Why Are China Products Cheap? Made In China Buying Guide

Source: DHgate, Tag: E-Commerce Tips

Why are products that are made in China so cheap? Well, there are several reasons, which we will discuss in this article.

• China is one of the largest exporting countries in the world, you can find cheap China products everywhere. But people are always asking the question: why are China products cheap?
  To answer this question, we need to keep in mind that the price of a product is determined by the price of its raw materials, the cost of production, and the taxes. These are some of the most important factors affecting the price of Chinese goods. There are several other reasons why goods produced in this country are less expensive. In our today’s write-up, we discuss all the main factors enabling China to sell its products at lower prices than America, Germany, the UK, and other leading economies.

• Meanwhile, if you are considering importing goods from China, you should remember that all you need to do is get in touch with a supplier or seller located in China. You can find verified suppliers on reliable B2B and B2C platforms. There are many reliable China-based online platforms that connect Chinese suppliers and factories to international buyers and businesses. DHgate.com is one of the best platforms you can trust. Check it out today!
  Why is China Products Cheap? – Best Points Answering the Question
  Now, let’s go straight to our main topic today – why are China products cheap? For some years, the price of Chinese products has been lower than the same goods produced in America, Germany, Canada, the United Kingdom, and elsewhere. But those who want to learn why this is so should see the below facts. There are some aspects of China's government, economy, and culture that make it an ideal place for making and exporting low-cost products.
  China's labour is Lower wages
  The average salary of the Chinese worker is about $200 per month and the average salary of the American worker is about $5000 per month. What does this mean? It means that the Chinese have a much lower cost of living than Americans do, so they can afford to work for less money. This means that their labour costs are much lower, which makes their products cheaper. If you were to pay an American $200 a month, you would probably pay him or her more than they were worth; however it would still be less than paying an American $5000 per month.
  Government Incentives
  The major reason for the low cost of China-made products is that the Chinese government has built an infrastructure to support manufacturing. In many cases, the land and buildings are given to the businesses free of charge. The utilities are also subsidized, so electricity and water are cheap. There are tax incentives available, as well as other benefits to companies that relocate there.
  There are also tax breaks for companies that export their goods. All these benefits mean that it is cheaper to build and operate factories in China than in other countries.
  The Chinese government has contributed immensely to the cheapness of Chinese products in that they do offer a lot of incentives to foreigners to set up factories there and buy Chinese components.
  The laws also limit the amount any one person can pay to buy a factory or land for building a factory. If a factory owner wants to sell for a high price, he has to get approval from a government committee that determines whether such an increase in price would be good for China as a whole. If it isn't good for China as a whole, it isn't legal; he has to either sell his factory at his asking price or not sell at all. This ensures that the capital invested in setting up a manufacturing plant or factory is not exaggerated. This will have a direct effect on the prices of goods produced.
  China's long history of manufacturing
  China has had a long history of manufacturing. This means that the Chinese have had a lot more time to perfect their product and assembly lines. Also, most of Asia was colonized by the Western countries during the 19th century, so they had to develop new ways to compete against foreign goods without destroying themselves with western goods that were better made than Asian goods at the time. This resulted in Asian manufacturers learning how to make cheap products that were just as good as western goods for a fraction of the price. Their long history of manufacturing has given them advantages over other countries when it comes to efficiency in production.
  So now when an American company wants to manufacture in China, they know they can trust their Chinese manufacturers since they have been working with them for a long time and know what to expect from them.
  Productive Labor Force
  The abundance of China's labour force is one reason why Chinese products are so cheap. There are more than a billion people in China. This means that labour is readily available. The workday in China is also long, typically from 8 am to 6 pm or later, six days a week.
  Efficient Production Process
  The production process in China is very efficient; it requires less time and materials compared to other countries like the USA where the working process is more complicated and time-consuming, which increases costs and prices as well.
  One of the reasons why products from China are cheaper is that Chinese manufacturers are more efficient at producing things. This is true in a number of different ways. The first is scale. A factory that produces 1 million shirts a year can produce each shirt much more cheaply than a factory that only produces 10,000 shirts a year. In the United States, the average factory size has been shrinking for decades now, while it has been growing dramatically in China.
  Secondly, they use more modern technology. They have access to the same technology as American manufacturers, but they have been quicker to adopt it because they have had less regulation and fewer unions.
  Also, many industries are fully developed in China, so companies can build new plants without having to worry about whether there will be any customers for what they produce. If you want to open a new auto factory in America, for example, you need to make sure that when your plant comes online there will be plenty of customers for your cars or no one will buy them from you.
  Cheap Raw Materials
  If you look at the cost of materials, you'll find they make up a large part of the cost of a product. But the price China pays for raw materials is not the same as other developed countries do. China has low labour costs and little regulation, which allows them to produce goods more cheaply.
  Because of the location of China, many of the raw materials used in their manufacturing are cheaper because they can be transported more efficiently to the factories. Also, many of their raw materials are available locally for very cheap prices. This is why you will see many companies moving from other countries to China.
  There are also many raw materials used in China that are obtained from developing countries. These materials are sourced at very low costs, thus lowering the production cost.
  Lower Shipping Costs
  The shipping in China is cheaper than in other countries because they can ship stuff faster than other countries because they have better roads and more boats and trains that go everywhere, so they can ship faster than any other country.
  Bulk Production
  Products made in China are often less expensive than the same products made in other countries. This is because many Chinese-made products are produced in bulk, and sold wholesale for lower prices. In China, there are large factories that produce goods for entire stores or chains. These types of factories produce a lot of goods at one time, so they're able to keep their costs low.
  The reason for this is because when a factory makes something, it has costs that need to be met from its revenue. A single factory can meet those costs more easily by making more products at once.
  Good are Sold in Bulk
  The products are sold in bulk, which makes them very cheap. Many items manufactured in China can be sold at a lower price because they're sold in bulk rather than individually, so they don't need to include a markup for packaging or advertising or overhead costs associated with retail outlets.
  It is often cheaper to buy something in bulk because you will get the same price per unit. For example, if you want to buy a piece of clothing from China, you would pay less if you bought more clothing.
  If you are thinking about ordering something from China it is important to know where it is made, so you can make sure that you are buying quality for a low price. If a product is made in different parts of the country, then each location has different costs for labour and materials.
  The Currency Factor
  The reason why Chinese labour is so cheap is that the Chinese currency is artificially low. If China suddenly raised the yuan, Chinese products would get more expensive — but they wouldn't be much more expensive relative to other countries. If you could suddenly change the price of a Mercedes-Benz from $50,000 to $100,000, it wouldn't be much more expensive than an Audi.
  China's currency is not as strong as other currencies, so the prices of imports from China are cheaper relative to other countries exports. What’s more, the Chinese currency is pegged to the U.S. dollar, which also makes Chinese imports cheaper than goods from other countries with more valuable currencies.
  Less or no Advertisement Costs
  Manufacturers and suppliers are able to sell their goods at lower prices because they don't spend much money on advertising, or other marketing costs. They already have a lot to offer in terms of quantity, variety, quality, and price. So, there is no need for them to spend much money on advertising to sell their product because getting the most attention when they are able to deliver what they promise and at a better cost than competitors. There is also an abundance of sellers and buyers. This means that there is a ready market for the products both locally and overseas.
  The laws also limit the amount that anyone can spend on advertising and marketing. In other words, they make sure that no one gets rich by convincing people to spend more money on Chinese products than they need to.
  Outsourcing China Products from Suppliers on DHgate.com
  Outsourcing China goods from suppliers on DHgate.com is a very simple and worthwhile thing to do. DHgate.com has already been acknowledged as a leading e-commerce platform in the world. They are continuously improving their service to make it better and better so that more people could benefit from their service.
  What you get is an opportunity to find an ideal China supplier with whom to work and have a great time. It is not uncommon for people to have no idea about how to make their first purchase from China. However, there are some things you should know before you buy china products from suppliers on DHgate.com:

