How to know the real total cost of the products you buy in China?
China – the economical-superpower, is a crucial part of nearly the world’s 3/4 countries’ economies. Because of such immense control on international trade, it is a million-dollar question for international traders to know the real total cost of the products in China.
You are reading this blog as you are a trader or some kind of e-com investor, and you may have got tired of finding different wholesale prices of the same products.
It’s too complicated to find the real total cost of the products you buy from China. And you can’t survive in business without getting the real total costs in this saturated and highly competitive business era.
In this blog, we will share tricks to know the real total cost of products in China. Keep reading the blog to seal a better deal and boost your revenue this time.
Chinese traders always have a cushion to bargain while making trade deals. They seem ready to cut their margin as compared to other countries’ manufacturers and suppliers. How do they manage to offer unbelievable quotations? And how can we get an idea of the real total cost of the products to buy from China?
Well, you may have to look at the following factors that can impact on offered prices. A deep understanding of these factors will enable you to get the real total cost of products you buy from China.
The first and foremost factor to notice is to whom you are buying? Whether they are manufacturers or suppliers. You have to make sure that you are working with a manufacturer in China to get the real total cost of products.
It’s a separate story about how to find a manufacturer in China. In short, you should follow the enlisted tricks to ensure that you are working with a manufacturer, not a supplier.
- Ask your Chinese exporters to provide factory pics and video call contact like zoom. Make a random video call and ask for the factory visit. They will have no issue getting you a virtual tour of their factory.
- If you have found a supplier from Alibaba, check whether they have listed themselves as the manufacturer or not. And also get time to read reviews, especially the bad reviews, if any. Bad reviews let you know the real issues a buyer can face while working with this particular manufacturer.
- Ask their customer support executive to provide a Chinese manufacturing license and business card.
- The easiest and most reliable way is to hire a company like verifyfull to check the legitimate status of any Chinese company.
Make sure to don’t leave a stone unturned while looking for an original manufacturer as suppliers or traders can never offer the best prices because of the unreal total cost.
In case your team failed to find an original manufacturer, your business will suffer because of the following reasons,
- Suppliers or traders can’t offer the best prices as they have to keep a cushion for themselves, like any broker.
- There are risks of late deliveries as suppliers themselves depend on other parties.
- You may find quality issues because of third-party high margins.
- Suppliers will be reluctant to offer any compensation in case of any delay or non-conformance.
Manufacturer location in China should be another matter of concern for you after finding out the original manufacturer.
Manufacturer location is important because of the following two vital factors,
- labor Rate
- Shipping Cost
Labor rates have a direct link to the real total costs of the product you buy from China. In fact, most of the manufacturers’ sign contracts on hourly labor rates for international brands’ product manufacturing.
So, because of the varying hourly labor rates in China, you may find the different real costs of products from varying manufacturers in China. If you’re interested in getting a minimum offer from a Chinese manufacturer, you may have to consider the factory location in China before initiating the bargaining.
China has different hourly labor rates in its different provinces, from a minimum per hour labor of 11.6 RMB in Loudi to 25.3 RMB in Beijing.
Shipping costs have an imminent impact on the product’s total costs or offer you get. It is crucial to calculate the shipping costs precisely, and many companies failed to do so.
Factory location has a direct impact on shipping costs. For fast and cheaper shipping, transportation infrastructure plays a vital role. And China has a remarkable physical infrastructure in all its provinces. But the manufacturers in cities with ports have an extra edge to deliver pretty fast and at minimum shipping cost.
You need to find a manufacturer of a particular location with a port and minimum hourly labor rate in China. This manufacturer will offer you the real and minimum cost of products you buy from China.
Shipping class – While signing the contract, carefully read the shipping class. Few manufacturers add a shipping class as ‘Importer will be responsible for picking up the goods from the factory door.’ It will cause a notable increase in product cost and erode a large portion of your margin.
FOB – Free on-board shipping class is what you may have to get into your contract. In FOB shipping, the manufacturer will be responsible for delivering your order to the Port. Your company will bear a particular segment of shipping expenses from the port to the destination country.
The quality of the product is a prominent game-changing factor in the varying product cost. If you find a giant difference in a product’s real cost offered by different manufacturers in China, there must be a wide quality gap among their products.
While looking for the real total cost of a product to buy from China, keep the quality factor the notice as Chinese manufacturers are known for providing tens of quality options to meet the demands of varying markets.
The real total cost of products you buy from China depends on multiple factors. And this cost could vary from one manufacturer to other. You may need to do deep research to check all the above-discussed factors or should take help from companies like Verifyfull to know the best and real price of products you buy from China.