Differences Between Domestic & Overseas Manufacturing
Manufacturing is one of the key industries for any economy, if not the most important one. It’s important that you have a good understanding of all your options before moving forward so that you have a clear idea of what solution works best for you.
Here we’ll go over the main differences between domestic manufacturing and contract manufacturing in China.
The transportation will be significantly faster ordering domestically rather than overseas. You generally don’t have to deal with sea transit times, and you also don’t have to deal with customs. A shipment made domestically should never take more than a week or two to arrive.
With overseas manufacturing, you need to have shipping arranged, customs brokers lined up to process the shipment, and you should expect the shipment to take 6-8 weeks to arrive unless you have a shipment made by air. This can be compensated for keeping a close track of your inventory and ordering early enough to give you plenty of time to have your shipment arrive.
Domestic shipping will also almost always be cheaper due to shorter travel distances and the lack of having to pay for any tariffs.
Importing from another country means that not only with your own countries import/export laws, but theirs as well. Sometimes China may have export laws that restrict items so they can’t be exported to the U.S. This will probably not apply to your product in most cases. However items that have potentially dangerous chemicals or other hazardous materials might be restricted. If you feel your item might have materials that would be deemed as dangerous, you can check with a customs broker to see if it can be exported.
Domestic lead times are often faster for smaller to medium sized orders. However Chinese factories are built for mass production and have the infrastructure to quickly handle the largest of orders.
The much shorter transit time for domestic orders does often mean that the overall lead time for a domestic order can be around a month shorter. Repeat orders from China can have an average of 3 months production and shipping time, and the domestic manufacturing can be around 45-60 days. That is a rough estimate, as every product will have shorter or longer production times.
Note that first time orders are usually longer due to the time it takes to produce samples and or tooling and molds.
With domestic manufacturing, labor costs tend to be significantly higher. This is often due to labor unions and higher minimum wages. The Chinese currency also isn’t as strong as the dollar, also allowing for lower costs in China.
Supply and demand of materials also affects the price of products. China has a surplus of raw materials that has helped them lower their prices in a way that domestic materials can’t.
Even with the current Chinese tariffs sourcing from China is the more cost efficient way to get your products made.
We take great care to help our customers who want to manufacture in China do it safely and efficiently. We have people in China that handle sourcing, negotiating, and making sure the quality control is up to standard. We have been working with these companies for decades and would be happy to see if we could help you with your project.