TMBA 236: Thoughts on Getting Your First Product Manufactured in China

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TMBA 236: Thoughts on Getting Your First Product Manufactured in China post image

 

Podcast | 23:45 | Download | Stitcher | iTunes

This week, one of our listeners challenged us to go more in-depth about Chinese manufacturing and how to get your first product manufactured. We’re gonna dive right in and talk about where and how you can learn about outsourcing your product to China, and everything that it entails.

Listen to this week’s show and learn:

  • Five things you should be focusing on when considering going to China.
  • Tactics to find and identify factories you can work with.
  • Why it’s important to scale with your factory.
  • How to differentiate between factories and agents and why it might behoove you to work with a Chinese agent.

People on this episode:

Mentioned in the episode:

Listening options:

 

Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST.

Cheers,

Dan & Ian

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Published on 03.20.14
  • http://www.buildmyonlinestore.com/ Terry Lin

    Yeah buddy! One thing to also note is how complex your product is, i.e. if there are suppliers of suppliers to worry about – had some convos with Jimmy/Doug and they’ve got 40+ moving parts on the bag so it’s a pain to manage!

  • http://www.TropicalMBA.com/ Ian

    Agreed Terry. Forgot to mention this. For most products you go with the factory that produces the main ‘ingredient’. From there they will generally source all of the other parts and materials. Sometimes they’ll ask you to source parts if they are just manufacturing a part and you are assembling at another factory. Ideally you’d want to find someone that can manage the entire process. Factories that manage the process along with all the other suppliers/ parts will often mark up up the parts/ services but will generally be cheaper then doing it yourself.

  • http://www.30footgorilla.com/ Shah Turner

    I’ve talked to my sister a lot about this topic, she spent 9 years in China overseeing production of high end women’s designer shoes ($US400+). One of the aspects of chinese manufacturing culture that the company she worked for leverages is that the chinese are master counterfeiters. Asking them to copy something is much easier than asking them to problem solve, especially with language differences. So rather than relying on the factory to develop their product from scratch according to provided specs, every shoe they produced was pre-crafted perfectly by the designer and shoemaker in Argentina, and then that actual finished product taken to the factory to copy every last stitch. This saves them a bunch of time and re-work. Depending on what you’re manufacturing of course, this approach is one people could adopt to iron out those early issues you were talking about – turn up to the factory with the exact thing you want them to make and go from there.

  • Cristina C. Ansbjerg

    Cool episode. Alibaba is the 21st century version of the old souks and bazaars. You will get lost (and possibly ripped off) unless you know a few tricks to navigate it. Thanks guys!

    Just a quick suggestion: Your listeners’ calls are usually not as clear as your voices. There’s a lot of noise in the background. For non-native English speakers is tough sometimes to get what they say. How about a short transcription on the show notes? It would be helpful.

  • http://www.chinabusinesscast.com/ JP

    Hey guys, great episode. I’ve gotta make a correction for you here though. Alibaba is HUGE. It owns Taobao, the EBay of China. It also owns Alipay, the PayPal of China.

    The IPO of Alibaba is expected to value the company at over $100 Billion, while Yahoo’s entire Market Cap is only $30+ Billion. (Yes, Yahoo does own some shares is Alibaba though)

    Here is a super interesting article about Alibaba in the Wallstreet Journal – “Alibaba Isn’t the Amazon of China”:
    http://blogs.wsj.com/digits/2013/10/16/alibaba-isnt-the-amazon-of-china/

  • http://www.tortugabackpacks.com/ Fred Perrotta

    After listening to the last episode, I was about to suggest an episode on sourcing. You read my mind, guys. Thanks for the insights.

  • http://www.tropicalmba.com/ Dan Andrews

    Cheers Fred glad you dug it! Thank you for listening.

  • http://www.tropicalmba.com/ Dan Andrews

    Oh sweet thanks for that correction JP, i should probably not spit stuff out like this on the fly. It’s always nice when smart people listen to your show! Appreciate the link as well.

  • http://www.tropicalmba.com/ Dan Andrews

    haha… hey Cristina, yeah that Kall8 call in service kinda sucks. We’ll look into an improvement as well as we have a quote request out to add transcripts to the show because so many people have been asking.

  • http://www.tropicalmba.com/ Dan Andrews

    hey Shah this is a great point and something we try to take advantage of as well… even with things like web design I find I get such better results to providing a real example and pointing out the changes rather than coming up with a general spec request.

  • http://www.tropicalmba.com/ Dan Andrews

    Agreed there!! Managing your own assembly is low margin and no fun.

  • Andrew Reagan

    Hey Guys – great stuff, awesome episode. I’ve got prototypes on the way from China right now. Any negotiating ideas on reducing MOQ for product development?

    You mention the Jerry Maguire-esque “Help Me Help You” approach if the plant is the similar in size to you in the episode, and I assume paying more per unit would work as well. Any other ideas?

  • http://www.tropicalmba.com/ Dan Andrews

    Come up with a legit reason for needing a “sample production run.” Retailers need copies, sales force need samples to show retailers, etc etc. Also consider if it’s even a real possibility that they can do small quantities– pricing could depend on quantity (depends on tooling etc). You could break out tooling and pay that separately if you want to keep transparency in the small run pricing. The other options is to be honest and say the first 100 units is a test. If you can sell x target you agree to order in x size going forward.

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