The Pros of Outsourcing Product Manufacturing to Asia

When people see a “Made in China” label, they often associate it with low quality products. This belief may have been true five years ago. In recent years, China’s outsourcing providers have been steadfast at improving the quality of the products they manufacture. They are also jumpstarting initiatives to develop education, training, and other supporting infrastructure that would support their vision for high end products.

The Situation – the Growth of Global Outsourcing

A growing number of companies, from small enterprises to large multinational corporations, have adopted outsourcing to assist them with financial pressures and competitive pushes. Initially, outsourcing the manufacturing of products was viewed as a way to circumvent minimum wage laws and local tax laws. Today outsourcing is seen as a way to achieve optimal business models and to tap into a wider range of knowledge services and research and development. This is especially the case in industries that demand continued product developments.
As the outsourcing industry becomes more sophisticated, overseas suppliers have grown to accommodate more refined requests beyond manufacturing goods, such as legal services, call centre management, graphic and web design, e-learning, and research and development (R&D) to name a few. Suppliers are also managing some functions of human resources tasks, such as employee benefit management and payroll. You name a product or service, and we are sure there is a supplier or offshore company to make your vision a reality.

The Pros of Outsourcing Product Manufacturing to China or other parts of Asia

1. Reduced Operational Costs

Outsourcing the manufacturing of your products can mean huge cost savings for you and your business. Employee compensation costs, payroll costs, and office space expenses are eliminated and allow you to free up essential resources for other administrative and operational purposes. As well if you are in an industry that has seasonal influxes in sales, you will not have to worry about hiring and laying-off staff and the government regulation repercussions thereafter. Your outsourcing supplier can handle all that for you.

2. Improved Quality

Improved quality can be achieved by using suppliers with more expertise and more specialization. As outsourcing becomes more competitive and new entrants are emerging each day, new sources of product differentiation is crucial to maintaining the loyalty of existing customers and attracting new ones. Thus, we are witnessing a shift from manufacturing products at a low-cost with no emphasis on quality to manufacturing products at top grade with focus on continual improvement. That means no cutting corners, sourcing top-quality products, and employing staff with the appropriate skills and background knowledge. This is where the help of a professional sourcing agency with experience in Asia helps tremendously.

3. Level the Plane Field

The majority of small businesses are not able to afford the resources and the budget that larger companies maintain, which puts them at a major disadvantage. Outsourcing is beneficial for those companies because it helps them act “big” by giving them access to resources that they are inexistent in-house. By tapping into the resources and the expertise of overseas suppliers, smaller firms are able to prove to consumers that they are a force to be reckoned with.

4. High Output in Less Time

Some businesses in North America are limited in capacity and time. When the demand has sudden increases and for short periods, many businesses are unable to keep up and end up losing customers. This is never the case with Asian suppliers that solely rely on outsourcing to stay afloat. When you outsource production, you are able to hire more people to complete more volume-demanding productions at an affordable price. There are certainly ethical considerations that must be taken into account, but not all facilities are equally exploitative. Do your due diligence.

About Luxe Global | Outsourcing Agents | China and other Parts of Asia

Luxe Global is the chosen partner for many large and small companies who need assistance when buying or sourcing items from Asia. At Luxe, we have the most talented, tenacious and hard-working team, that are entirely focused on quality, accountability, service and integrity. This allows us to offer a customer experience second to none. With over 45 combined years of experience, we understand the entire sourcing process, and have talented people (working exclusively for Luxe) represented in North America and Asia.

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