So, how much of the US retail price does the manufacturing facility get? “About 20%,” says Wang.
On a $30 toy, that’s $6, which has to cowl the price of the plastic and other supplies, manufacturing prices including wages, and what revenue the manufacturing facility makes.
Chinese factories sometimes make a revenue of between 3% and 10%, according to Jay Foreman, chief govt of US toy firm Basic Fun. So for a $30 toy that’s between 60 and 18 cents of the $6 the manufacturing facility fees to make it.
Samson Ko is president of the Toys Manufacturers’ Association of Hong Kong. Many of his members moved their factories across the border into mainland China in the Nineteen Eighties, attracted by cheaper land and labour.
He says the means toys are made has barely modified since then. “Automation now takes place mostly in the moulding and the packaging process. But for soft toys, or even some of the electronics nowadays, it’s still very labour intensive.”
And Chinese labour is not low cost anymore, he provides, after current rises.
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