Doing business in China can be very rewarding, but before you dive in you need to know what pitfalls to avoid.
If you don’t do your homework, finding a reliable manufacturer to develop your products can be costly and time-consuming.
One of the most important things to remember when working with a contract manufacturer in China is that you want to work with someone who has been vetted and who has a good reputation.
To do this, it’s best to ask these five questions before signing any agreements or making any deposits. Let’s keep reading.
1. What Services Do They Provide?
Since you have no prior experience with manufacturing overseas, you may be limited when it comes to understanding the services your manufacturing partner might offer.
So the first question you have to ask your prospective contract manufacturers in China is: what services do they provide?
As you may know, not every manufacturing company is built in the same way.
Some companies offer a one-stop solution while others may be an expert in a certain part of the industry with high-quality assurance.
Therefore, knowing what each manufacturer specializes in will help you choose the best one that provides you with all of your requirements for success.
2. How Much Experience Do They Have?
If you have an idea of what exactly your product should be, like size, functions, and main materials, you need to find someone who can make your product with relative experience.
Experience is what matters the most when selecting a dependable manufacturer in China.
There are hundreds of thousands of manufacturing suppliers on Alibaba, however, it can be difficult to verify them online.
Everyone seems to say that they know how to solve your problems.
But you have no way of knowing whether or not they are managing a proper facility for producing your desired goods.
Therefore, based on their work experience, they can prove themselves as capable of working effectively with others who share the same needs.
3. How Big Is The Facility?
Knowing the size of their facilities will provide you insight into if they have enough capacity to handle your project.
Sometimes, you may consider using a smaller factory in hopes that they would be easier to deal with and they would pay more attention to your products.
This can be a wrong decision for you to make.
Because if the factory is too small, you may find yourself waiting for one of their existing customers to finish production so you can get started.
Avoid a new or small factory. More often than not, these factories have only been around for a short period of time and they lack the equipment and skilled employees a more established factory should have.
It’s also helpful to ask about the number of employees and departments available.
Keep in mind that if a company has many employees, then it means their facility is larger (thus with more space) and they’ve been around longer, which means they’ve had time to learn from past mistakes and refine techniques – putting them ahead of newer competitors in terms of experience.
4. What Is Their Production Capacity?
It is essential that you find out what their production capacity is.
That’s because production capacity is an integral part of your future success.
You may have been working with a specific manufacturer for years but now you decide to switch over to someone new or you’re just getting started working with this manufacturing company, but it doesn’t matter.
Because either way, you’re looking forward to introducing your product to the marketplace.
You do not want to wait weeks or even months for your product because your suppliers have too many other clients on the way.
It would be best if you find out how fast their production process goes because this will give you an estimate of when you can expect to receive what you ordered.
5. What Quality Assurance Steps Do They Take?
Quality assurance is just as important as choosing a qualified manufacturer.
Several factories in China seem to believe in their quality control process.
However, bad things happen all the time.
If you don’t want to end up with shoddy products or a nonresponsive vendor, check out what other customers have said about them online.
A reliable manufacturer should have a list of case studies or testimonials shown on their homepages. Pay attention to the details of this information. You may later find yourself avoiding a lot of trouble by doing so.
In addition, keep in mind that the more quality assurance steps the manufacturer will take, the lower the risk of defective products and components you will receive.
Typically, there are three quality control services in the industry:
- Pre-Production Inspections
- In-Process QC Inspections
- Container Loading Inspections
In this case, make sure you understand the differences between each product inspection and how your manufacturer conducts the QC process.
Need Professional Help With Your Manufacturing Project?
Don’t be afraid to ask questions. Doing the proper research before making a decision can help you avoid trouble.
If you’re looking for a professional contract manufacturer in China to work with, come to Shield Works.
Our expert team will do everything they can to make sure your project moves smoothly and efficiently. We are well-trained and have been working in this industry for many years – so no matter what you need to be done, we’ll figure it out for you.
With our British ownership and management background combined with manufacturing know-how, we take pride in keeping quality at the forefront of every job – so there won’t be any need to worry about defective products. Contact us to discuss your project today!
Do you have a new product that you want to sell for your company, but you are unsure what type of manufacturer to use? Have you decided to use a manufacturer in China, but you aren’t sure what type of manufacturers are available? Most people don’t know that there are OEM manufacturers in China in addition to ODM manufacturers.
So what is the difference between the two? We will give you a hint; one provides more protection and more specification help than the other. They are both excellent options to bring your products to the market, but you should be aware of a few other key differences. This brief manufacturing guide will cover the difference between the two and who you can contact for more information.
What is OEM Manufacturing?
Before we get into what OEM Manufacturing is, we must first define what OEM is. OEM stands for Original Equipment Manufacturing, and it is a form of outsourced manufacturing. OEM factories have the capabilities to manufacture products according to your unique specifications and designs.
Before an OEM manufacturer can produce your product, you must complete your research and development. This includes engineering, market research, and design.
Once you have all the components of your product down in writing, you can then reach out to an OEM manufacturer to create your products in bulk. The original equipment manufacturer will set up the production of your product to make sure that they can produce the product on time, on quality, at your designated budget.
