Subcontract Manufacturing in China: Benefits and Organizational Cons for Business
Business with China means high profits and profitable cooperation. We have collected tips on how to start a home business, start a business without investment, and what guidelines should be followed.
Literally ten years ago, goods from China were not of high quality. They were produced from second-rate raw materials and outdated technologies, so such products were not in great demand. Much has changed today, so you can easily purchase quality products at affordable prices on Chinese trading floors. In this article, we will tell you how to start a business in China and how to make good money from it.
A few years ago, goods from China were associated with cheap, low-quality products. Today, more and more entrepreneurs are thinking about cooperation with China, and the Internet is replete with questions like “how to start a business with China” and “what is needed for cooperation with China”. Business with China is promising, shows constant growth and strives for Russia itself. Why not take advantage of this?
Let's start our answer with the main question about how much money is needed to start a business with China. You can start a business with China with. zero balance. Seriously! You can start a Chinese goods business with no investment. The main thing is to have with you step-by-step instructions for starting your own business with China selling physical goods. It is she who is the key to success.
Anyone who has a computer, Internet access, and a desire to study all the nuances of this business and start earning can be engaged in the business of selling Chinese goods. Newcomers, small entrepreneurs, and successful businessmen seeking to expand their business will find interesting business ideas with China.
Dropshipping How to start a dropshipping business with China
It is quite possible to open a business with China without investments. The name of such a business is "dropshipping". From English this word is translated as "direct delivery". The idea of business is that the entrepreneur acts as an intermediary between the buyer and the seller. The scheme is simple: the entrepreneur orders the necessary goods on his own behalf, and sends the goods to the buyer's address. Thus, an entrepreneur can work without leaving home and without spending their money, working on a prepaid basis. All that an entrepreneur undertakes is organizational issues. He will need to register on the site, if necessary, communicate with the seller, track the delivery of goods, etc.
What business is worth starting in a crisis?
Minimum investment. Fast payback. High demand. Does not require premises and staff. 2 days to launch. Choosing an openbusiness portal. u.
The advantages of dropshipping are many: an entrepreneur does not risk his own funds, does not need to hire employees and can cope with the volume of work alone. In addition, to work effectively, he only needs a computer and the Internet.
The main disadvantage of this business model lies in external factors: first, parcels from China take a long time to arrive; secondly, there is a risk of loss or delay at customs. Not every customer agrees to wait that long. It should also be borne in mind that the scheme is old and proven, that is, there is a high risk of facing competition. Despite this, dropshipping remains a fairly lucrative business, and the product margin ranges from 10% to 100%.
What do you need to start a dropshipping business with China?
Find suppliers. There are thousands of them on the Internet, but choosing suppliers is not so easy. Among all the variety, you still need to find the most reliable and suitable goods in terms of quality and price, delivery conditions, assortment, etc. Most often, large online stores are chosen as suppliers, which have a huge assortment and sell it at wholesale prices. Now you can find online stores that are created specifically for dropshipping (Banggood.om, TinyDeal.om, DX.om, Tmart.om, BuySKU.om, LightInTheBox.om and others). Making money with such sites is even easier, because they often provide partners with various bonuses. The choice of a supplier should be approached responsibly, because you are responsible for the quality of the product and its delivery to the customers.
Small business machine is used to develop their own business. Not everyone can afford large investments in business development. Consequently, a novice entrepreneur calculates the cost of rent, equipment, salaries for hired employees. The experience of Chinese businessmen shows that starting a business can be done in a garage. You can buy machines in China. And then set up production.
Small business machine tool in China: overview of popular models
Small businesses in China are growing at an enviable pace. What Chinese entrepreneurs successfully use at home can also be used by entrepreneurs from other countries. For the development of their own business, the release of popular or original products, specialized machines are needed.
And our eastern neighbor has them. But, before purchasing the equipment, it is better to familiarize yourself with the principle of its operation. Also, examine the factors that affect its value.
