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To: Gritty

I hope things are moving. I bought something on Amazon and it is coming from China. Must be a slow boat!


35 posted on 01/11/2016 12:46:19 PM PST by Jim from C-Town (The government is rarely benevolent, often malevolent and never benign!)
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To: Jim from C-Town

Most of those items are actually flown in.

My business buys from China a couple of times a year. If it is less than 10 pounds they pretty much always fly it in. If it is larger, it comes by boat about half of the time.

Here is how it goes - if I have a customer that wants 200 caps I have to decide whether to produce them in house or have them produced in China.

If I have to produce them in house the least expensive blank cap I can purchase is $1.25 each. A typical 8,000 stitch logo takes 10 minutes to produce. I could run them on all three machines and produce 18 an hour. With labor running $12 an hour (with matching taxes) there is $.6667 labor per cap with about $.25 worth of thread and backing per cap - my total cost $2.17 per cap and I charge about $4.00 each.

I can have them produced in China (same quality cap) for $1.30 each. Where they used to take 4 to 6 weeks to produce and deliver, they are now down to 2 to 4 weeks, which is pretty close to my production time. If I want to make the same total profit on the deal, I can sell the China caps for $3.13 each.

Note on the China deal that I have virtually zero labor cost. I can make just as much money having things produced in China with much less overhead cost to my businesses.

For now we are still producing +90% in house, but if the government keeps making employees more and more expensive, I will be shifting to overseas production. If I don’t my competition will and will put me out of business.


38 posted on 01/11/2016 1:22:47 PM PST by Crusher138 ("Then conquer we must, for our cause it is just")
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