Can you make a profit on a 15 cent lighter?
China can.
And it has nothing to do with cheap labour.
Shaodong (a city in China) makes just lighters.
And billions of them every single year.
Here's how:
Every supplier is within walking distance:
* Mould shop
* Logistics Hub
* Raw Material
So, what takes the West weeks (sampling, modifying, producing)
takes China 24 hours.
Western founders want 50% margins.
China runs on less than 1 cent profit per lighter.
And still wins.
Because at 100 million units - 1 cent is everything.
Lesson:
Your margin does not live in your pricing.
It lives in your system.
The lighter is not the product.
It is the proof.
Credits: @HarperWood6401
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