Cost of manufacturing in China

[Mark42]

Earlier this year I ordered from Harbor Freight, and there was a $0.99 pocket knife offer. I ordered expecting a cheap pocket knife. When it came, I was surprised because they were much nicer than expected. At only 3" long, it has blade, phillips screw driver, nail file, cork screw, bottle and can opers and scissors.

A nice little stainless steel knife, I used it a lot and got in the habit of carrying it where ever I went.

Two weeks ago I lost it and after a few days decided to order a new one. HF does not carry them, but I did find it on ebay for $4.99 and $1.99 shipping. So I bought one.

Later while searching for pocket knives, I came across a Chinese import service and found the pocket knife listed. The price is $0.34 a piece for order of 1000. No wonder HF was giving them away at 99 cents! It only cost them 34 cents! And at $4.99, the ebay seller is making $4.65 each. Not bad.

Nowhere in the USA could this little stainless steel pocket knife be manufactured for 34 cents. Its absolutely amazing how inexpensive products from China are.

Hey, maybe I'll order a 1000 with the iboats logo on them and sell to the members!

 

[BLU LUNCH]

Re: Cost of manufacturing in China

How can they make and that for .34 and make a profit?
Are they producing them for .15-.20 each?

 

[flycaster]

Re: Cost of manufacturing in China

How can they make and that for .34 and make a profit?
Are they producing them for .15-.20 each?

The Chinese government subsidizes them. That is how it works over there.

 

[angus63]

Re: Cost of manufacturing in China

I spent about 20 yrs in aerospace/military component design/manufacture. A rule of thumb was to move the decimal point one place to the right to determine the difference in cost for US made products vs. foreign. A 34 cent knife would cost 3 dollars and forty cents to make in the US. Tough to compete globally. Tough to keep costs down when your program needs to be all US made products. Just plain tough....

 

[642mx]

Re: Cost of manufacturing in China

And at $4.99, the ebay seller is making $4.65 each. Not bad.

He's not making as much as you think... After eBay listing fee's, selling fee's, and Paypal fee's... the seller will be lucky to make $2. Don't forget about the gas running to the Post Office too.

 

[Bigprairie1]

Re: Cost of manufacturing in China

Yeah, cheap wages, few if any restrictions on manufacturing or manufacturing facilities (ie: health, safety, minimum wage, etc). Hard to compete with that...especially when the end product is so enticing cost wise and right there in front of you.
Their quality is getting better, similar to the way the Japanese quality got better since the 50's/60's. However, with all of that rising...their wages will have to rise as people start to become more self-sufficient and affluent. Again, sort of like what happened with Japan.
We just have to hang in there long enough until their cost of living comes up enough to compete with ours.
Still....good deal on that Mark!!
BP

 

[642mx]

Re: Cost of manufacturing in China

Yeah, cheap wages, few if any restrictions on manufacturing or manufacturing facilities (ie: health, safety, minimum wage, etc). Hard to compete with that...especially when the end product is so enticing cost wise and right there in front of you.
Their quality is getting better, similar to the way the Japanese quality got better since the 50's/60's. However, with all of that rising...their wages will have to rise as people start to become more self-sufficient and affluent. Again, sort of like what happened with Japan.
We just have to hang in there long enough until their cost of living comes up enough to compete with ours.
Still....good deal on that Mark!!
BP

Good point BP. This is kind of like what happened with dirtbikes....

Years ago my Dad said everyone rode Maico's, Bultaco's, and Husky's. The Japanese came over here with their Honda's and Yamaha's and everyone laughed at the quality! Now we all ride Yamaha's and Honda's because the quality surpassed the Maico's and such..... and we laugh at the Chinese made dirtbikes that keep showing up in the States... I guess by the time I have kids and they start riding, they will be on Chinese made bikes.

 

[avenger79]

Re: Cost of manufacturing in China

yeah I used to order items from a chinese manuf. they would retool machines for $10 and have it done in a day. Of course still had to wait for parts to arrive to quality check them.
try getting an American shop to retool for $10 and in one day. I sent as much work as we could afford to Amer shops but when bottom line was important it all went to China.

