Is it cheaper to make in China? Well, we all say it is but have you really worked out the numbers?
When you need to buy packaging, load your product into cartons, pay shipping costs, duties, commissions and ocean shipping, it may be better to source locally.
The packaging materials themselves can be cheaper, but not as much as you may think. The key savings lie in the co-packing. For example, in China they may include this service at no charge or a very small fee, so small that its barely noticeable. In North America you would pay an additional $0.04 to $0.40 cents per unit to load product, so on large orders this can add up to a large cost quite quickly.
To arrive at a rough estimate, if you add 30% to your final cost this is approximately what your landed cost from China would be, including co-packing. A $12.00 cost in China will end up landing at $15.60. Thus, two key components influencing your decision to source locally or from China, are volume and co-packing cost. Of course there are always other costs and scenarios to consider, but these are the main costs.
Also, other considerations include: co-packing costs are also based on the type of products you need loaded, and whether it's automated or done by hand. These can also be important factors in influencing your decision.