Outsourced manufacturing can offer a lot of benefits to startup companies, but it isn’t necessarily something that every business needs. Here are the top five reasons why outsourcing your manufacturing to China can be an asset to your startup company, and also why it may not be so beneficial to your company at all!
Direct Cost Savings
When you are a startup, you have very little money. There is no reason why you shouldn’t take advantage of those who do. With outsourcing manufacturing jobs overseas, even to a country like China where many deem the average cost is rising, your company can still save 20% – 50% on cost of goods sold, especially considering the quality China can achieve. In many cases, an outsourcing relationship may offer better quality than a domestic manufacturer at a lower price point, too. Saving costs while keeping profits high is essential for startups as they tend to lose money in early stages of business. While it might seem counterintuitive to give up control over such a crucial part of your business by outsourcing manufacturing jobs overseas, having more money in your pocket is really something that any company needs right out of the gate.
Quality Control and Oversight
If you’re launching a startup and have no prior experience, then you may not realize all of those things that can go wrong during product design and production. Sure, you might have some great ideas about how your product should look and function, but it might require extensive research to confirm how feasible your plans are. A factory has years of experience in designing products and manufacturing their own—there’s no reason why you should reinvent the wheel. By outsourcing your manufacturing to a company in China, they can help oversee much of your product development with little hassle on your end.
Faster Time-to-Market
Instead of trying to build and engineer a product in-house, startups can begin selling their product earlier. This allows them to get feedback from customers sooner, too, which helps iterate on design and functionality. It also makes it easier for startups to manage limited resources; instead of trying to do everything themselves (and with fewer staff), outsourcing manufacturing takes care of a big chunk of their product development.
Lower Product Development Costs
Chinese manufacturers can help you save on development costs by offering high-quality products at a low cost. You’ll enjoy being able to cut out production middlemen, which will make it easier for you to complete your business plan. While outsourcing may seem like something that only big corporations do, startups can also benefit from it. The key is knowing where and how outsourcing should fit into your business plan. But before we get into that, let’s take a look at why companies use outsourced manufacturing in China in the first place.
Access to Expertise
Large scale factories in China and elsewhere have experts on staff that have worked for decades in manufacturing. Your startup does not need that much know-how up front. They just need a factory capable of taking their design and making thousands of units with high quality standards. This lets startups do what they do best—inventing new products—and gives them access to people with expertise who can work on development, sourcing, quality control, shipping logistics and more.
C2W is a one-stop manufacturing solution provider founded and managed by British and based in China, with our own production facility and in-house bilingual engineers. If you are interested in getting to know more about outsourcing your manufacturing to China and developing your product, please feel free to contact us.