Advantages of OEM Manufacturing
One of the most significant advantages of OEM is the fact that you have complete control over your intellectual property. This is a huge deal, especially if you have a breakthrough project and you choose to ship your production services overseas.
When you control the research and development of your product, you have complete control over your intellectual property. This gives you better bargaining position and makes it easier to switch to another supplier if you need to. Even though you have full control of your intellectual property, it is best to protect it at all costs.
If you don’t have the right expertise or equipment to create certain parts of your product, you can depend on your OEM to have it for you. It is best to take advantage of the technology offered by your OEM manufacturer to complete your project. Access to this type of technology and expertise ensures that the manufacturer will create your product with top-tier quality.
When you partner with OEM manufacturers in China, they can streamline the process of creating your product in large volumes. China is also well known for its efficient supply chains, making it cheaper to produce your product. This provides your business with higher profit margins, more revenue, and increased sales.
Disadvantages of OEM Manufacturing
One main disadvantage of using OEM manufacturing is a limited selection of suppliers for certain specialized items. Most OEM manufacturing companies prefer to work with businesses that create a lot of demand, so if you don’t sell your goods fast, they most likely won’t work with you.
Risk of Infringement
Because you are sending your items to a company to create your product, there is a risk of infringement. It is important to note that every country has its own rules and regulations for intellectual property. If you aren’t diligent in protecting your product, you risk someone selling your components to your top competitors.
Once you have your specifications down and send it over to the manufacturer, they will create your product based on what you send. This means that they won’t troubleshoot or correct any faulty designs as they produce your items. They will only manufacture based on what they have from you.
What is ODM?
Original Design Manufacturing, also known as ODM, is another form of manufacturing. Unlike OEMs, ODMs provide product development services, and depending on the company; they can help you with the entire product lifecycle. The exact scope of what an original design manufacturing company can do differs from company to company.
Let’s say that your company has an excellent idea for a gaming console. You did your market research and found an opportunity to create a low-priced gaming console of decent quality in China.
You and your team will need to develop some features you want the console to have, but you don’t necessarily have any specifications or technical drawings. If you want a gaming system that meets your requirements, you can reach out to an ODM to fulfill what you need.
Your ODM company can help you create specifications and new designs based on your idea. The ODM may already have its own product lines that you can customize if you would like.
Advantages of ODM
One significant advantage of using original design manufacturing companies is that you don’t have to make substantial upfront investments. You won’t have to pay for any tooling; the ODM will take care of that.
With an ODM, you don’t need technical resources that provide detailed specifications and designs. Instead, the ODM will handle all of that for you. Many Amazon FBA sellers prefer to use ODMs to create and sell their products quickly.
ODM companies don’t worry about testing, developing, or researching a product. They usually have already created products that they can rebrand for your business. To ensure you don’t run into issues with another company claiming that you copied their idea, the ODM will handle making sure the product uniquely links to your company.
Least Expensive Manufacturing Route
Testing and designing a product takes a lot of time and requires a decent amount of capital. When you partner with an ODM manufacturer, you have the opportunity to save money while you focus on the core aspect of your business.
Depending on your product, certification is typically required before your product can hit the market. To ensure that your product meets quality requirements, ODM manufacturers will handle all quality testing and inspections. They will also get the proper product certificates you need before selling your product.
Disadvantages of ODM
Although these manufacturers provide you with a quick and easy way to create a product for your business, working with them can make it harder to stand out from the competition. Your manufacturer will sell the exact product you create to other companies with minor alterations.
Even if you manage to make significant sales volumes, your ODM most likely won’t honor your changes if your customers request customizations or upgrades. Most manufacturers don’t develop new products, especially if a specific product requires a full or a partial redesign.
No Intellectual Property Rights
Because your manufacturer designed, tested, and developed these products, they own the item’s intellectual properties. This means that you have no control over the ODM’s legal decisions about the product.
You also have no control over who the supplier sells the item to. There is a chance they could sell your product to another competitor.
There is also a chance that the item you buy from your ODM could be another company’s intellectual property. If you are unaware of this and you sell your product on the market, you’re at a risk of facing a lawsuit.
How to Find an OEM or ODM Manufacturer in China
Choosing an OEM manufacturer in China can be an overwhelming experience. There are hundreds, if not thousands, of manufacturers in China who can help bring your product to life.
The best way to find the proper manufacturer for you is to look up some and make a list of those you like best. There are certain companies that have high-quality components, quick turnarounds, and high customer service ratings.
Shortlist Your Companies
Once you have a list of companies you may want to work with, it would be best to shortlist them. Look over each company’s length of time in business and see if they specialize in the component you need.
Other essential details to look over:
- Certifications the company has for their production capability
- Business licenses
- If the company has already exported products to the United States
- Their minimum order quantity (MOQ)
If you like a company but have questions about its qualifications, check out its reviews. Most previous clients will rate the company and put what they did or did not like about them. The best way to find out if they have what you need is to contact them.
Review Their Credentials
Even if a company tells you that they have the right qualifications, it is better to verify those credentials to ensure that they are actually a legitimate company and not a middleman. There are many ways to verify this information.
