fan
In India, the fan retails for ₹ 9,199/-, while in Shenzhen, it retails for 650 yuan, or 500 yuan if you order 200 units. Factory prices for manufacturing and assembly range from 380-400 Yuan. It retails for $249 in Europe and $185-230 in the US. So when Atomberg tried to sell one in the U.S. for $150, both the U.S. and Europe would laugh and say, “We’re quoting $70 in Shenzhen.” India may be protectionist, but in Europe or the U. S. they cost almost $300 to make, and retail for $450-500. So buying at $70 a piece is a boon, allowing them to make at least $90 in profit. That’s how China Works. It allows the hard-pressed middle class to still afford goods. Today, you can buy a hairdryer for $8-$10, thanks to China. Today you can buy a top-of-the-line iPhone for $1,100 instead of $2,300 to $2,500. Your lawnmower motor comes from China and costs $140 to replace, compared to $600 to $650 if it’s made in the U. S. Today, you can install eight solar panels for $1,900, compared with $6,000 a decade ago. Wow, in India, a home solar grid cost $40,000 in 2013. Now it costs $12,000.
A German company came to China and ordered 2,000 curling irons, each costing 300 yuan, to have their trademarks printed on them and to have the boxes and manuals printed in German. So the price of a curling iron is $38. In Europe, it retails for $118-$120. The same factory received an order from a Japanese company at 2 p.m. for 1,000 units at 340 yuan each, and from a Hungarian company at 3 p.m. for 800 units, the price is 370 yuan each. The same factory makes all 3,800 curling irons and identifies them by brand, box, and user manual. One retails for $118-120 in Germany, one for $87(36,000 forints) in Budapest, and one for $80(13,000 yen) in Tokyo. The Chinese factory manufactured the 3,800 orders, with revenue of 1.236 million yuan and after-tax profit of about 10 yuan. Isn’t this a win-win situation? Do you know the price of Curling Irons in 2000? About $100. So, thanks to China, Europeans are still paying the same price for curling irons as they did 20 years ago! If made in Germany, the retail price would be €350.
In India, for example, a shoddy Micromax phone sold for $17,000/-in 2013. If you wanted a smartphone, you had to pay $17,000/-for a shoddy Micromax, Lava or Intex phone, or $40K for a Samsung, or buy an iPhone 5 for 60K. The Micromax is 50% the quality of an iPhone or Samsung and costs about 40% !
Today, you can get a 90% quality smartphone for the same $17,000/-at 20% of the price of an iPhone !! Ten years! Again, thanks to China!
That’s economics! You will never fail. So this is called win-win economics.
Do you think the U. S. can fight and win economically? No Way. The only way is to create another China, or give up and enjoy the Chinese price. This is the ultimate game here.
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