Why are Chinese injection mold costs still lower

January 25, 2021
Customplastics

Lower mold prices overseas

For many years we have this stigma in our heads that if you want something cheap, go to China. While public opinion about Chinese quality has surely changed, the low-cost stereotype is still there. Injection mold costs are no exception to this common perception.

It has all be accounted to China's low labor costs as well as the hard-working conditions. Hard-working labor that gets 1/10th salaries compared to people in the States. However, over the years the labor cost in China has increased significantly. Many labor cost-sensitive industries have already moved out of China, such as the textile industry.

While countries in South Asia, Africa, and South America are tempting manufacturing industries with lower labor costs, there must be a reason why we are still so dependant on Chinese suppliers.

Many SMEs simply do not have another choice than purchasing their injection molds from China. Surely, many would like to contribute to the domestic economy, but staying competitive is what keeps your business alive.

At the same time, finding out that your local supplier actually subcontracts your product to China, can be devastating.
It is in your best interest to understand more about the plastic injection and mold making industry. It can save your business a lot of money, time, and headaches.

Main factors for injection mold costs

We talked about injection molding costs before, now let's take a look at injection mold costs.

The most obvious reason why injection molds are expensive is that they are custom manufactured. You won't just go to a manufacturer and buy a mold off the shelf. You need something that is tailormade only for your product. This means that manufacturers need to be flexible and have a broad repertoire of knowledge and experience.

Most suppliers are somewhat specialized in a certain niche, but even within that niche, there can be a lot of variety that requires large investments.

plastic injection mold

The 4 big cost factors in injection mold making

  • Design & Simulation
    You most likely have a 3D file for your product right? Now the manufacturer needs to develop a 3D model of a mold around it. This takes work and experience that you pay for. They need to ensure that the part can be manufactured by injection molding.
  • Material & Components
    Steel material & components make a large fraction of the total costs. There is no factory that does not have to source certain components from outside. Those costs often will be transferred to you 1:1. It is not part of the main value-adding processes of your supplier.
  • Manufacturing
    A large variety of machines are used in mold manufacturing. CNC milling centers, EDM machines, and WEDM machines can cost more than a large house in a state with low CoL. The prices between low-end and high-end machines are comparable to the difference when buying cars.
  • Quality Control & Testing
    Not only do they need expensive machines such as CMM machines and projectors or 3D scanners to ensure quality, but also a lot of manpower is needed to rigorously check the mold at most steps. The final inspection of your part can take days.

Chinese cost advantage in injection mold manufacturing

Chinese companies, especially in manufacturing, have plenty of advantages over domestic companies. While labor certainly still plays a significant role, there are other factors that I would rate even more important. Many of the cost advantages apply to low-end to medium-high-end products.

injection molding process
  • Cheaper Machines
    Most Chinese factories are totally fine working with Chinese-made machines. On one hand, those machines don't have as much precision and reliability as their Western counterpart. On the other hand, they only cost a fraction of the price.
  • Copy Standard Parts
    Molds are built with a lot of components that you can buy off the shelf from brands such as Hasco, DME, and Misumi. Those brands build up a standard over the decades, which is most commonly used nowadays. It makes it easy to replace components, no matter where you are.
    Many Chinese suppliers use copy parts, which follow the same standard but are of inferior quality.
  • Copy Auxiliary Equipment
    There are plenty of tools, instruments, and other equipment that you need when running a factory. Buying all that from other Chinese suppliers makes it much cheaper than the original Western counterparts. The quality is not as high in most cases, but often it is enough.
  • Industry Cluster/Business cluster
    In China, there is such a large amount of industries in every sector, that creates valuable synergies. The Shenzhen and Dongguang area in southern China for example has become an injection molding hub. Outsourcing, labor, and service for anything about injection molding are widely available here. Those synergy effects are one of the main reasons why the prices are still so low, despite rising labor costs.

Chinese molds are always cheaper

No matter how low your target price is, you will always find a shop that is willing to take your order. Chinese businesses, especially in custom manufacturing such as injection molding and injection mold making are unlikely to turn away orders.

Often they are willing to compete with each other to provide prices, that are incredibly low. Especially in the low-end to the mid-end market segment, this is a race to the bottom. The company that agrees to the lowest price often gets the order.

However, this is not necessarily what you want. Those factories are experienced and know how to turn a profit. At some point, lowering their injection mold costs will result in less satisfaction for the customer.

Countless times, Western companies have been burned here in China. This is often because of their idea of doing business. The idea that once agreed on price and product, this is set in stone, is the thinking that brings those problems. Often the supplier could not even fulfill your order and break even if he was to follow every aspect of the contract. That is why many Chinese suppliers tend to see this as a bit more flexible.

They want the order, but at the same time want to still turn a profit.

Supplier's tricks to lower the injection mold costs that you don't know

Despite already having cost advantages over many countries, there is a range of other tricks that Chinese suppliers use. Lowering injection mold costs allows them to take orders that are impossible to manufacture in a quality-driven approach.

  • Low quality steel
    The use of uncertified steel, if not specifically stated in the order, is almost standard. The supplier will always take the cheapest steel available, not the best. Make sure you get the right type of steel, cheating here happens often in the low-price range.
  • Skip on quality control
    Some suppliers found out that this is the only way to compete with such low prices. This way you might get a part that somehow fits your requirements, but whatever changes have been made to your mold are a secret to everyone. This makes repair work, corrections, and future duplicates much more expensive and troublesome.
  • Fake measurement reports
    If you are a rather unimportant customer and at the same time not willing to pay a fair price, then you might get cheated on the measurement reports. Once the mold is paid in full and shipped to your country you eventually will find out that it is a piece of crap that won't produce your much-desired parts.
  • Cut corners, overcharge where they can
    Wherever they can cut corners, such as using different plastic material for the samples or using regrind despite this wasn't part of the deal. Another way that many suppliers try to get some extra money is by overcharging you for standard components.
quality control China
Quality has its price, also in China

Are Chinese molds worth it?

YES! A very clear statement in regards to molds made in China. There are plenty of good suppliers that treat you well and provide high-quality parts. Even your high-end requirements will find a suitable partner here. Despite what most people think, quite a few factories have the latest and best machines from Japan and Switzerland.

This combined with strict quality control and experience can provide high-quality molds made in China.

However, you should understand at least the basics when it comes to buying molds and how to price them. Especially in China, there is one statement that sums everything up perfectly.

You get what you pay for

So don't just look at the price, as saving a couple of thousand dollars can easily end up costing you 10times. It has happened to many companies before you and happens especially to those that are new to sourcing in China. Take a look at the plastic molder directory of PlasticNews, there are quite a few decent companies that can give you a great product for your money.

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