China’s factories ran at record-high levels in the second quarter of 2021. High demand for Chinese exports in places like the US and Europe fueled this production.
Would you like to take advantage of the benefits a Chinese OEM manufacturer can bring your business, but you’re not sure where to start? Are you wondering how to choose an OEM manufacturer?
Learn more here about how to find the right OEM manufacturer for your products.
Why Use an OEM Manufacturer?
Many companies don’t have the resources for high-volume manufacturing or highly specialized products. You can outsource manufacturing to reduce costs and avoid the complexities of keeping production in-house.
An Original Equipment Manufacturer (OEM) makes the components for your product. You provide the design specifications for anything the OEM produces. You receive the parts and assemble them into the finished product with your trademark.
An OEM with experience making products similar to yours knows the product assembly process. They already have a supply chain in place. You can put this experience to work for you.
Domestic or Overseas Production?
Before you start looking for the right OEM manufacturer, you need to decide if you want to use a factory in the US or overseas. The best solution for your product manufacturing depends on your business priorities.
Pros and Cons of Domestic Manufacturing
Domestic manufacturing has some advantages. Using a factory in the US can give you more direct control over production. You can visit the site more regularly. You avoid dealing with tariffs and international shipping logistics.
American factories usually let you order small batches of a product. Overseas factories often have large minimum orders.
The main disadvantage of using an American factory is that you’ll almost always pay more. In addition, you may not be able to find a domestic manufacturer for some types of products.
Pros and Cons of Overseas Manufacturing
Using a factory overseas has several benefits. A factory in a country like China will almost always be cheaper than a factory in the US.
You have more options. The vast number of companies that have outsourced their manufacturing to China means that you’ll usually be able to find several sites with experience making your type of product.
Possible challenges include longer shipping times and handling import/export regulations. You’ll also need to navigate differences in business cultures. However, you can address many of the issues surrounding overseas production when you start vetting potential manufacturers.
Start Looking for a Chinese Manufacturing Plant
You can get suggestions for Chinese manufacturers you may want to use from many sources. Your industry trade association can give you potential names. The small business network for your industry is another resource.
You can also get recommendations from business contacts and networking groups.
International trade shows in the US that attract Chinese manufacturers are a good starting point as well. You can meet manufacturers and make connections with exhibitors selling products similar to yours.
Online directories of overseas manufacturers are a good resource. These sites include:
- Global Sources
- Global Sourcing Specialists
Searching by industry or product category can help you find manufacturers with expertise in your area.
Narrow Down Your Choices
You can use several factors to narrow down your list of potential manufacturing partners. One of the most important considerations is to find a factory that makes products similar to yours. Some manufacturers will offer to make anything, but the quality will likely be lower.
Look for online ratings and reviews to see what other buyers say about the manufacturer.
Finally, look for manufacturers that primarily export to the US and other western countries. These manufacturers already have experience complying with the necessary quality standards, product safety standards, labeling regulations, and packaging requirements. They’re more likely to have the international shipping logistics you need.
You can also look for a Wholly Foreign Owned Enterprise (WFOE). A WFOE manufacturer has its production facilities in China. However, the company has non-Chinese ownership and management.
Depending on its ownership, a WFOE will give you the quality and service western businesses expect.
Protect Your Intellectual Property
Protecting your intellectual property (IP) is critically important as you begin the process of outsourcing your manufacturing. Copyrights, trademarks, and patents are some tools you can use. Be sure your legal protections are designed for international situations.
A non-disclosure agreement (NDA) is a legally binding contract. It helps protect you against other companies copying your product. Before you start getting quotes from potential manufacturers, they should sign an NDA.
Questions to Ask a Potential OEM Manufacturer
Once you’ve narrowed down your list, it’s time to start asking some detailed questions. Ask about the labor practices of any factory you’re considering. Be sure to verify this information the best you can. Unsafe working conditions or abnormally low compensation for workers are at minimum a PR risk for you.
Ask to see a business license and documentation of the quality control system. Recent proof of inspections or third-party audits is also important. A reputable company will give you this information.
Other questions to ask include:
- What is your experience making this type of product?
- Who are some of your current clients?
- Do you do all the work in-house or subcontract to other factories?
- What is the minimum order size?
- How long will it take to make my order?
- What is the price for samples?
- What is the price for production?
- What are the payment terms?
With this information, you can choose two or three finalists and ask them to make a sample of your product. Comparing the results will show you which Chinese manufacturing plant you should use.
Choose Your OEM Manufacturer
The process for finding and evaluating an OEM manufacturer in China can seem overwhelming. Thorough research will help you find the best factory for your products.
Avoid the hassle and choose Shield Works for your product manufacturing. We’re a 100% British-owned WFOE. You get benefits like full IP protection, a live video stream from your manufacturing zone, and ISO standard quality control.
We also offer warehousing and logistics. Contact us today to find out how we can be your outsourcing solution.