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THAILAND- A SOURCING ALTERNATIVE TO CHINA

China has always been regarded as a world factory and it has attracted many companies and Amazon Sellers alike to source products from China. With an unprecedented pandemic that threatened to shut down the whole world, including the manufacturing industry in China. Most Amazon Sellers have since realized that relying on China alone to source products can lead to disruption of supply. 

It is therefore important for Amazon Sellers to maintain stable suppliers in different countries as this can help reduce the risk. One of the countries that can be a sourcing alternative for you is Thailand.

Thailand is a great sourcing alternative to China as it has the following great factors:

  1. Many industries 
  2. Good Logistics 
  3. Ease of doing business
  4. Economic Reforms
  5. Skilled Labour

Before we look into the factors that make Thailand a sourcing option, let’s take a trip to Thailand to find out about it as a country.

BRIEF OVERVIEW OF THAILAND

The Kingdom of Thailand is a country situated in South East Asia. Apart from being known for tropical beaches and ornate temples, Thailand is also known as an export country. As a matter of fact, in 2019,  Thailand’s total exports were $249, 777,335,000. Thailand mainly exports to the U.S.A,  the European Union, China, and Japan. According to the WorldBank Thailand has steady economic growth much of which comes from exports. Could Thailand be a ready-made replacement for your Chinese supply chain? Let’s explore the five factors highlighted above that will help you determine whether importing from Thailand is right for you.

  1. THAILAND HAS MANY INDUSTRIES

Thailand has many industries that export to many countries. Some of these industries are: 

  1. Machinery and Electronics:- This industry makes up Thailand’s largest portion of exports.
  2. Automotives:- Most automotive companies like Toyota and Ford have their facilities in Thailand.
  3. Rubber and rubber products:- Thailand is the largest producer and exporter of rubber.
  4. Food processing:- Thailand’s largest food export is rice.

2. THAILAND HAS A GOOD LOGISTICS SYSTEM IN PLACE

Thailand performs similarly to China especially in the timeliness of shipments. Companies importing from Thailand are less likely to experience unpredictable shipping delays compared to less-developed countries like Bangladesh, Cambodia, and India.

If you need proof, let’s turn to the Logistics Performance Index (LPI) done by the WorldBank.

From the screenshot above, you can see that Thailand was ranked 32nd out of 160 countries in 2018 for logistics performance. 

3. EASE OF DOING BUSINESS

With its respect and readiness to enforce contracts and commendable cross-border trading, Thailand has grown to high ranks in terms of ease of conducting business. It is easier for foreigners to trade source their products from Thailand as the system has been made easier for all kinds of traders through regulated taxes and policies.

4. ECONOMIC REFORMS

With economic reforms that have taken Thailand from a low-income country to an upper-income country, Thailand has turned into a great production and trade hub.

This makes it easier for international trade to be conducted as the reforms take into consideration trade barriers and better policies to aid trade.

5. SKILLED LABOUR

Although labour costs are not as cheap as they could be, Thailand boasts of a skilled workforce represented by active participation of women, youth and also older workers in the workforce. This workforce possesses vast knowledge in production and exports, which is something you must take advantage of.

Additionally, Thailand is moving from a labour-intensive manufacturing system to an advanced manufacturing system which will not only reduce operating costs but will also improve production efficiency.

CONCLUSION

As an Amazon Seller, you obviously understand the importance of thorough preparation and research that goes into finding the right sources for your product. You will need to source your product from a country that has existing industries, expertise, and resources to make your product. With Thailand already providing all these factors, it is no doubt that Thailand is an alternative sourcing country that you must consider.

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