If you’re joining us on The Mexico Trip, you need to remember one thing – Mexico and China are not the same. These two countries are on opposite sides of the world – which may also explain the disparities in their respective supply chain processes. Mexico is a developing nation, while China is one of the richest economies in the world today. That alone explains the differences.
So as another way to set your expectations for our upcoming trip, here are the 5 biggest reasons why sourcing in Mexico is NOT like sourcing in China. Read below:
1 – There’s no Alibaba in Mexico
Not yet, at least. Rumor has it that Alibaba is planning to expand in the Latin American region soon. But for now, we are going to have to take care of business in Mexico the traditional way – via face-to-face meetings, exhibits, factory visits, etc. There is a good number of manufacturing, logistics, sourcing, shipping, and other companies that can contribute to Mexico’s emerging supply chain industry, however, some of them are not easily accessible at the moment. Many of them don’t even have websites.
2 – Mexico Is Not Yet Used to E-Commerce Culture
To say that eCommerce is fast-paced is an understatement – eCommerce operates at lightning speed – and supply chain must keep up. Mexico’s supply chain is in the developing stages, therefore may not yet be up to speed and will not be as efficient as China’s. Dealing with suppliers in Mexico will require a little bit more training and patience – but we are confident it will have its rewards.
3 – Lower Labor Cost
Mexico’s hourly labor cost for manufacturing is $4.82/hour – China’s is $6.50/hour. Outsourcing your manufacturing, logistics, and other services to Mexican workers will bring down your total overhead costs – allowing you wider margins and bigger profit.
4 – Free Trade
The US – Mexico – Canada Agreement (USMCA) implemented free trade (no tariffs) to encourage healthier trade relationships across the three North American nations. This is another advantage in sourcing from Mexico especially if you compare it to our complicated trade relationship with China (as a result of the US-China trade war) and rising tariffs attached to buying goods from China.
5 – Easier, More Efficient, and More Affordable Shipping and Logistics
Perhaps the biggest and most obvious difference between Mexico and China is their respective locations – China is about 6,000 miles further away from the US than Mexico. Mexico’s proximity means more affordable shipping costs – from thousands of dollars to just a few hundred dollars, faster lead times – 2 days instead of 120 days, easier tracking of shipments, and tons of other benefits.
These 5 differences between sourcing in Mexico and China pose a lot of advantages and disadvantages that are important for us to be aware of. But you must also remember that China wasn’t always the manufacturing powerhouse that it is now. It just so happened that previous businesses took notice and helped develop their sourcing industry to what it is today. If you think about it – if that can happen in China – can’t it happen in Mexico? We believe it can. That’s why we’re going there.
If you know of other differences between Mexico and China, based on facts, studies, or even based on your own experience – we hope you can share them with us in the comments below.
Also – please stay tuned on our Facebook page for exciting updates on The Mexico Trip. Just a few weeks to go!