When it comes to new product development, often the most challenging thing can be sourcing. From finding suppliers to getting production ready prototypes, it’s hard to do completely virtually.
That’s why numerous successful product entrepreneurs and past Kickstarters such as the Minaal travel bag guys and many others recommended boots on the ground business and building a base to speed the process and perfection of the product.
So in preparation for Shido Stand’s launch, the first laptop case that’s also a standing desk and to finalize pre-production prototypes for Kickstarter, I made the difficult decision to relocate to Hangzhou, China.
9 Necessary Tips for Startup Manufacturing and Moving to China
For those looking to launch manufacture, here are a few key takeaways and tips to success in China.
1. Source ahead of time
Prep work pays dividends here so start searching Alibaba well in advance. With the size and complexity of China’s thousands of available factories, it’s important to find the perfect partner for your product. That’s someone of similar size, experience and set that’s able to deliver for your company.
By beginning the search early you can narrow down lists of potential manufacturers, negotiate costs, solicit manufacturing feedback and even start sample production, all before arriving. Once ready to make the leap you will know where to live and how best to maximize your time efficiency working with your manufacturer and have a solid relationship already somewhat established.
2. Send samples to your manufacturer
Shipping samples, be it foam and fabric as in the case of Shido or whatever your physical product demands costs money. In Vietnam sample shipments from Chinese suppliers cost us an average of 30 USD a piece–the costs are even higher and waits longer for US shipments. In China our samples are often freighted free or several dollars max which with numerous suppliers can save important funds needed for product development and marketing.
3. English is extremely limited
Depending on where your manufacturer is located, you may be able to get by easily enough with English alone. In Hangzhou however, by no means a small city with close to 10 million people, fewer than 10% speak even passable English for basic questions. This adds enormous strain to a product entrepreneur in all areas of daily life and will reduce your efficiency while wishing to work. Add to that the challenge of written Chinese characters for signs and markings and even transportation becomes hard.
4. You will be treated differently as a foreigner
Your experience living and working in China will largely depend on where you’re located and what you do. Regardless though, expect the unexpected and take the good with the bad.
In the short time since I have been here I have had a little old lady rent a bike and bike over a kilometer to help me find the subway, people completely ignore my existence and even little boys on a bus laugh for a quarter hour straight from the funniness of seeing a “white boy.” Every day’s truly is an adventure.
5. Everything is negotiable
Outside of large retail shops, any and everything is negotiable. And you’ll be quoted higher prices because you’re a foreigner. Take this a challenge, a free reign to negotiate and haggle on everything from unit costs and sample times to knockoff Nikes and groceries.
6. Consider private labeling
One thing most entrepreneurs fail to realize is how willing factories are to private label existing products. When touring factories you’ll be amazed at the selection and diversity of products on display.
Factories showcase this success not only to inspire confidence and show a track record but to actively encourage private labeling. Anything that adds money to their bottomline without added hassles is on the table so see if other offering make sense and brainstorm follow up products.
7. Manufacturers want you to succeed
Factories see startups as a risk. You’re a gamble, an unproven entity but the potential of growing and scaling to meet your production costs is something most manufacturers are very keen to do. Knowing this, go into your manufacturer meetings with an open mind.
These production specialists have experience creating, design and producing products at scale and can often lend pricing saving and product improving suggestions if you ask for them. The more your company succeeds, the more business it brings to the factory so take notes.
8. Manufacturers want to take advantage of you
The flipside of this of course is that factories are ultimately looking out for their own interests. From private labeling your products, quoting unreasonably high estimates and even changing the prices, it’s important to always watch your back.
Due to the nature of supply chains and product manufacturing, it’s prudent to have a backup plan. Find other suppliers and manufacturers to provide a layer of protection to your business and pit prices against one-another to get the best deals.
9. Build a rock solid relationship
At the end of the day, your business is HIGHLY dependent upon your manufacturing partners. Win-win scenarios are best for both parties in the long run.
While in China or wherever your manufacturing takes you, remember business is built on relationships. Your suppliers and manufacturers can screw you or save you. Extra time on the line versus bumped to the back can make the difference in crunch time.