Why Many Kinds of Products to Buy from China

Chinese manufacturing has come a long way. Even though it is commonly mistaken for being just the world’s assembly line, it has been constantly innovating, fine tuning supply chains, accumulating human capital, increasing labor productivity to stay competitive despite rising wages. The Chinese government’s push in developing transport infrastructure has given it the benefit of reduced transaction costs. For example, China has 4 of the six biggest ports in the world. Despite low wages, most other countries where manufacturing is expected to go when it leaves China needs decades to build this kind of infrastructure.

High Labor Productivity:A simple hundred year old stylized fact in Economics, economies of scale. Labor productivity is still rising in double digits in China while other east Asian countries are still lingering around the productivity levels Chinese had in the 90’s.

Advanced Supply Chains:Chinese factoring are not assembly lines anymore. Most of the components of products China sells are manufactured in China itself. The supply chains that were in Korea and Japan when China’s manufacturing was in its nascent stage are now hoisted by China boosting the competitiveness of its factories.

Increased Automation: Chinese firms have started investing steadily in automating their manufacturing processes. Investing in automation is easy for Chinese factories with the smooth supply of credit by Chinese banks. Increasing automation by promoting import of machinery by way of reduced custom duties is one of the main priorities of the Chinese government in this five year plan. 

The above major factors has made answer why manufacturing is seen as rising in China recent years.

How to Set Your Amazon Price

Amazon Pricing

Pricing is very competitive on Amazon. Not only does this affect the chances of winning the Buy Box, it is also one of the main contributing factors to a customer’s ultimate decision as to whether they ought to purchase from you or another seller.

The logic should be: if sales are high then the prices get raised, if sales are low then the prices get lowered. Unfortunately, things are not as simple as that.

Amazon’s algorithm is very complex and cutting your margins through price reductions doesn’t always improve your position on Amazon. That is why it is paramount to understand the various differences in pricing and the various pricing strategies.

There are two types of prices on Amazon, that any seller must be familiar with:

Item price – this is the cost of a product only. This is the price customers will see minus shipping costs and any other factors that may affect the total price.

Total price or landed price is the price with everything included – this is what the customer, should they buy, pays. The following are included in the total price:

  • Shipping and handling charges;
  • Discounts, rebates, or special sales/promotions you offer/make with respect to purchases;
  • Shipping method;
  • Business practices, such as any reduction or elimination of shipping charges on an order, or of any other order-related fees and expenses;
  • Low-price guarantees.

Note: If you find your product is in the ‘Other Sellers on Amazon’ section (where you don’t have the Buy Box yourself) you ought to bear in mind Amazon lists products based on product price AND shipping price.

Amazon repricing

Many sellers choose to undercut their competition, usually by $00.01 or £00.01 in order to earn a better place in the marketplace. Undercutting the competitors is called ‘repricing’ and it can be done via:

Manual Repricing: As a seller, you can choose to reprice yourself. This involves changing the price manually through Amazon Seller Central – or via other sites should you be managing your products this way.

This will only work for sellers with a few products, as it is time consuming, but gives you a clearer understanding of both you and your competitor’s products and pricing.

Repricing tools: To help with the competitive nature of pricing, repricing tools like XsellcoRepricerExpressRepriceIt and Appeagle can be used to automatically undercut competitors on the same listing. You can set a minimum price so the system doesn’t go below this selling price otherwise you could sell the product at a loss.