Chinese costing

[anfang]

As a result, many distributors in China will work on margins as low as 2%-5% whereas in the western world, distributors will demand a margin 10% minimum for high volume & for lower volumes it is often 50%.

This makes no sense. Digikey charges the same price in China as they do in the US on parts. And if margins were so thin, then nobody would buy Digikey and they'd go out of the business. And yet, they are thriving in China while charging the same price for parts. Why?

The answer is simple: For non-gray-markets, the price in China for parts is the same as part pricing in the US for US and EU silicon makers. Why would they offer cheaper prices in China versus US? There's no domestic challenger to most parts silicon vendors are selling in China. And thus, if they were willing to sell for less "just because", then that same philosphy would drive their prices lower in the US too.

[DerekG]

Digikey charges the same price in China as they do in the US on parts. And if margins were so thin, then nobody would buy Digikey and they'd go out of the business. And yet, they are thriving in China while charging the same price for parts. Why?

Digikey is very convenient as a one stop shop. You will find however that when you enter large volume production that suppliers such as Arrow Asia will nearly always beat Digikey's pricing by a reasonable margin.

[krho]

I had a quote made for the simple board at the qty 1000 it was a very simple 4 layer board. With some passives, some 1.27 pitch connectors M3 LPC, uSD card socket, usb connector.
If I disregard the other components the 1000pcs od said LPC were 22€!!! whereas we can get it in EU for approximately 6€. and asking an EU assembly house would probably get it for even less.