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China sourcing

Reading a factory price: material, labour, tooling, margin

A quote is one number hiding four. Knowing the proportions tells you which part is worth negotiating and which is not.

France → China

Buyers negotiate the total and get small concessions. Buyers who negotiate the components get structural ones, because they are proposing changes the supplier can actually act on.

The four parts

  • Material. Usually the largest share and the most transparent. It moves with commodity prices and with your specification, not with your charm.
  • Labour. Driven by cycle time and by how many manual steps your design imposes. A design change can move it; a negotiation cannot.
  • Tooling amortisation. If it is folded into the unit price, you are paying for the mould forever. Separate it out.
  • Margin. The only part that is genuinely about the relationship — and usually the smallest.

The question that opens the conversation

« Which part of this price would change most if I changed the design? » It is not an adversarial question, it is an engineering one, and it usually produces a better answer than asking for a discount. Suppliers who see a customer trying to reduce cost rather than squeeze margin tend to help.