Micro Factories

Since moving here I have been constantly surprised, shocked and amazed by some of the things I have seen in China. I guess a lot of these things are “You had to be there” moments that just pop out at you while on your way to find some milk – an expedition in itself! Others though are just things that make me think why does this not happen in the UK? One of these things is something I will call Micro Factories.

Sometimes when walking around just looking for something that might be interesting I come across streets of small shop sized units that are manufacturing an array of products, often spilling out onto the pavement. These can range from UPVC window makers to a guy making corrugated metal roofing sheets. We’re talking a real grassroots style operation with just three or four guys in a unit the same size as the garage at the end of your driveway. They use simple machinery and hand tools to make a product you would expect a large factory in the UK to churn out. What’s impressive about this is the scale of business they are doing from such a basic set up with what must be very low overheads. There is always a large stack of finished products sat there ready to ship out to customers, no sign of a recession here…

The main way they differ from the “proper” factories I have been visiting is that they are solely concentrating on the individual consumer in this domestic market. They are a lot less polished and they are all hands on workers manufacturing quickly and in an ad hok fashion. Anything done by hand here is cheap because labour is cheap. A nice haircut, for example, with a massage and manicure here is about £3. This means that with low overheads, and with owner manufacturers not owner fat cats, these places offer very competitive pricing and a tailor made service.

Anyway here is a selection of some of these micro factories I have come across, yes I feel very touristy taking photos when I’m out and about…

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This unit housed two 3 and 4 axis CNC machines. It was on a road with maybe 40 other units doing the same thing. I know from experience that there are about 3 places like this within a 15 mile radius of where I lived in the UK. This particular place was machining out industrial components from aluminum and was operating 24 hours a day. The other units looked to be working in the same fashion. All busy and all just getting on with it. I was previously getting an aluminum component from Taiwan that was costing about 5 USD per Item, the price to produce it in the UK was £26 the price in china looks to be about 3 USD.

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I had spent the day looking at samples of ultra violet water purification systems for aquariums and ponds when I came across this little place out the back of an industrial estate. It was manufacturing fish tanks, two guys making them by hand. They are supplying a local network of wholesalers and retailers with a variety of tanks and also carry out some bespoke work. They were buying in the bases and cabinets pre fabricated (I assume from another micro factory down the road) again there were a few of these places dotted down this road.

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This place is positioned right in the middle of a large and busy clothing retail area for locals. All of the shops here require shop fittings or displays and guys like this pretty much supply the whole area. From clothing rail displays to peg board walls it’s all made here, I was very surprised to see workers pretty much fabricating on the curbside as welders and angle grinders sparked up against unnerved passers by.

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I was literally out trying to buy a pint of milk when I saw this place open for business at about 6am. This guy and his son are making corrugated plastic roof sheets and corrugated metal sheets using his table roller on the right of the photo. They buy the material in rolls and simply feed it into the roller where it is pressed into its corrugated sheet form. Nice little business supplying local building trade and some builders merchants.

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Underneath the restaurant I went for dinner to one evening was this tiny unit making sprung mattresses. Chinese people seem to like a firm bed, I don’t think these would be so popular in England but here he seems to do a decent retail trade. I watched him winding the frames from steel using the machine in the right of this photo, while his wife covers them in fabric before sale.

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Lastly, and perhaps more of a “micro online business”, you might remember from my last blog I spoke of the guys selling bicycles online in a pretty big way? Well I looked more into this type of seller and found a couple of interesting places. Imagine an online retailer in the UK offering the lowest priced computer hard drives and peripherals. It sounds like a swanky set up right? Well in china the lowest priced hard drives come from small apartment 3 floors up in a mixed commercial and residential block. Here about 25 workers are squeezed into what looks like a 1 bedroom apartment packaging hard drives by the boat load. They are the cheapest seller online by about 10% and it’s pretty easy to see why.

As you can see there really is a wide variety of home brew type businesses here and for an entrepreneur like me it’s very exciting and inspiring to see this happening all around me.

I guess the main reasons why this kind of business would not be able to survive in the UK is a combination of red tape, labour costs and material costs. Here there is little red tape or legislation (as long as your Chinese), labour is low and material costs are also low. I can’t however help feeling that these people work this hard and offer there services for such a low price because they have no choice. With no benefits or dole system here it’s very much a do or die attitude and “do” is something the Chinese are quite good at. It’s like the glory days of the British empire where we believed in hard graft and moving forwards. Are we going to end up as a nation of benefits and tv dinners? I certainly hope not but something has to change because this place is leaving us standing.

10 thoughts on “Micro Factories

  1. what a great blog. My grandparents are from China and we used to go there a lot for shopping 10 years ago but it seems it has gone a long way now.

    I am doing business in the UK and France and would love to keep in touch.

  2. Hi Daniel

    I have just spent the lat 30mins readin your blog from start to finish, wow, I am truely blown away by it, I have been trading through Alibaba for sometime now but, you really have show how it should be done and the only real way you can get a good price and product is by seeing and doing it in the place that it is made. I am very interested in some of the products that you are selling, I have a few items that I am looking to source, if you every have any free time on your hands. What is the best way to contact you?

    Kind Regards

    Toby

    • Hi Toby, thank you for taking the time to read through my story so far.

      Your right, I think that being on the ground and getting into the mix here is the only true way of getting the best price and best product standard. It was not an easy step to take but I’m glad I took it.

      Please feel free to contact me via email, my address is on my contact me page.

      Thanks

      Daniel

  3. Hi Daniel, this is a really interesting post. I came across your blog from the Wholesale Forums and will check out your other posts also.

    Its amazing to see just how resourceful people in China really are. Just taking such a small space, they can make some goods that they sell locally. There must be thousands of these micro factories around China, what a great idea!

    • Hi Mark,

      Thanks for checking out my blog, hope you can continue to follow me on this little journey.

      Yes they certainly are resourceful and perhaps a country of real “self employed” drive.

      It is crazy to see the scale of business they can acchieve from such a small set uo.

      Impressive.

  4. Are we going to end up as a nation of benefits and tv dinners? I certainly hope not but something has to change because this place is leaving us standing.

    We already have Daniel. We have families near us who run two cars, live in a nice country property, brand new laptop computers, 46″ colour TV etc etc – and no one goes to work – it’s all provided by the state

    What chance do we have?

    • A good friend of mine works housing DSS tenants and its a difficult subject when you see some of them flaunting the system.

      Living in China you see the consequence of a country without a benefit system and its very sad to see i have to say. I believe as controversial as it is the benefits system in the UK is an integral part of our economy, without it I feel we would be in a much worse “recession”.

      As a country I believe it is fair to support your brothers and sisters in there times of need but there has to be a line, i just don’t know how there ever going to draw one now.