Small business machine: bending machines
Equipment is needed to shape metal sheets. With the help of a listogib, you can cut sheets and bend metal in different directions. Finished products: metal profiles, boxes, boxes, corrugated board, metal siding, snow holders, platbands, gutters. Metal products are very popular because of their strength, durability, and lightness.
Help from ichinese8. u:
Plate bending machine 折 方 机 、 折弯 机 Sheet metal 金属 板 Metal profile 金属 型材 Decking 彩钢 瓦 Metal siding 金属 壁板 Snow holder 防 雪 栅栏 Platband 锁孔 板 、 方 框架 Drain 排水沟
Multifunctional machine. It is possible to purchase a manual mechanical listogib and an automatic machine. The cost of the machine is low - from 30 thousand rubles, thanks to the increased demand for products, the investment pays off quickly.
Bending one metal workpiece costs at least 100 rubles. It takes about 1 hour to make a part. Taking into account that the customer pays for material and work, the machine will pay off in 1.5 months. When equipping a sheet bending machine with a roller mechanism, it becomes possible to produce drainage elements and receive additional profit.
Business growth in China has very high prospects and shows stable growth. Such success applies not only to traditional areas, but also to the most unusual ones.
Below are the best business ideas from China that are not yet available in Russia.
Top Chinese business ideas that can be implemented in Russia
For several years in a row, Russian businessmen have taken ideas from China. The easiest way to remember is that most of the goods in Russia are made in China. In addition to the fact that on their sites you can buy goods of any group for a pittance, here you can also order their production. People who dream of building their own business can study business ideas in detail and successfully transfer them to Russia.
- 3D printing China is very active in using 3D printers, making toys, souvenirs and design items on them, including smartphone cases and jewelry. The advantage of a 3D printer is the fast and high-quality execution of any order, and for this you do not need to rent a large room.
- Esports This kind of entertainment as esports gives Asians a special feeling. Experts unanimously argue that this sport is in the future. More and more young people, instead of traditional winter sports, prefer to spend time in front of the monitor, and every year the number of those who wish only increases. China, being the most innovative country in the world, has long built a business on esports. Competitions are increasingly organized and promoted through advertising campaigns. Potential sponsors and professional players are very important here. If we talk about a business idea, an eSports cafe for amateurs will be very successful. To the usual investments for opening, you will have to add money to buy high-quality monitors. To open such an establishment, you need to have about $ 10.00, but the success will directly depend on the marketing campaign. Organizing and sponsoring competitions also requires a lot of investment.
- A drone that collects debris in the water Several students studying at the Northwestern Technical University have designed a drone that is capable of collecting floating debris. You can control it with the remote control or using the application installed on your smartphone. Such cleaning equipment is equipped with hands of 2.5 meters, it is they who put the collected garbage in their compartment. Important! One such drone is capable of collecting 25kg of garbage for 8 hours. After scaling up production, the equipment will work on rivers and lakes in many cities. A variant of such an idea from China will help improve the environmental situation in any country, which is now more relevant than ever.
- Street relax boxing On the streets of Chengdu, boxes began to be installed in which you can relax for a fee. The initiator is Rest or Meet company. The room is a small box, 5 sq. m and accommodates a maximum of 3 people. Here you can lie on the couch or work at a small table. The box is equipped with WiFi, TV, game console.
This box is different from the already known capsule hotels and it does not work around the clock, but only until 23 pm. The business plan is mainly aimed at people who spend enough time in coffee shops, working or studying in parallel.
Important! First of all, such boxes were installed in several shopping centers, the assembly of one of them takes 4 hours and is easy to assemble. In the near future, such a business may become successful not only in China, but it will require certain costs.
