Let us address the elephant in the room…
What if you just finished signing some contracts in China? What if you’ve just set up your China supply chain – and the thought of doing it all over again in another continent does not exactly make you squeal in excitement? What now?
First of all – we understand where you’re coming from. For now, China is THE place for eCommerce sourcing. But remember – Rome wasn’t built in a day – and China’s sourcing industry wasn’t that great before Amazon got involved. Amazon went to China in the early days to train them in more efficient supply chain processes that meet Amazon’s standards. Fast forward to now, China is the gold standard in eCom sourcing – and along with that comes the privilege of dictating things to go their way.
This has not been done in Mexico yet. We’ve said it again and again – The Mexico Trip is THE first of its kind. This is a once-in-a-lifetime opportunity to be a pioneer in an industry that’s about to blow up. Yes, we’re claiming it. Mexico is going to be BIG in eCommerce – SOON. You heard it here first.
Second – who says you have to let go of China? You don’t have to. In fact, letting go of China this early in the game may not be the wise thing to do. We know we said Mexico is going to be big – but they’re not there yet.
So – if you’re not letting go of China – what else can Mexico do for you? Here are 3 ideas:
1 – Logistics and Warehousing
Logistics and warehousing are more affordable in Mexico than in China. So why not take advantage of that? Think about it – sourcing your raw materials in China costs money, manufacturing your products in China costs more money – then you gotta spend even more money for logistics and warehousing. How much more wiggle room for profit will you have?
Having your products made in China but moving your storage and logistics to Mexico will improve your supply chain efficiency not only in cost but also in lead times. Your products will now be coming from a location that only takes 2 days to reach the USA and only costs a few hundred dollars to ship to you.
2 – Importing Raw Materials
Did you know that if your raw materials come from China but the manufacturing is done in Mexico – then your product’s country of origin can be changed to ‘Made in Mexico’? This is another advantage especially with unfavorable impressions that ‘Made in China’ products unfortunately have – and again logistics and warehousing benefits in Mexico are just *awesome* (refer to #1).
3 – Freelancers / Hiring
Mexico is a minefield of skilled workers in the manufacturing industry – from engineers to R&D professionals who can help you in the product development stages. You know what else is more cost-effective in Mexico versus China? Manpower. You can hire freelancers at a more affordable rate than hiring workers from China or the USA.
Remember – for now, the goal is not to move everything over to Mexico in one go. That is not realistic and also a very risky thing to do. The goal is to DIVERSIFY. You want to spread out your sourcing options gradually – so you can scale your business in a safer and less risky way.
Do you agree with all our ideas? Got any more to add? Share them in the comments below!