Why is it that products(foreign investors) made in China r still expensive despite the reality of low cost labor?
Are the investors taking huge profits from that?
Answers:
The price of any product depends on several factors
* Cost of rare materials to generate the product. Even within the USA, materials can cost more than the labor component of the products.
* Cost of labor to combine the organic materials into the product. Here products made in China, and exported to USA enjoy lower labor costs.
* Cost of transportation ... complex if made contained by China sold in USA or Europe ... the closer the product can be made to where on earth it is to be sold, the smaller number cost of transporting it to market
* Cross border expenses close to customs and anti-terrorism inspections holding it up in transit
* Cost of overhead. That's approaching electricity, building, taxes ... also cheaper in China, but insurance on transit can be higher
* Cost of funds ... guess of it this channel ... you draw from the untouched materials & enjoy to rate for them, usually in a month or so ... the product is made which might give somebody a lift a week or so, sent to open market which might pinch several months by slow boat, sold, consequently you bring remunerated possibly 3 months subsequently ... this channel your money is tied up within products within the slow boat pipeline, and someway you are paying interest on that money
* Cost of competition ...some company in USA have bright perception of entering into a treaty near some company within China, or India, or Mexico or everywhere, to brand their products for them, to retrieve on labor costs ... what's to prevent the company within the other country to amount out how to be in motion into competition next to the unproved US firm & steal adjectives their business ... remember the law are different within the other nation ... you can't enforce sophisticated contracts within an unsophisticated country
Greed.
Because the price is set by the marketplace, not the overhead. And investors hold a huge profit on that.
Suppose your neighbor works contained by a shoe factory and make 17 bucks an hour and have form insurance. Three years ago his cute little daughter caught meningitis and nearly died, but through the pains of a well-stocked modern hospital she's fine and will grow up to live a relieved duration. Their shoes go for $29.95 and Buster's shoestore downtown, who give your son a proletarian work concluding summer, make $2.00 a duo. The two of a kind you bought 3 years ago is starting to wear out.
Wal-Mart sell shoes from China. The Chinese workers live in tents and occupying force and produce 17 cents an hour. If their kid get sick from pinkeye and they progress home to see the kid one concluding time beforehand she dies the factory regulator fires them. Wal-Mart sell those shoes for $28.95 a couple and make $28.30 a duet, which they distribute to their dune surrounded by Arkansas.
As a cheap, dumb American consumer, you're going to liberate a buck and buy the shoes at Wal-Mart. Six months subsequent when they wear out you'll buy another two of a kind at Wal-Mart because hey, it's cheaper.
Buster's shoe store closes and feeble Buster retires to Florida, and his store get boarded up. Your neighbor get out of work when the shoe factory closes, he moves away looking for a position and his house get rented out to society who play the stereo indisputable loud at darkness, throw trash surrounded by your patio and block your driveway near adjectives those cars they hold.
Your son lays around the house this summer and get bored so he starts using dope he's probably getting from those untried neighbors.
As you're taking a bearing surrounded by your Wal-Mart shoes long-gone the outdated Buster's store, a huge rat runs out between the boards and you start to run, and you break your toe because this set of two is worn out and you move about to the emergency room and it's three hours earlier you see a hospital member of staff because of adjectives the gunshot cases and overdosed hopheads within within, and the subsequent daytime you stir fund to Wal-Mart and spend another $28.95 on the third two of a kind of shoes within 12 months. Hey, it's a dollar cheaper.
So here you are, spending $180.00 in the time you used to spend $30.00 to keep hold of your foot dry, getting chased by rats to a house where on earth your son is lay around smoking crack, you can't sleep at dark for the boom, your local police are too short-handed to drive through your neighborhood, a Chinese girl is deceased, a bunch of citizens surrounded by Arkansas are getting rich on money that used to stay your town and Rush Limbaugh is describing you this unease you are attitude is because Hilary might become President.
And you believe him because you're a cheap, dumb American consumer good a buck every time you buy shoes at Wal-Mart.
Have a nice sunshine.
The investors made a huge profit.
They of late share a fracrion of their labor cost down profit beside expire customers. they contrl the public sale bazaar.
They will not lower down their big prices unless other competitors lower down prices.
Medlar
Professional Sourcing Manager
www.chinasourcingagent.com.cn
i construe they are making huge profits. and i reason their pricing is certainly intransigent to what US made stuff cost. they of late price them lower than what US products are offered...
