A plastic ballpoint pen might sell for 1 dollar in your country, but in this small town in China, it’s just 5 cents. Such a small pen can be broken down into over a dozen components. How do factories sell them so cheaply and still make a profit? Today, we’ll explore a local ballpoint pen factory in the town.
Fenshui Town: The World's Pen Capital.
This ballpoint pen factory is located in Fenshui Town, Tonglu, China, known globally as a pen manufacturing hub. The town boasts 992 enterprises focused on pen and related accessory production, with an annual output of 18 billion pens, generating a total value of 1 billion dollars.
Here, from the elderly to children, almost everyone is skilled in assembling a pen. Even an 81-year-old grandmother, for example, can assemble pens for 8 hours a day. Many workers in the family workshops are over 80. They enjoy working and chatting with friends here more than staying home.
How Fenshui's Pen Industry Grew?
Fenshui Town’s pen making started in 1977. Villagers found that bamboo in the local mountain was ideal for making pen barrels. This was when China’s college entrance exams returned, leading to a higher demand for pens. They quickly seized the opportunity and set up the pen barrel factories.
By the 1980s, plastic pens became more popular. Fenshui started making these too. Although the profit per pen was small, the town gradually built a vast industrial chain through mass production. Now, there are specialized factories for every pen part, like springs, barrels, refills, tips, and assembly.
How Fenshui Makes Profit from 5-Cent Pens?
You might wonder how a factory can profit from selling pens at just 5 cents each. The factory owner explained that the production relies on automatic assembly lines, including machines for producing and inspecting pen refills and injection molding machines for various plastic parts. Each machine costs $30,000 to $40,000. And even surprisingly, each mold for a plastic part costs $10,000.
A full set of automated equipment is $150,000 in total, excluding $50,000 for molds for all plastic parts. Yet, the final product sells for only 5 cents. It sounds crazy. But the owner said that a set of equipment can produce 100,000 pens a day, valued at $5,000. So in just one month, the production can offset the full cost of the machinery.
The factory continuously accumulates profits from such small items through full automation. They can even invest millions of dollars in purchasing land, building large factories, and upgrading machinery to enhance their products. This factory can produce 300 million pens a year, and there are more than 50 similar factories in the town. Watch our TikTok video for a quick look at these factories.
Final Thoughts
Jingsourcing is a leading Chinese sourcing company that helps medium and small businesses import from China. In China, there are many small towns like Fenshui Town, where tens of thousands of people work in the same industry. But their production can account for over 50% of China’s and even the world’s. If you’d like to follow us to learn more, feel free to subscribe.
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What would it cost me to import these pens to South Africa, Johannesburg and still sell them at an affordable price. The economy here is under severe stress
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Very intriguing story. Interesting how a small thing like a pen, we sometimes take for granted actually generates so much revenue.