Buy Direct from China or Italy? 3 Things Importers Should Know
October 10, 2022
For many years, importers thought long and hard about moving their supply chain to China because of the “poor quality” stigma. Despite vast improvements in quality over the last 30 years, many people ignore the fact that, for instance, super-high-quality electronic products are made in China (see the first of a five-part blog series on this). There is still a negative connection to that ‘Made in China’ tag on the T-shirt or gizmo you’re buying at your local Walmart.
Savvy buyers constantly scan the world for better, more advantageous sources of supply. Some want prestige. For example, importing from Italy has a certain cachet – one immediately thinks Gucci or Prada, even if you’re not into handbags! But is importing from Italy worth it? Importers need to know if the cost is justified to buy from Italy rather than buy direct from China.
Here are three reasons why “Made in Italy” can be less profitable than sourcing from China:
The Product is More Expensive
Labor in Italy is a lot more expensive than labor costs in China. While some industries, like the fashion industry, can charge higher prices for Italian garments, footwear, accessories, and leather products because of Italy’s reputation for quality and style in the fashion industry, other products made in China are regarded as the standard of all standards. Just ask any iPhone owner. Though it was made in China, you never hear about the poor quality of an iPhone.
The Product Is Not From Italy
Buyer beware: if it sounds too good to be true, it often is. It should come as no surprise that the fake tag “made in Italy” is a multi-billion dollar industry. Those beautiful scarves you’re seeing at your local boutique with the ‘made in Italy’ tag may very well have been made in China, India, or Vietnam. Or, perhaps they were designed in Italy or partly assembled in Italy, but most of the work was done in countries like China or India. Although there are low-cost factories in Italy (many are operated and staffed by Chinese), importers have recently found that quality is worse in Italy than in China for similar-priced products.
The Quality is Insufficient
How is it that products can have the tag “made in Italy”, but not be made in Italy? Part of the reason is that there are fewer strict regulations in Italy regarding labeling than in the USA. China’s regulations are very strict and require that if a product is made in China, it must indicate that on the tag.
The lesson here is, it is not where you source your products, but how well you do your due diligence. Importers might find that the quality may very well be much better in Italy. However, they will more than likely not be at the same price point as if the business were to buy direct from China. Country of origin is not a sufficient criterion for quality. To protect your brand, you must do your research, know your product, and be specific about your quality requirements when benchmarking suppliers, whether they are in Italy or China.
Have you attempted to compare your Chinese-made products to that of Italy? Or vice-versa? What were your experiences? Was the quality comparable? Share your experiences with us in the comments below.
By Jesse Alterman
Editor’s note: This blog was originally published in September 2017.