- Clinic booth Ping A Good Doctor from Shanghai decided to create a complex of clinics in which there is not a single medical worker. Outwardly, it is a small booth, once in which a patient can get a consultation from a virtual doctor named Ai Doctor. Such a doctor is able to perform analysis thanks to artificial intelligence. After collecting an anamnesis, the therapist can provide answers regarding 2021 known diseases. Such a bot allows you to purchase medicines from 100 categories. If a prescription drug is not available, the online doctor uses the founder's app and arranges delivery.
3D printing can overshadow small batch production over time. For work, polymer resin, ceramic powder, metal clay and plastic threads are taken. Such equipment can make a copy of some car parts that do not take on a serious load, if we talk about the bathroom, it can be faucets and even some work tools.
Important! 3D printing is able to solve urgent problems for customers, thanks to it, with minimal costs, you can print a huge amount of goods or create it on an individual sample. This method is notable for its low cost. Having, for example, a drawing of any part, it can be printed faster and cheaper than ordering online with delivery. If we talk about the disadvantages, such a business idea requires considerable investment, which involves the purchase of a printer and consumables.
New ideas for business in Russia
In addition to the listed 5 options for interesting Chinese developments, there are still new ideas for business that can be implemented in the Russian market.
Online cosmetics store
MAC Cosmetics has opened a store in Shanghai that is amazing. Upon entering such a room, the visitor scans the phone and, after registering in a special program, receives a personal greeting. Thanks to the virtual mirror, in a few seconds you can choose the perfect lipstick, shadow, which is obtained thanks to the work of the infrared sensor.
China is one of the leading suppliers of high-tech and innovative equipment. When buying goods in the Middle Kingdom, there is no doubt about the excellent quality and long-term operation of both the entire technological line and each part separately.
What equipment is in high demand?
There are equipment with different technological characteristics on the Chinese market. Thanks to this, it is possible to open your own production in almost all types of activities. The main obstacle to becoming an aspiring entrepreneur is the lack of funding. Buying equipment for small businesses from China in order to open a unique enterprise with low investment and high profitability is much easier than it might seem. Initially, one should "choose the type of activity, study the features and characteristics of the machines, the energy they consume." Marketing research has identified several top types of equipment:
- packaging installations and mechanisms;
- devices for the production of food products;
- technological lines for brewing;
- equipment for the production of materials for the construction industry;
- machines for the manufacture of plastic items.
Top machine tools from China for garage business
For the development of most types of business, large investments are required, as well as large areas for its placement. There are many home appliances from China that take up very little space. Before ordering the equipment, "conduct a marketing research of the local sales market." The main point is identifying competitors and analyzing possible options for selling products.
The most popular types of equipment
- Machines for the production of household sponges, washcloths, brushes (from 14 thousand dollars). The raw material is stainless steel or plastic. The result is a very popular product type.
- Mechanisms for washing and cleaning carpets (from 3 thousand dollars). The room used must have sewerage, water supply, heating. One employee can fulfill from 20 orders per day.
- Installations for the production of vermicelli (from 20 thousand dollars). It is the undisputed leader in sales in the product segment. The payback period is 2-3 months. 10 thousand packs can be produced per day.
- Machines for creating 3D tiles. The selected picture is applied to a glass base using a printer, and then placed on a ceramic tile. The gap between them is filled with a composite solution, and then sent to an oven for molding. Next, the tiles are ground and prepared for shipment.
Subcontracting (subcontracting) is a phenomenon that was once available only to large business, today it can be mastered by most representatives of small business.
Subcontracting is a private form of manufacturing outsourcing used by a business to optimize internal processes. The basic scheme of this form of interaction is that a contractor or customer places an order with a third-party enterprise (subcontractor, performer) for the development or release of a batch of certain products that meet the requirements of the contractor. Compliance with technological processes, the search and use of suitable resources, and other organizational issues are entirely the responsibility of the contractor. The contactor is only concerned with evaluating the quality of the final product.
