I have been in the promotion industry for more than16 years and purchased products from China for many foreign customers. During this period, we also visited more than 600 Chinese factories. In fact, more than half of China’s factories are relatively small, some of which have fewer than 10 workers. Even lots of Internet forums and blogs are circulating that the environment of small factories in China is terrible. This has led many buyers to have doubts that small Chinese factories are really capable of fulfilling export orders. Today, I will share three types of small factories that are very common in China, which I hope will be helpful to you purchase promotional products from China.
Self-employed factories
What are self-employed factories? In short, there is only one person in this factory. What?? only one person?? Yes, you read that right. But these factories generally have the following 2 characteristics:
First, because of the lack of sufficient manpower to rely mainly on molds for production, their products are generally plastic-type products, tinplate products, etc.
Second, in many cases, they provide accessories, not finished products. Because usually, the cost requires enough workers to assemble and package the goods.
Therefore, the most important source of business for such self-employed factories to undertake some orders for accessories from large factories. For example, a large plastic product factory receives an order for a quantity of 200,000 plastic lunch boxes, but the buyer requires the factory to deliver them within half a month. Then the factory will hand over the production of the lunchbox lids to these self-employed factories, and transported them to the plastic factory’s workshop for inspection when the lids are finished, and final assembly.
Home workshop
About two months ago, we purchased a batch of gloves for our client, and after comparing quotes from many factories, we decided to contact the supplier named Li Zhang and visited him. According to the address provided by Mr. Zhang, we went to a village about 50 km away from our office. When we arrived, there were 6 workers in the workshop who were about 50 years old and working.
Frankly, we are not surprised to be confronted with such a scenario. The biggest costs of many labor-intensive industries come from labor costs and site rental fees. If rent a factory in a remote rural area and hire local villagers for production, this can save a lot of costs. In the ensuing conversation with Mr. Zhang, this was also confirmed. He told us that he has been in the business for more than 7 years. When receiving orders from trade companies, he purchases raw materials and hires local villagers to produce. Since his factory is far from the city area and the workers are local villagers, these measures have saved him at least about 25% of the cost. When the goods are finished, they will be stored in the warehouse uniformly, waiting for the QC of the trading company to come to inspect the goods.
This type of factory is a good choice for products with relatively low added value or low technical content requirements. This is because workers producing such products do not need to be trained or required to have high production skills. And the most important point is that the prices of these factories are very competitive.
Small-scale factory
In fact, nearly a third of our suppliers are factories of this type. We have a factory that supplies luggage bags, which is a good example to describe this kind of small factory. The factory is also located in the village and has been in operation for nearly five years. Like the aforementioned Home workshop, these small factories are located in villages. The major difference between them is that these small factories have a clear organizational structure, a certain level of management capability, and a younger workforce that can process relatively complex products.
The building shown below is the factory building of the small luggage factory I mentioned.
The first floor is used as a warehouse, the second floor is the production workshop, and the third floor is the packaging workshop and sales office. The entire factory employs 32 workers, including 3 managers. Each person has his or her own job, a clear division of labor and special staff to inspect raw materials and finished products.
Because of the better management of such factories, except for their own smaller scale, there is almost no difference with some big factories, but the management cost is much lower than the general large factories. Therefore, for some orders of relatively large quantity and for products with certain technical content, these small factories are a better choice.
To sum up, what I want to express is that most of China’s small factories do not have a bad production environment and poor product quality as the rumors.
In fact, these small factories have an advantage in producing labor-intensive products because they can better control labor costs. For these small factories, their biggest disadvantage is that they do not have professional international trade sales personnel, and they do not understand the rules of international trade and the buying habits of international buyers.
This requires trading companies to step in and better show their products to international customers. For foreign buyers, purchasing from these small factories through professional trading companies can not only save costs. The most important thing is that some unreliable factories can be eliminated through trading companies, and the QC department of trading companies can assist in inspection to ensure the quality of goods.
If you have more questions about these small factories, such as whether they can pass BSCI or SEDEX social responsibility inspection? Or, I have a new design product that I want to find these factories to produce, but can they make sure that our idea is not leaked? Please leave me a message, or contact me through my email sales@plentmax.com and I’ll be happy to answer your questions.
In addition to factories, a large number of trading companies exist in China. So, are the factories really cheaper than the trading companies? I also wrote another article – The price of the factory cheaper than the trading company? believe that you will get an accurate answer from this article.
