If you just started a new business and want to create a product but have a limited budget, you may be considering sourcing to China using a low-cost manufacturer. In order to find a manufacturer, you need to do extensive research.
Finding and assessing a China manufacturer is becoming a necessary process for more and more companies worldwide, as increasing numbers of businesses choose to source products in China.
Here’s a guide of sources to help you find the right manufacturer.
- Your local industry trade association
- Recommendations from business contacts and online or offline networking groups
- Online directories of overseas manufacturers
- Your nearest Small Business Development Center (SBDC) or SCORE office
- International trade shows. While there are trade shows in China where you can meet manufacturers, a better place to start is attending U.S. trade shows that attract Chinese manufacturers. Trade Show News Network has global trade show listings. At the show, you can look for exhibitors selling products similar to yours and make connections.
After gathering enough information, it is understandable that you may have a long list of possible manufacturers, but you need to narrow it down and look for the following:
- Manufacturers that make products similar to yours. Ideally, you want a manufacturer that specializes in this type of product, as opposed to one that makes it as a sideline business. Some small Chinese manufacturers will offer to make just about anything—but that means quality may be poor.
- Ratings and reviews. Do Internet searches and look at online ratings and reviews to see what others are saying about the manufacturer.
- Manufacturers that do most of their exporting to the U.S. or other Western countries. These Chinese manufacturers will generally have higher quality standards, and have proven they are able to meet the expectations of Western importers in terms of compliance with product safety, labeling and packaging regulations. They’re also more likely to have experience with the logistics of shipping products internationally and a greater ability to get your products through the accompanying red tape.
- Honesty. Reputable Chinese manufacturers should be willing to provide you with their business license, documentation of their quality control system and any related certifications.
Come up with a shortlist of three to five possible Chinese manufacturers that you’re considering. Before proceeding any further, have them sign a nondisclosure agreement specifically for overseas manufacturers.
Don’t forget to ask questions to your prospective manufacturers. Once they have agreed to nondisclosure of your idea, your next step is getting a request for quotation (RFQ). Send them images of your product prototype with details such as what materials you want to use, the size of the product, and anything else they’ll need to know in order to make the item.
Be sure you get the same information from each Chinese manufacturer so you’re making a straight comparison of what they offer.
Once you’ve gotten the RFQ from several manufacturers, choose the ones you like best and ask for a sample of your product. It’s unusual that a manufacturer gets it right the first time; slight discrepancies in the sample and your prototype may be present. In order to attain the desired results of your sample, most likely you’ll need to have a few conversations to adjust the sample. This process also helps you and the manufacturer get comfortable with each other and feel that you can work as a team.
Unless you’re placing a very large, complicated order, it shouldn’t be necessary. If you’re at all concerned that the company is not legitimate, you can tell them that you will conduct a factory inspection before sealing the deal. Fraudulent companies will be scared off by this tactic, while legitimate ones will welcome it.
Of course, it’s also wise to do a background check on any company you’re seriously considering. This can include:
- Obtaining verification from a background check company that specializes in international business, such as GloBIS or China Checkup
- Asking for reference letters from the manufacturer’s bank
- Asking for references from current customers and contacting them
By doing your due diligence in this way, you greatly lessen the risk of running into problems, and increase your chances of a long and happy relationship with your Chinese manufacturer.
After confirming that a China manufacturer is legit, it’s highly advisable to visit their premises in person. If you really want to assure yourself that this manufacturer is capable of meeting your production standards and requirements, you need to show them you’re serious about your business. You can rapidly gain more than enough information about the company once you visit their site. Moreover, paying a visit to the factory in person demonstrates to the manufacturer that you really care about your company and about maintaining quality throughout the process.