  • Outsourcing China goods from suppliers on DHgate.com is an easy way to find the best deal for your money. When it comes to shopping for china products, only really good deals are worth your time and effort.

  • On DHgate.com, shoppers can choose from a wide selection of outsourcing china products from suppliers and get them at unbeatable prices. For example, if you want to buy cheap items from China, you will find them here at wholesale price. So it's a great bargain that you just cannot miss.

  • Tons of china product suppliers are waiting for your join on our platform, you don't need to worry about the quality problem anymore.

• Frequently Asked Questions
  Why are Chinese products so cheap?
  The root cause is the combination of China's large population and its low costs for labour and resources. The government also subsidizes businesses that export goods.
  Why does Labor Cost Less in China than in America?
  The cost of labour in China is relatively lower than in America and many other European countries because it is cheaper to live in China.
  Are Chinese Products really of Good Quality?
  Yes, China products meet the set quality standards. The government has been promoting the manufacturing industry for decades, and now most of the Chinese brands can be as good as other brands in the world. For example, Qiaobi (淇奥) washing powder is one of the best-selling laundry detergents in the world.
  Many famous foreign brands buy their raw materials from Chinese manufacturers, like iPhone which assembles its phones in Shenzhen and Xi'an. So you can't say that products from this country are not of good quality.
  Why is China able to Produce Products so Cheaply?
  China's competitive advantage is rooted in its abundance of cheap labour, as well as its disregard for many traditional business expenses such as R&D and product design.
  Conclusion
  The points discussed above best answer the most commonly asked question – why are China products cheap? China is the world's factory. It manufactures and exports everything from electronics to clothing. Any good cheaper than you can imagine comes from this country. Visit DHgate.com for any kind of China cheaper products you might be looking to outsource from China.