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Hi Guys,
Well it sure didn’t take long for someone, to pose a whole big bunch of questions for me to ponder over and give you my “tuppence-worth”…
Some of the questions really require an awful lot of answers but I’ll do my best to answer as best I can… in as clear and concise a manner as time and space allow.
1)China…
China, as virtually everyone knows is the world’s workshop and factory… In the 19th.Century it was Britain… in most of the 20th it was America… today it is The People’s Republic.
Personally, I feel privileged to be at the right time in the right place to benefit from this.
Our company was one of the first to move into China just as it was opening up to foreigners. Being based in Hong Kong I do feel we have a major advantage over many of our competitors (who also produce in China) but rarely visit the place. Myself and the K&C team visit mainland China at least once (or more) a week throughout the year. We see our sculpting team who are based there and visit the different factories we work with.
This, for us, is essential both to closely monitor the work, quality control it and, hopefully, head-off any disasters before they happen!
At the same time we can assess if one factory is having production problems and, occasionally, transfer work to another to open up a “log-jam”.
We also get to see first-hand labour conditions and improvements for the workers’welfare.
It amazes me that some competitors only visit their suppliers once-in-a-blue moon. I personally know of one competitor who has been dealing with China for many years now and has never, ever visited his manufacturing operation!!!
2)Labour, Political, Financial and Personal Problems…
Let’s start with Personal… so far, so good I personally have never had any major problems working with and in China… end of story!
Labour… is getting more expensive. As China grows the workers want and deserve higher wages and better working conditions… They work hard… they are skilled and reliable… and they deserve it.
Political… China’s human rights record is not great but when you are trying to run the most populous nation on earth you cannot always be “Mr. Nice Guy”… However the question that must be asked is… “Are the majority of the people better off now than they were 20 years ago?” The answer is a resounding YES!
Do they have more freedom than 20 years ago? Again YES!
Do they have more opportunities? YES! Once more…
Is their Government getting better? Yes.
Overall China has made the transition from a state-controlled monopoly to a market-driven economy with less upheaval than Russia… and much more successfully for many more people.
Financially… China is awash with money… and much of it is going into building an amazing infrastructure of new highways… bridges… dams… airports and port facilities.
China is and will be a major force to deal with in the 21st Century. And considering it has 1/4 of the world’s population that is as it should be.
3)Production Problems
Richard (of Britains) has already told you of their problems in China. Everyone doing business there has similar situations (to a greater or lesser degree), so has K&C. Perhaps we have been more fortunate in being “on-the-ground” and dealing with some of them before they grew into even bigger headaches!
4)Product Price Rises
China, like the rest of the world, is affected by rising and unstable oil and gas prices… additional raw material costs… and the previously said labour costs. To be honest, prices had to increase however I am modestly hopeful that we may see some stabilizing of all these factors that contribute to higher prices in the coming year 2009.
At the same time we are also looking at where we ourselves can make effective savings while still improving the quality and variety of our product.
5)Reduce Shipping Costs?
If you (or anyone) can tell me how to reduce shipping costs when air and sea freight charges are still rising then… you win the coconut!
6)More Dealers… More Competition… Lower Prices???
More dealers and more competition without effective price controls leads to “Price Wars”. Initially it might be great for you… For the dealers it leads to cut-throat competition… where the “small guys” go to the wall and the “big guys” clean up!
“Price Wars” reduce the dealers profit… the dealers buys less King & Country… King & Country produces less new product… the collector has less not more choices and… we all ultimately lose.
Of course many will disagree with my thesis… However, if they do, let them set up their own company and prove to me (and others) that their business model works better!
But remember before anyone says (or writes) look at WALMART… look at TOYS ‘r’ US… this hobby and business is a “NICHE MARKET OPERATION” that produces a hand-made, hand-painted product in very small quantities. We are not mass-market and have no wish to be a HASBRO or a MATTEL.
And that, my friends is that. I’m sure there will be a response to what I’ve written. But you asked for my opinion and views and that’s what I’ve tried to express as honestly as I can.
Best wishes and happy collecting!
Andy C.
P.S. As regards prices the U.S. has probably the least expensive K&C prices outside of Hong Kong… Europe and Australia with their import taxes and Value Added Tax are considerably higher. So, don’t complain too much or the Inland Revenue might take another look at toy soldiers!