For one, you can ask the company for their audited accounts, ask for product samples, or you can check their Value Added Tax Invoice. You can also ask for the Chinese name of the factory, the location of the factory, and the local government office assigned to the factory. The government office should have a copy of the factory’s registration and license records which you can use to verify their details.
Unlike the United States, there are many countries that do not have protocols in place to protect their workers. This means that some workers may not receive adequate breaks or time to get food. Some of these people work for more than eight to twelve hours a day without reasonable pay.
When sourcing the proper manufacturer for your company, make sure that you work with an ethical company. The last thing you want to do is partner with a company that does not care about its employees. Don’t spare efforts on researching their track records.
Hiring a Sourcing Agent
The most significant advantage of hiring a sourcing agent is that they can verify and identify different manufacturers on your behalf. These people have extensive networks of partners and in-depth knowledge of the sourcing market.
There are many companies that have sourcing agents on staff who can serve as the liaison between you and their manufacturer. They are able to speak to you in your native language while being able to translate for their company.
Visit the Manufacturers
If you aren’t able to visit the manufacturers yourself, you can use a sourcing agent to do that on your behalf. If you can take a trip out to China, you should go to check out the different available manufacturers.
When you go in person, you can see the facility first-hand and meet with key personnel at the manufacturing facility. While you are there, you can better explain the specifications of your product and if they can handle that for you. Visiting in person also lets the manufacturer know that you are serious about working with them to create your product.
Build Your Product With Confidence
There are many different ODM and OEM manufacturers in China that can bring your ideas to life, but which of the two is the better option for you? Choosing the proper manufacturer for your business needs shouldn’t be a complicated process, and that is what we are here for.
If you need help deciding between the two or if you are set on working with an OEM manufacturer in China, contact us now. Our team is fully prepared to answer any questions or concerns you have about our process!
It is not surprising that China has developed to become a major manufacturing superpower and more and more overseas companies have moved their production to China. However, some of them are having issues with IP protection while manufacturing in China.
If you are planning to manufacture your products in China, make sure you do everything possible to protect your intellectual property rights. Read on to learn more about the strategies you can use to avoid patent infringement issues in the Chinese market.
What Is IP?
Before you outsource your production to China, it is important to understand what happens to your intellectual property rights (IPR) once you outsource to a Chinese manufacturer.
Intellectual property is a broad term that can include anything from a new fashion trend to a specific software algorithm to an entirely new product design.
The World Intellectual Property Organization (WIPO) makes a definition of IP as “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.”
No matter what type of intellectual property you have, there are some things you should know before starting manufacturing in China to ensure your intellectual property rights are protected.
Each Country Has Its IP Laws
Whether you are a small business or a large corporation, you have to consider how you’ll protect your intellectual property.
The first thing you should do is have a basic understanding of Chinese IP laws.
For example, patents for inventions can be protected for up to 20 years in China. Also, China protects utility models (for up to 10 years) and design patents (for up to 15 years). Utility models are sometimes called “mini-patents” and require a lower level of inventiveness. Design patents protect the look of products.
All patent rights in China are subject to the payment of annual fees after they’ve been granted.
The National IPR Organizations You Should Know In China
In China, the government plays a substantial role in promoting and protecting intellectual property rights (IPRs).
Several governmental departments are responsible for IPRs matters. Keep in mind the differences and functions of these organizations.
China National Intellectual Property Administration (CNIPA)
China National Intellectual Property Administration (CNIPA) was formerly known as the State Intellectual Property Office (SIPO). It was renamed in 1980.
The department is responsible for the patent work and comprehensively coordinating the foreign-related affairs in the field of intellectual property throughout the country.
If you want your patent registered in China, make sure you check these common questions that you will need to know:
Trademark Office of China National Intellectual Property Administration
When it comes to handling matters of trademark disputes, you should reach the Trademark Office of the China National Intellectual Property Administration.
It’s responsible for the registration and administration of trademarks throughout the country.
However, the website does not provide an English option, so it would be hard for foreigners to research and apply for a trademark online. Therefore, you can click on the CNIPA website to search for trademark-related information. Or you may go to the local trademark office to make an enquiry in person.
National Copyright Administration of the People’s Republic of China (NCAC)
If you want any copyright information, the National Copyright Administration of the People’s Republic of China website is a good option for you.
It accepts and examines copyrights applications in accordance with the law.
Keep in mind to check the copyright regulations and laws in China before you register your copyright.
IP Protection Agreement
When partnering with a manufacturing company, make sure you have a well-drafted and properly executed manufacturing agreement that will help you protect your IP, and provide you with relief if the manufacturer breaches the agreement.
The IP agreement should list all relevant details, including IP ownership, confidentiality, non-competition and non-circumvention and more.
Let Shield Works Be Your IP Protective Manufacturing Partner
With our British ownership background, we know how to help our overseas clients to protect their IPs without excessive costs and time.
Shield Works partners with Innopat a leading Zhuhai based IP industry expert to provide you with clear no-nonsense advice and IP protection services.
Our IP protective system safeguards your production line in our innovative facility.
We are ready to accommodate your needs. Contact us today.