Using the subcontracting mechanism allows the customer to get rid of many costs. For example, working in this form, the contractor may not have its own production facilities at all. Therefore, he does not incur additional costs for their maintenance (especially if it is not possible to fully load them). And subcontractors, on the contrary, by recruiting third-party orders, reach a high level of utilization of their own production capacities.
This approach, in most cases, optimizes business processes in a pair - "contractor-subcontractor": full workload of the contractor's production allows you to keep the minimum cost of manufactured products, and therefore the final cost for the customer. This, in turn, increases the competitiveness of the product, since the consignment is quite cheap for the contactor.
For example, an entrepreneur, one of the readers of hobiz. u, having decided to test a new niche for itself, plans to release and sell exercise bikes of its own unique design. Previously, he would have had to organize a separate enterprise. That is - to find premises, purchase equipment, hire qualified personnel. What would be reflected in the initial investment.
Today, with an abundance of business objects specializing in subcontracting, our reader only needs to prepare technical documentation and place an order at a suitable enterprise. All initial investments - development of documentation, payment for a wholesale batch and logistics of finished goods from the manufacturer to the customer.
Of course, the cost of production will be higher compared to the cost of manufacturing in your own factory. But this difference in price will become significant only at a very high turnover and low cost (but then, using the profit, the entrepreneur will be able to build his plant, “painlessly” for the budget).
There is no doubt that bicycles are a very subjective and particular example. The device is quite complex; competition is generally high; demand is far from stable; and the cost of production is quite high. There are other common niches that do not have similar disadvantages. For example, the production of clothing. Even with an abundance of competition, the demand is stable and capacious, capable of accepting a new proposal. That is, almost any entrepreneur can order subcontract tailoring of a batch of clothes and be sure that they will make good money on this. One question remains - where to find such an enterprise capable of subcontract sewing? Hobiz. u know the answer - in China! By the way, the schematic diagram of contract tailoring described below can be easily scaled to any other niche with a minimum of changes.
The subcontract has become a "golden business idea" for Chinese entrepreneurs. They, not a secret, "got their hands on" unauthorized copying of products, moving away from this, today they are ready to produce under a contract any profile products available to their production level. And most business representatives from other countries are happy to use this offer.
It is enough to look around, walk through large retail chains, look at the market. View the offered product, pay attention to the little things. Hundreds of brands, thousands of goods - from smartphones and technology to clothing and other small things - everything is usually made in China, and most likely at contract enterprises. However, only clothes and shoes have a number of undeniable advantages over the rest of the product, which is why hobiz is in this business idea. u focuses on her.
Clothing, as noted above, refers to a commodity in high demand, essential products. And some items of clothing, without a stretch, can be considered a high-margin product - that is, one whose retail price is an order of magnitude higher than the production cost. For example, the newly fashionable belt bags. They sell like hotcakes at quite high prices, but market demand is not satisfied! And the usual items of clothing are in demand. Firstly, the seasonality of the seasons obliges a person to have at least a change of 3-4 sets of clothes and shoes. And what about children's clothes? Children grow, the size changes, the child, at one point, simply does not fit into old clothes. You need to buy a new one, albeit inexpensive. Secondly, natural wear and tear leads to a constant renewal of the wardrobe. Thirdly, if the consumer also follows fashion ... though, about hobiz belt bags. u already wrote.
In addition, significant fluctuations in world currencies caused an increase in the cost of clothing from European and American brands. And the general decline in purchasing power makes buyers pay attention to less famous brands, however, ignoring frankly "Chinese consumer goods" - the colloquial name for any product of extremely low quality. And here a point of sale arises, at which a Russian (and any other) entrepreneur with his own inexpensive but high-quality clothing brand can “shoot”. And therefore - to earn. Again, back to the idea that it would be nice to develop your own brand, sew goods and sell-sell-sell (wholesale or retail, no difference). This is done either in our own factory, or a contractor is being sought. Usually located in China, where raw materials and production costs are cheaper.