Anyone having concerns about sourcing vape carts/disposables from China? Our POC at our manufacturer is quarantined in her home town right now, along with many other workers from their factory.
Shipping times are being extended more and more every day, with no real resolution in sight…
Eventually, even the American distributors of Chinese vape hardware will run out of inventory and then what? Getting anything from China right now is a nightmare, and it doesn’t look like it is getting better any time soon.
Where are you guys looking for a back up plan if this shit doesn’t clear up soon? Or do you think it will clear up before it gets to that point?
We are looking into sourcing new carts/disposables but it looks like the only manufacturers are literally ALL in China.
I’ve been checking in with our supplier regularly, and I am led to believe they are back at work this week, albeit in a very limited capacity. My order is relatively small, 4000 units, but they feel they should have it completed and ready to ship next week. That said, I’ve heard that goods getting out of the country are backed up considerably, so I imagine that to be the next hurdle. Also worth noting, I’ve received several emails saying “we hope to be back by X date”, only to receive another email stating they were delayed another week for government quarantine. As far as I know, this week is the first week they have been back since the new year. I would be keenly interested in alternative suppliers outside of China regardless Thats my two cents
“We are confident Chinese Government has the situation under control and we will be operating again very soon”
Every time. Which makes me feel less confident that they have anything under control.
And like you said, even if they are back in the manufacturing facilities, they are still backed up when it comes to shipping.
Only time will tell I guess, but if you hear of a cart manufacturer pops up somewhere else, please share!
So I actually looked into this for a client. We were talking about starting to manufacture carts in Mexico. I was charged with putting together all of the necessary info to make this investment. The main client/investor is a major perfume manufacturer and distributor. So as you can imagine, he’s pretty plugged up. After getting all of the estimates together for the components we were already over what we wanted our price point to be before even adding labor ($12-$15/day per Line worker). Nowhere has the infrastructure that China does for this. Mexico is one of the world biggest manufacturers and we still couldn’t come close to the price of China. Maybe one day… but not today.
I wouldn’t say we’re behind China. China just pays their workers such little money that it makes it impossible to compete with their labor costs, therefore making it impossible to compete with their manufacturing costs. If they payed their workers a respectable rate, they’d have to charge a higher price for the products and therefore driving the entire market up so that’s just completely out of the question for the world. No one wants to live in that world.
Well Kinsman said they couldn’t even compete with China’s pricing before factoring in labor… So that means he couldn’t keep up when he was paying employees $0/hr. So it sounds like labor isn’t the only contributing factor…
If you never factored in labor how could China possibly be cheaper? You would source the same components from the same markets to build the same manufacturing system whether in China or Mexico, so not sure why placing that machine anywhere else in the world would change the cost (besides shipping).
The labor prices factor into everything, though. Literally the entire factory was cheaper to even buildout because all the machinery is made in China. All built under cheap labor. Bought locally for some of the lowest market prices in the world. Any components they might outsource from other factories? Also the cheapest in the world. All due to cheap labor. It’s all affected by cheap labor. Even the the cost of rent.
As of 2019 Mexico average factory worker wages are approximately $3.95/hr and China is $4.50. That figure has changed dramatically within the last decade (increased about 2-3x) while Mexico has remained stable and the Peso/Dollar is stable as well. Anything that can be made in China should be able to be made for less in Mexico.
If you simply want cheap labor try Malaysia, Vietnam, etc.
True. Good point. But I there are other factors too, is my point…
Now if you are wanting to put up a facility in Mexico, you will have to purchase everything from where? Probably China. Which means there is no way you are getting it cheaper than they can. Their infrastructure is just gonna be impossible to compete with if you aren’t based out of China. Everything is cheaper there. Not just labor.
So your initial cash out is bound to be higher, affecting your cost to produce.
If you want to create a new design or re-engineer it then sure it will take you years (depending on how much $$$ you throw at it), but if you already know exactly how the machine operates, what parts it needs, and where to get the parts, etc. then I don’t see how this is different.
I wouldn’t be surprised if within the next decade you start seeing Chinese manufacturing companies that produce semi-complex products setup shop in Mexico to lower cost into the U.S market. Mexico is already the largest TV manufacturer in the world and has a highly educated and skilled workforce.
Thats my two cents