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 What Are the Steps?

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PostSubject: What Are the Steps?   Thu Dec 31, 2009 5:23 pm

I had an interesting Question today from a member ...

How does one get set up in China for manufacturing?

Starting with a prototype and ending with the final product sales...what are the basic steps in between?

thanks! Very Happy
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PostSubject: Re: What Are the Steps?   Fri Jan 01, 2010 2:09 pm

That is an interesting question – to answer it you have to really know a little about the Asian way of doing business. In most Asian countries business with factories is often done through brokers. In fact, in some Asian countries it’s the law that a foreign company must use a broker when dealing with export products. In China it’s not the law, but it is the custom and encouraged by the factories.

The second thing you need to understand is “Brokers” come in many flavors. You have companies that have been doing it for many years; you have people that use the internet to advertise their services as brokers - Some legitimate and some just people who know a real broker and want to tack on some points for themselves as a middle man….you have the Americans living in china who really do work with brokers to facilitate US products, and lastly you have the Americans living here who know a broker or an American living in China and are making the same phone calls you could make but they convince you that only they could get you to the right person. The one thing they have in common is the relationship to you the inventor. They know far more than you do about how this is done and they are normally not afraid to take advantage of that. Keep in mind; reputable brokers are normally established companies who have been around for a long time. They have long standing factory relationships, they have staff, and they have full banking and import capabilities. They also make money off volume (a broker normally tacks on about 18% to the factory cost on the final manufacturing) so if you are some person in your basement without the full setup behind you to get your product to the market they may not give you much time or help. The ones who know you are a “Basement Betty” (a term of love sometimes used to describe home inventors by manufacturers …don’t take it personally….we all start out that way)and want to "run" with your invention are often not the people who could get full manufacturing and import done if/when you do build distribution.

With this in mind, let’s explore the process a little.

First, you have an idea – it’s a “great” idea and we’ll assume that you have lined your planets up correctly (see steps to inventing a retail product) and it can actually be made at what you believe is a cost in line with selling it to the consumer. Somewhere in that process you made a prototype of some sort that proves your working hypothesis and shows the functionality of your concept. At this point you have acquired, either through your own research or by asking someone who knows, the knowledge of basic materials and manufacturing processes needed to make your product.
You contact a “Broker” you found on the internet or in a phone book and he enthusiastically agrees to make you some samples. This is where we learn a little more about the China manufacturing process. As wonderful a people as the Chinese are, they are at their core “Copy Artists”. That is, they have a million ways to copy an item or a material, but they fall far short of being able to start from zero on a product for the US consumer. That being said, the prototype you made and the research you have done on materials and manufacturing processes is what you will need to guide them through the process of professionally materializing your vision.

So, you send it over to this “broker” (to be truthful I don’t know the best way to find a new broker since I have worked with the same set of brokerage firms for many years now I have not had the occasion to look for a new broker…but keep in mind the flavors of brokers as you search and ask them a lot of questions) The broker will then shop it to the factory they feel will do the best job copying your idea and work with that factory (The shorthand for correspondence is normally “FTY” ) on what are called manufacturing samples. This process normally takes about 6 to 8 months if you start with a very well done prototype and the product is not overly complicated. Throughout this process you will need to make sure China has the following items.

Functional prototype (often called a “Looks Like/Works Like” Model)
Individual parts of each part of your product (they will need these to copy)
Artwork for the item
Package design and artwork

In the end you should/could end up with the version of your product that is exactly what you wanted….or not. It really depends on how much work you do before you get China involved - Which brings me to my last point.

WHY? Why on earth would you want to go through that trouble, the expense, and the hassle if you did not have a DISTRIBUTION PLAN in place?....that’s just stupid. You can do all this work, spend your last dollar (or even worse borrow money) and end up with a single manufacturing copy, or a garage full of product and no place to sell them. It’s like running a marathon and not knowing exactly where the finish line is. Sure, you lose weight, you get exercise, but without a map to the finish line you can never finish the race…..so why enter?

I’ve spent some time here giving you a glimpse into the world of China manufacturing – before you run off to FedEx - PLEASE spend some time understanding and planning for distribution.
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PostSubject: Re: What Are the Steps?   Fri Jan 01, 2010 3:35 pm

Thanks Very Happy
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