Coming up with a great idea for your new business is just the tip of the iceberg. The hard work begins when it’s time to turn your idea into a tangible product. For many businesses the only viable way to manufacture the product is to have it made in China. Follow our guide to find out how you can have your product manufactured in China in a high quality, cost effective way.
The process of designing a product, finding a manufacturer, sourcing multiple quotes then handling shipping and importing paperwork is complex and there are many ways to make mistakes along the way. That’s why Vara Allied does all of this for our clients, taking the time cost and risk out of the equation for them.
The Importance of Research
The first step in getting your products made in China is research.
Proper research could save you from making a big mistake and is the best way to set yourself up for success.
Research will help you find out if your idea:
- Is unique
- Solves a problem
- Has a big enough target market
- Has a wow factor
- Has current or potential competitors
- Has potential customers willing to buy and at what price
While researching, keep an open mind and try to be completely objective.
Remember, the purpose of research is to protect the future you from your current self! Look at your idea objectively and if, after thoroughly checking if it’s viable, it seems like you’re making a good business decision then you’re ready to get your product made.
How to Find a Manufacturer
If you can think of it, China can make it.
There’s a factory for every conceivable product, it’s just a matter of finding the right one which can be daunting.
A good place to start is a trade show. The biggest show in China is The Canton Fair, a mammoth three-week event. The Fair is a good way to discover potential suppliers then set up follow-up meetings with them.
If a visit to China isn’t possible or there aren’t any trade shows coming up, you can start your search online.
Most people start looking on Alibaba where there is a supplier for almost every product but it’s often not the best way to go in terms of price or quality. Try widening your internet search to other suppliers or dealing directly with a sourcing agent like Vara Allied.
Getting Manufacturing Quotes
One potential drawback of Chinese manufacturing is the high minimum order quantity (MOQ). Some factories will quote a MOQ but then negotiate down to a lower number.
Items with a small unit cost usually have larger minimum order quantities while manufacturers of higher-priced items will expect a smaller quantity. Don’t be tempted to order too much product that you can’t sell. Keep looking for a manufacturer who can supply the right number of high quality products at the right price.
What’s in a Quote?
The quoting process is a little more involved when you are manufacturing overseas compared to a factory in your home town. Manufacturers may quote for the cost of the product only and leave you to organise collection from the factory and onto the ship while others may quote on the product delivered to your preferred port.
Make sure you are comparing like-for-like quotes. Familiarise yourself with Incoterms and clarify anything you’re not sure of. Don’t assume anything and make sure everything is spelled out clearly in writing.
Design of the Product
Depending on the type of product, you may need a designer to turn your drawings into a sketch the factory can use. The document can be produced in Illustrator and shared as a PDF for you to make your changes. Use Photoshop or Skitch to make notes on the sketch. It will be far easier for your designer to interpret a picture than pages of notes if English is their second language. Show don’t tell is the secret to success when dealing with suppliers in China.
Once you are happy with the design, send it to one or more manufacturers to have a sample made. Once the sample arrives, be thorough looking over your product and communicating your changes. Use pictures with arrows and text overlays to explain what you want changed. Some people prefer to travel to China at this stage to complete the final sample but if you are doing it from Australia, you will need to be careful in your communications. Keep tweaking the product until you are happy before proceeding to production.
China is known for cheap (and often nasty) production. The only way you can place an order with confidence is to arrange samples or prototypes. You want to feel, see and test your product before proceeding with the full order. It can be a painful lesson to place an order and have it delivered incorrectly. The sample/prototype process can be slow and frustrating but it’s worth it.
Financing your Product
By now you need to back your idea with cold hard cash. Know how you will fund the design phase then manufacture, shipping, marketing etc. Some entrepreneurs can dip into their own savings, others will call on the generosity of family and friends but many others use Kickstarter and other capital raising websites to get their business off the ground.
Shipping your Product to Australia
Many entrepreneurs don’t understand how complicated importing can be. Once you have navigated your way through the quote to understand what the manufacturer will do and what you need to do, next you should think about documentation, customs duties, taxes and shipping freight. If it’s your first experience at importing or you import infrequently, you should take the recommendation of the Australian Border Patrol and ask an agent to handle it for you. If you make a mistake on the customs documentation, the additional costs can be significant.
As you can see, there are many steps to this process and many unknowns. Vara Allied has the experience, knowledge and connections with Chinese manufacturers to handle this entire process on behalf of our clients. If you need help with getting products made in China, call us on (08) 6161 8041 or contact us online.