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Answers:
The price of any product depends on several factors
* Cost of rare materials to generate the product. Even within the USA, materials can cost more than the labor component of the products.
* Cost of labor to combine the organic materials into the product. Here products made in China, and exported to USA enjoy lower labor costs.
* Cost of transportation ... complex if made contained by China sold in USA or Europe ... the closer the product can be made to where on earth it is to be sold, the smaller number cost of transporting it to market
* Cross border expenses close to customs and anti-terrorism inspections holding it up in transit
* Cost of overhead. That's approaching electricity, building, taxes ... also cheaper in China, but insurance on transit can be higher
* Cost of funds ... guess of it this channel ... you draw from the untouched materials & enjoy to rate for them, usually in a month or so ... the product is made which might give somebody a lift a week or so, sent to open market which might pinch several months by slow boat, sold, consequently you bring remunerated possibly 3 months subsequently ... this channel your money is tied up within products within the slow boat pipeline, and someway you are paying interest on that money
* Cost of competition ...some company in USA have bright perception of entering into a treaty near some company within China, or India, or Mexico or everywhere, to brand their products for them, to retrieve on labor costs ... what's to prevent the company within the other country to amount out how to be in motion into competition next to the unproved US firm & steal adjectives their business ... remember the law are different within the other nation ... you can't enforce sophisticated contracts within an unsophisticated country
Greed.
Because the price is set by the marketplace, not the overhead. And investors hold a huge profit on that.
Suppose your neighbor works contained by a shoe factory and make 17 bucks an hour and have form insurance. Three years ago his cute little daughter caught meningitis and nearly died, but through the pains of a well-stocked modern hospital she's fine and will grow up to live a relieved duration. Their shoes go for $29.95 and Buster's shoestore downtown, who give your son a proletarian work concluding summer, make $2.00 a duo. The two of a kind you bought 3 years ago is starting to wear out.
Wal-Mart sell shoes from China. The Chinese workers live in tents and occupying force and produce 17 cents an hour. If their kid get sick from pinkeye and they progress home to see the kid one concluding time beforehand she dies the factory regulator fires them. Wal-Mart sell those shoes for $28.95 a couple and make $28.30 a duet, which they distribute to their dune surrounded by Arkansas.
As a cheap, dumb American consumer, you're going to liberate a buck and buy the shoes at Wal-Mart. Six months subsequent when they wear out you'll buy another two of a kind at Wal-Mart because hey, it's cheaper.
Buster's shoe store closes and feeble Buster retires to Florida, and his store get boarded up. Your neighbor get out of work when the shoe factory closes, he moves away looking for a position and his house get rented out to society who play the stereo indisputable loud at darkness, throw trash surrounded by your patio and block your driveway near adjectives those cars they hold.
Your son lays around the house this summer and get bored so he starts using dope he's probably getting from those untried neighbors.
As you're taking a bearing surrounded by your Wal-Mart shoes long-gone the outdated Buster's store, a huge rat runs out between the boards and you start to run, and you break your toe because this set of two is worn out and you move about to the emergency room and it's three hours earlier you see a hospital member of staff because of adjectives the gunshot cases and overdosed hopheads within within, and the subsequent daytime you stir fund to Wal-Mart and spend another $28.95 on the third two of a kind of shoes within 12 months. Hey, it's a dollar cheaper.
So here you are, spending $180.00 in the time you used to spend $30.00 to keep hold of your foot dry, getting chased by rats to a house where on earth your son is lay around smoking crack, you can't sleep at dark for the boom, your local police are too short-handed to drive through your neighborhood, a Chinese girl is deceased, a bunch of citizens surrounded by Arkansas are getting rich on money that used to stay your town and Rush Limbaugh is describing you this unease you are attitude is because Hilary might become President.
And you believe him because you're a cheap, dumb American consumer good a buck every time you buy shoes at Wal-Mart.
Have a nice sunshine.
The investors made a huge profit.
They of late share a fracrion of their labor cost down profit beside expire customers. they contrl the public sale bazaar.
They will not lower down their big prices unless other competitors lower down prices.
Medlar
Professional Sourcing Manager
www.chinasourcingagent.com.cn
i construe they are making huge profits. and i reason their pricing is certainly intransigent to what US made stuff cost. they of late price them lower than what US products are offered...