Inflatable rubber ring cushion supply chain and price problem

The price gap of the same inflatable rubber ring cushion in European markets such as Italy, Germany, Belgium, the Netherlands and Germany is quite large. The price range is from about 15 euros to about 40 euros. Why is this happening?

Why are the prices so different？

A. The difference between purchasing mode/flow, Usually, there are two types of importers who purchase rubber ring cushions. One is to purchase only inflatable cushions, and the other is to purchase rubber cushions and rubber Hot water bottles at the same time(This kind customer's product line includes both rubber cushions and hot water bottles)

1. The first customer's purchasing mode is divided into 4 types

Importers – Yangzhou local trading company – rubber hot water bottle factory – rubber ring cushion factory

2. Importers- trading company outside Yangzhou area – rubber hot water bottle factory – rubber ring cushion factory

3. Importers – Yangzhou local trading company – Inflatable cushion factory

4. Importers - trading company outside Yangzhou area – Inflatable cushion factory

For the second type of importer who purchases hot water bottles and inflatable cushions at the same time, the situation is very complicated. There are mainly two situations. The first is that the trading company chooses different hot water bottles and rubber ring cushion factories according to the actual situation. The second is that although the product line of importers’ company includes both hot water bottles and rubber cushions, the procurement time is different. The purchasing pattern of the second kind customer is similar but not identical to the first.

1. Importer – Yangzhou trading company – rubber hot water bottle factory – Inflatable cushion factory

2. Importer – Yangzhou trading company – rubber hot water bottle factory

2.1 Importer -Yangzhou trading company – Inflatable ring factory

3. Importer – trading company outside Yangzhou area – rubber hot water bottle factory – rubber ring cushion factory

4. Importer – trading company outside Yangzhou area – rubber hot water bottle factory

4.1 Importer – trading company outside Yangzhou area – rubber ring cushion factory

Such a complex process incurs considerable additional costs

B. Not all hot water bottle factories produce rubber inflatable rubber ring cushions.

At present, there are a total of 3 hot water bottle factories in Shiqiao Town that produce inflatable  cushions at the same time. Among them, 2 of them produce rubber cushions in small quantities and high prices. Only one factory produces rubber cushions all year round, with reasonable prices.

A core point is that the manufacturing process of the hot water bottle is similar to the production process of the rubber cushion, both of which use vulcanization equipment, and the rubber raw materials, formulations and rubber mixing processes are very similar. The difference is that the valve material used in the air cushion is copper. Compared with the screw stopper and filling aperture of the hot water bottle, these valves require a lot of time for pretreatment, including chrome plating, surface adhesive and drying.

Coupled with high-tech cushions of other materials, the number of rubber inflatable cushions circulating in the market began to gradually decrease, and the number of orders also decreased. Therefore, many hot water bottle factories do not produce rubber inflatable ring cushions, and the role of these hot water bottle factories gradually changes to middlemen. The existence of these middlemen directly increases the procurement cost of importers

C. The largest rubber ring factory went bankrupt in 2015. I call the factory owner A. A sold equipment, molds and other materials to B. Currently, A relies on resources accumulated in the industry for many years and still accepts orders, and B pays A a commission.

D. The quantity of purchases directly determines the local FOB cost handling fee.

We use hot selling 40cm medical rubber cushion make an example, assuming import 500pcs, 1000pcs, 1500pcs and 3500pcs respectively, let’s have a look local FOB cost handling fee. Use LCL method get cost.

40cm cushion carton size is 42x42x12cm, 20 pcs cushions /carton, 115/cbm, at least 3cbm for loading and unloading inside the terminal.

500pcs FOB local handling cost is 0.2473USD

1000pcs FOB local handling cost is 0.1484USD

1500pcs FOB local handling cost is 0.09891USD

3500pcs FOB local handling cost is 0.046USD

If other costs are included, the gap will grow wider

For importers, what needs to be considered is how to obtain the maximum support from suppliers under the small order mode. Second, maximize the scientific method of developing a quality supply chain and supplier comparison and evaluation.