 

[rbh]

Re: Cost of manufacturing in China

replaced the drain tap on the preasure tank in the well house, turned the plastic handle once and it stripped the holding threads.
we used to make fun of products from taiwan, lets add someone else to the list for the next ten or so years.
Their currency has been undervalued on the world stage, if anything bring that in line with what its really worth, and some jobs would come back.

 

[Capt'n Chris]

Re: Cost of manufacturing in China

We contracted the injection mold tools for our SternMate? transducer mounting system in China last winter. When completed, they were, of course, shipped to us here in Texas for manufacture. Goods would be less expensive to manufacture there, but we can keep a quality control eye on our products manufactured here. Everything about the quality of our tools is 1st class. They take great pride in workmanship, use the highest quality materials and they are highly skilled. Injection mold tools are quite expensive regardless of where they are machined, but we found it to be much more cost effective to have them built there. It is apparent that the cost gaps are closing in quickly and we will loose that luxury.

 

[Mark42]

Re: Cost of manufacturing in China

If the knife was made with a nicer handle, and made in the USA, I would pay $10-$15 for one. But even at those prices, you can't find a nice simple 3" pocket knife made in the USA.

Import tariffs have their place. Maybe the USA should start jacking up the import tarrif on select categories to give the small American manufacturer an opportunity to rebound.

Maybe given the incentive, an American company would be able to produce a nice stainless steel pocket knife for $15.

 

[puddleboater]

Re: Cost of manufacturing in China

As you all know, Chinese products are so cheap and ubiquitous that it's now impossible not to buy them. Be that as it may, I went to Walmart (aka ChinaMart) a few times the last couple of months and was pleasantly surprised to find and buy some American made (at least it showed "Made in USA") products. They were simple and inexpensive products(fuel line/primer bulb for my boat; laundry hamper; Weber smokey Joe).

Ok, the smokey Joe was ten dollars more than the equivalent ChiCom version, but whoever said serving in the military was the only way of being patriotic!

 

[DavidW2009]

Re: Cost of manufacturing in China

The Chinese government subsidizes them. That is how it works over there.

It is my understanding, all manufacturing in China is accountable to the Chinese Army. (Try to start a labor union and demand higher wages under those circumstances)

When one buys Chinese, one supports the Red Army directly.

BTW, quality control is slipping in China.

 

[ziggy]

Re: Cost of manufacturing in China

i go out of my way to not buy chineeze stuff, if i can. it's hard to avoid unfortunately...

If the knife was made with a nicer handle, and made in the USA, I would pay $10-$15 for one. But even at those prices, you can't find a nice simple 3" pocket knife made in the USA.

nope, not at them prices. i carry a buck 309. http://www.bestknives.com/buc309com.html
little more than $15 unfortunately... but it does say USA on it... in this day and age, that i will pay for... the USA stamp that is... i'm also poor as a church mouse. but man, the job i'm trying to save may be my own....

the playing field is lopsided.... and were all gonna pay up if we don't get hip to buy American...

another thing. for us old boat owners. bet our boats were all American made. i'm sure mine is. alpharetta, ga. atlanta boat works. a real all American company. all parts if stamped say made in USA so far... that makes me feel proud....

 

[mscher]

Re: Cost of manufacturing in China

i go out of my way to not buy chineeze stuff, if i can. it's hard to avoid unfortunately...

nope, not at them prices. i carry a buck 309. http://www.bestknives.com/buc309com.html
little more than $15 unfortunately... but it does say USA on it... in this day and age, that i will pay for... the USA stamp that is... i'm also poor as a church mouse. but man, the job i'm trying to save may be my own....

the playing field is lopsided.... and were all gonna pay up if we don't get hip to buy American...

another thing. for us old boat owners. bet our boats were all American made. i'm sure mine is. alpharetta, ga. atlanta boat works. a real all American company. all parts if stamped say made in USA so far... that makes me feel proud....

Some buck knife models are made in China. Buyers have to looks at the package to be sure to get a U.S. made model.

Just purchased this American beauty, $49 at Cabelas. Included a free lifetime factory re-sharpening service.

http://www.buckknives.com/index.cfm?event=product.detail&productID=2896

 

[mscher]

Re: Cost of manufacturing in China

I have started shopping at this farm store.

http://www.orschelnfarmhome.com/

They stock a LOT of USA made items.

