As many has spoke to us about how we managed our cost?
The secret lies behind this walls.
We have a assembly facility in Canton which we buy of parts from big factory and QC them before we pay and we buy material which comply to international standards which not many factories would as it drive up their cost.
We are in the project segment and our cost structure is very different from many other retail models.
We take order 8 weeks in advance for commercial clients and usually medium to large orders, clients often want reliable pieces that aren't cheap or at least not cheap looking. Thus higher quantity material such as CE, UL standard fittings are required. Lamps should not rust or fail over time as this may result to temp closure of their businesses due to rectification or replacement works. So quality to the client is very important. Also, when client buys in large volume they will always have a budget and squeezing for prices is normal.
We take order 8 weeks in advance for commercial clients and usually medium to large orders, clients often want reliable pieces that aren't cheap or at least not cheap looking. Thus higher quantity material such as CE, UL standard fittings are required. Lamps should not rust or fail over time as this may result to temp closure of their businesses due to rectification or replacement works. So quality to the client is very important. Also, when client buys in large volume they will always have a budget and squeezing for prices is normal.
In the chart, our price structure may seem like we have slim profits but with volume we do make sufficient to cover our expenses. Our expense are relatively low due to the fact we do not hold many stocks. The only stocks we have in hand are project surplus and prototypes which we try to actively clear.
While most of our prototype are 50% paid by client with air freight so these items are sold below its actual cost.
Also, once a while we have clients asking for very premium material and finishing so we do get some questions like:
"Why some of your lamps looks like those on TaoBao and you are more expensive?"
However, what many end consumer who aren't Quality Savvy may fall into traps of Chinese Online merchants.
One of the parts supplier parts to us who also have a TaoBao trading account says;
"In Taobao, everyday is a price war! If u r the cheapest,u get volume. Everyday we are in the look out for the cheapest materials or engineering methods to cut cost. Anyway Chinese buyer here understand the meaning of 一 分 钱, 一分货 (price and value ratio). Example, If u buy a $2 milk powder, u can't expect the nutrition of a $10. We have a wide range of buyer groups in China. Some just want to look like they can own it, while some are looking for quality and reliability." Loosely translated
