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Main Differences Between Manufacturing in Mexico vs. China



Shipping Cost



Small Quantities Orders



Quality Control



Plenty of Maquiladoras

The difference in comparative shipping cost between Mexico and China has been exacerbated in recent years by the rise in oil prices. The average yearly price differentials to ship a 40 ft. container to the East Coast from Mexico and China are represented in figure 2 below.

Due to distance, customs, and import transactions a product´s transit time can taket up to 3 weeks logner between the U.S. and China than between the US and Mexico. The North American Free Trade Agreement (NAFTA) allows goods produced in Mexico to flow northbound across the U.S. border quickly and efficiently
Our service solves the problem currently faced by American companies that order and manufacture their products in China. When doing business with China and/or other parts of Asia, American companies are usually requeired to buy and order LARGE quantities – and need someone to supervise the quality of the manufacturing (which usually NEVER happens).
Now that China is getting more expensive, and with their constant production quality issues, many companies are choosing to take their manufacturing back to the USA, or to nearby countries, such as in Mexico.
MEXICO offers many MAQUILADORAS (Manufacturing plants) very afordable production cost, proximity to home (the USA), and much better access for quality assurance supervision. Due to the high shipping cost and and longer wait times of sending products from China, plus the increase in overall manufacturing in China, many US companies are looking for alternative manufacturing solutions – and Mexico (which is super close) is a great alternative.
Facts and Benefits of Manufacturing in Mexico & China

Operational and total market costs can be lower than China. The difference between a near shore outsourcing and manufacturing in Tijuana, Mexico and offshoring to China:

No cultural and language barrier

The cultural barrier, makes offshore outsourcing more risky and complex. The only reason for chossing offshore over nearshore will be the price.
Sharing a Time Zone

Nearshoring operation to Mexico means similar geographical, political, historical and cultural backgrounds and the ability to have face to face meetings. with the contractor.
Proximity

According to the World Bank, Doing Business 2012 Report, Mexico is the best place in Latin America to run a business. FACT: Mexico is 46 times closer than China.
Infrastructure

Tijuana and the State of Baja California have an excellent industrial park and manufacturing facilities infrastructure. Tijuana provides immediate access to the border.
Intellectual Property Protection

The commitment to the protection of intellectual property, makes Tijuana, Baja California the ideal place to manufacture goods for US consumers.
Save Cost with Mexico’s Contract Manufacturing

Mexico contract manufacturing or sub-contract manufacturing is often a solution for companies wanting to enjoy the benefits of Mexico’s highly qualified, yet lower cost labor FACT: Labor cost in Mexico is 14.6% lower than China's.
Comparative Analysis of Mexican vs. Chinese Manufacturing
Point of
Comparison

MEXICO


CHINA
General Differences
Shipping Transit Time to U.S.
Quality Issues
Other Shipping Considerations
Protection of Intellectual Property
Availability of Qualified Workers
Fully Burdened Direct Laborer Wage Rate
  • At most, a few hour flight away
  • Time difference from the US: From 0 to 3 hours
  • Many Mexicans speak English, and Spanish is the most common foreign language taught in U.S. schools. Both languages share Latin roots
Less than one day
When quality issues occur, distance and transit times make sending the product back for reprocessing feasible
  • It is possible to ship in pallet or box quantities allowing flexibility with customer LTL orders.
  • Ocean freight is not required
  • Shipping cost per unit is low and only slightly higher than shipping from the U.S.
  • IModerate or no duties, in most cases
Intellectual property is protected and Mexican courts typically respect and enforce companies
Generally plentiful, excepting tight seasonal periods. High birth rate bodes well for a long term supply of labor.
Approximately $2.50 to $3.00 USD per hour.
  • Half way around the world
  • Time differencefrom the US: 15 hours
  • While China has many English speakers, the cultures have few common roots and the native languages are not grounded on the same root.
Several weeks not including transit to or from ports. Small quantities can be shipped by air in two days at a high cost per pound
When quality issues occur, which is frequent with startups, it is very difficult logistically to deal with rework or returns, due to distance and communication barriers. Most quality problems simply become write-offs.
  • Generally ship in container load quantities limiting flexibility
  • Potential dock strikes
  • Shipping cost per unit can be high, particularly for bulky items, and given the high demand for containers from Asia.
  • Duties can be substantial depending on tariff code
Counterfeits are common in Asia and courts have been slow to enforce or recognize intellectual property rights.
Generally plentiful, with some higher concentration of engineering talent. Low birth rate is a long term significant labor problem.
Approximately $2.00 to $2.50 USD per hour.

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