The prices are higher, but the quality is higher also.

 

[mscher]

Re: Cost of manufacturing in China

The Chinese government props up their manufacturing segment, similar to how our's propped up our real estate market?

Hmmmmm.

Maybe those factories will be coming back someday soon.

 

[puddleboater]

Re: Cost of manufacturing in China

I built my own PC last year, out of parts I ordered via the internet or bought in store. I was amazed at the lack of electronic equipment that is no longer made in the U.S.

The Intel Core 2 Duo processor was made in Costa Rica; the motherboard was made in Taiwan; the DVD drive from S. Korea; the hard disk drive from Malaysia; power supply, from China. Out of all the parts I bought, I managed to find one (DDR2 system memory) that was made in the U.S.A (Patriot memory, of all things). The U.S. made memory was $5 more than the equivalent foreign made memory, but then I figured I was already paying over $400 for all of this stuff; what's another $5 to support an American company???.

Sometime during the spring, I plan on buying some additional equipment for my boat. These would include VHF two-way radio and antenna, GPS, fishfinder, and compass. Since Humminbird still makes or assembles fishfinders in the U.S., they'll get my business. Ritchie Compasses are still made in the U.S.A., so I plan on getting one of their models even though Walmart sells some cheapo ($10) compasses made in where else?.........China!
The Ritchie model I'm looking at is $39, but heck, the quality is far superior to the one at Wally Mart.

I don't mind buying foreign made goods, whether it's from South America, India or Asia, but the Chinese ones are the most likely that I'll avoid.On a daily basis, there's a reminder in the news that China will be our strategic competitor. I just believe that if we keep buying their goods, this will become a self-fulfilling prophecy.

Just my .02.

 

[JustJason]

Re: Cost of manufacturing in China

I just believe that if we keep buying their goods, this will become a self-fulfilling prophecy.

+1 to that.

This doesn't take a phd to figure out. But a single dollar isn't worth a whole lot because everybody has one. A million dollar bills is worth more because not everybody has a million. And this is why every society has classes of people.

Thoughout the history of civilization those with slaves/cheap labor have always prospered. Its sad, but its a fact of life. From the egyptians to even our forefathers, those with slaves/cheap labor have always been in the upper class.

Now if you equate this to global markets/economies. The answer is so simple its dumb, but it gets so politicized it gets lost in the clouds.
Simply put not everybody can have a good economy. Its impossible. If every country on the planet had a good economy then an economy as a whole would be worthless. Just like classes of people, there are classes of economies. Good economies are built on the backs of weaker economies.
Cheap labor is in china right now. It used to be in mexico, and taiwaan, and Korea etc, but the cheapest is in China. (for a multitude of reasons). So jobs (and money) go to the cheapest workers.
When jobs and workers leaves 1 economy and go to a different economy then the balance shifts, 1 becomes weaker (US), and 1 becomes stronger (China).
Whenever I talk about this to people I always ask them to ask themselves this question...
Where will the world be when there is no cheap labor left anyplace on the planet left to exploit??
It may not be today or tomorrow, but eventually there will be none left.
If there is no cheap labor then there is nobody will be willing to work for a dollar. If everybody is demanding, and making, X amount of dollars, then that X amount becomes worthless, because there is no (or less) class difference.

I hate to say it but there isn't another way, If the US economy wants to improve, another countrys economy has to suffer. Thats the way it is. Its just unfortunate for us all here now that it is the US economy that is on the suffering end.

 

[DECK SWABBER 58]

Re: Cost of manufacturing in China

+1 to that.


I hate to say it but there isn't another way, If the US economy wants to improve, another countrys economy has to suffer. Thats the way it is. Its just unfortunate for us all here now that it is the US economy that is on the suffering end.

Has China's economy really improved for the average citizen? How is that country benefiting from the obscene profits made by US corporations there?
Seems to me all the $$ is going into the pockets of upper management.
If chinese workers were paid a decent wage their standard of living would improve enabling them to buy goods manufactured here, and we could still buy theirs.

What I find sad is that we have allowed our government to send pretty much our entire manufacturing base somewhere else, yet we have millions of able bodied people on unemployment, welfare and food stamps.