of managing a Chinese factory.
- christophilus 4y ago> Bill of material cost is going to be pretty much the same everywhere. A decade or so ago, my dad analyzed a part that came from his Chinese competitor. The finished Chinese part, including shipping, cost less than my dad’s company was paying for the raw materials. He was still able to compete by producing a much higher quality product (found in nuclear power plants, chemical processing plants, oil rigs, and other places where quality really matters). Anyway, my point is, I wouldn’t assume China is only cheaper due to labor.