Approaching Chinese Manufacturers

Approaching Chinese Manufacturers

Discover safe and efficient ways on how to set up production in China from Greg Fisher, Founder of Hardware Massive and Berkeley Sourcing Group. During this event, Greg talked about factory interests, prototyping strategy, intellectual property (IP) guidelines, manufacturing requirements, and packaging tips. 

Working with Factories in China

If you are going to go direct, these are the two websites you need to know:                               Alibaba.com                 
               Globalsources.com

Factories: What are their interests?

  • Keep the machines running. This is how they make money. When not running, no money is being made.
  • Large orders.
  • Scaling business. Without a large order, a startup must convince them of their ability to be successful.
  • Low deficit rates. Looking for parts that are easily re-producible.
  • Clear communication of requirements. They want to avoid complications both during and post-production, so be clear in what you need.
  • Low touch from upper management. Higher-ups rely on lower level employees to keep the production process running smooth.

What are factories NOT interested in?

  • Development/Prototyping
  • Troubleshooting
  • Lots of extra communication
  • Small orders
  • Slow growth

Remember, as much as you can, make their lives as easy as possible. In most cases, they will lose money on your first order. They consider it a marketing expense but are still taking a chance on you.

Lead Time 

In a perfect world, production will take about 7 months from the time our engineering package is complete. To be safe, estimate approximately 2-3 additional months on your timeline to cover any issues that may, and most likely, will arise.


Prototyping Strategy 

Here are some tricks and tips to control your IP in China:

  • Make sure you pay for your design services and it is clear you own the designs. Pay for 50% up front and the final 50% after you have received all files and confirm they are accurate.
  • Have a mold contract in place. Make sure it is written in Chinese and executed in China.
  • Protect yourself in the countries you will sell to.
  • Put your logo in the tool and register a trademark in China. This will prevent a factory from directly copying your product.
  • Seal the tool with your signature. Using tape, sign the tool. This will make it difficult to copy.
  • Remember, your Chinese factory is likely your least competitive competition. If your product is easy to copy, much bigger fish will take the bait.
  • Have a global IP/business strategy.

Things to Watch Out For

  • Don’t overestimate the factory’s interest in your product. Remember, they are probably losing money on your first order. They are doing a lot of work – appreciate it.
  • Don’t leave any detail unaccounted for. Don’t take “yes” at face value. Make sure you get into the deepest of details regarding production when working with a factory.
  • Don’t go with the lowest price. Often, the lowest price offer is to get you in the door and get you hooked. Later on, the factory can raise the price and it is often too difficult and expensive to switch factories.
  • Go yourself, or have a trusted third party do outgoing product control before the product is shipped. If not, any issues will cost significant time, money, and your reputation will take a hit.

 

Getting to Manufacturing

  • BOM (Bill of Materials). List out each component of the product. This will help keep track of manufacturing process and with pricing accountability.
  • PRD (Product Requirements Document). A document that explains all of the important details of a product and it’s function. This is key to manufacturing.
  • Technical files. CAD, Gerber…this is where you have the heart of the product.
  • Improved design for manufacturing. Outside of the lab is where design improvements are most often identified.
  • Quality Control. Take all of the above information and figure out how to measure them.
    • Inspection guidelines.
    • Inspection criteria
    • Incoming, In-process, outgoing/final

 

Packaging Tips

  • Expect it to cost 10% of manufactured costs.
  • Takes time – start early!
  • Onboxing is an important user-experience.
  • Lots of options and lots of details to consider.

About The Speaker

Greg Fisher

Greg Fisher

Founder & CEO of BSG

Greg Fisher is all about hardware innovation. As founder/CEO of Berkeley Sourcing Group, Greg has spent the last 14 years working with over 1000 hardware startups to develop and manufacture innovative products. Living in China 1/3rd of that time, he worked with hardware startups and factories to help improve their designs for manufacturing, quality and select factories, manage factory negotiations and relationships, and develop and implement quality control processes. With this history, Greg has a unique perspective and immense passion for what it takes for hardware startups to build the right foundation and scale their operations.

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