How Chinese company make mold cheaper

China Mold Tooling Die Fabrication

When performing manufacturing in china , if you use plastic parts you will probably need tooling.

Tooling for plastic injection are usually expensive in a certain measure. Of course it remains much cheaper to do a plastic injection mold in China than almost anywhere else on the planet: skills, materials, infrastructures and machines ate directly present on site. A significant part of a plastic injection cost is coming from steel and labor cost. Since labor cost in China is still affordable the cost of tooling is also affordable.

Now I am going to talk about something that many people ignore: how some Chinese manufacturers can propose to their clients some mold and tooling which are even cheaper than the cost of the steel used to make the mold. The solution lie in the word "sharing" or" splitting". I would rather say "sharing the cost" or "splitting the cost".

Have you ever wonder how come different Chinese suppliers have the same product on their shelf ? They share the mould cost in exchange several companies can use it. This practice is particularly true in the electronics industry for consumer goods.

Let's say you want to do a Bluetooth speaker made with a plastic enclosure and some parts (key, switch, etc). The mold cost is around 20 000 usd for example. This is not very expensive but in order to reduce the cost , 5 manufacturers would decide to share the cost so it would become only 4000 usd per manufacturer and the mould is dedicated to those 5 different manufacturers only. This is how you get different manufacturers with the same product: they use the same mold but assembly by themselves the parts.

Now the downside of it:
Let's say you have your unique design for a Bluetooth speaker and your sales are promising, you work with a Chinese manufacturer who is used to share his mold with other (but this normally you don't know it). You are going to ask him to quote for tooling price. You may find out a cost being very attractive and you will think you have make a very good deal. Unfortunately after a few months of distributing your product you will find many copycat on the market which are not copycat but your product made with your mold but shared with other manufacturers ! This point is particularly true when a buyer promise large quantities to its supplier, pay a ridiculous price for tooling and end up with not fulfilling the quantities. In this case, the manufacturer to cover its cost would simply produce for himself and for other to make justice himself.

The lesson:
Be always realistic in your procurement. If your mold is very cheap face to other manufacturer this means there is something probably wrong somewhere.

What is your experience about it? Have you experienced similar stories ?

About Christopher Oliva 59 Articles
Christopher Oliva is an Engineer based in Shenzhen since 2008 involved in Product Development, Supply Chain, Sourcing, Quality Management and Manufacturing activities. With a Msc Electrical Engineering and a Business Administration background, an ISO 9001 Lead Auditor Certification, a Six Sigma Certification and a Quality Engineering Certification, he works as a consultant on mission and contract oriented to Product Development, Manufacturing Management, Quality Assurance & Quality Management System setup. He works in the product development and engineering field, and as well as an advisor and quality consultant for several quality control and quality assurance companies.