You have done much research on your invention, and have decided not to go the licensing route. You want to manufacture on your own, and have heard nowadays, that China is the location to look into. It is highly recommended that you seek assistance from an international trade consultant, or an inventor who has imported in the past - and even better - who might provide a referral of a prospective China factory for you to contact. However, before you begin the sourcing process, below are ten important issues to consider:

1) Can you provide references of USA buyers who have purchased from your company?
Many Asian suppliers will claim (sometimes for their convenience – they can’t be bothered, they’re too busy) that they do not want to violate confidentiality. But if they are working with big USA companies (read: Walmart, Home Depot, etc.), then you most definitely want to know this! This is a good thing. A sign of a capable, confident source is if they volunteer the names of recognizable USA companies they have manufactured for. Besides, just by giving a business partner’s name, it does not reveal any product details.

If they do not want to give you the names of USA buyers, then be persistent and ask them for some USA brand names (i.e., Disney, Liz Claiborne, America’s Pride) of products that you might recognize in retail shops. This obviously does not create a confidentiality issue because the products are already out there!

If they cannot give you either references and/or USA brand names, don't waste your time dealing with them. Go with someone who has a proven track record.

2) Can you provide recommendations of proposed alternate materials?
For example, your prototype is made of leather, but you are seeking a less expensive, but attractive alternative. Will they offer you samples of other fabrics (canvas, nylon, polyester)? This will help determine their eagerness to please and their problem-solving skills, which are very important with a foreign supplier.

3) Can you please give me a list of holidays when your factory will be closed for the current year?
This is very important, because China factories have many holidays where they are closed and therefore your production (and other product development stages) comes to a halt for as many as two to three weeks, especially during Chinese New Year, typically at the end of January / early February. This way, you can adjust your schedules accordingly.

4) What is your delivery lead time?
In other words, from the time we approve both the pre-production and mass-production samples, how much longer will your factory require before my order is placed on a vessel (or air cargo)?

5) What policies do you have in place for replacement of defective merchandise?
I normally write a stipulation in all my purchase orders that clearly spells out how the supplier will replace any defective items, beyond the typical industry standard, indicating that they (the seller) will be responsible for not only replacing the defective product, but also for arranging for the collection, and return shipment of those items as well.

6) Do you work with a China freight forwarder who could arrange our shipment? For many small initial orders, it can be easier and more economical for the supplier to arrange for the ocean freight and marine insurance to be prepaid, and coordinated by their appointed freight forwarder at the port in China. Also, sometimes the factories get cheaper freight rates than if arranged in the USA. Your unit cost will increase by a few cents, but it will be worth not having to deal with steamship companies for quotes, making the arrangements with not-so-reliable trucking firms in China, inferior roads and transportation systems within China, and so on.

7) What are your MOQs (minimum order quantities)?
This one is a biggie! If you are only in the position, as most start-ups are, to purchase a small number of pieces to begin with, you must state this up-front. Many Asian firms – especially the larger ones – will assume you are interested in purchasing their “typical” MOQs from the start. These “typical” MOQs can be upwards of 50,000 – 100,000 pcs.! So, if you only want to buy 1000 to “test the (market) waters,” that should be the very first subject you discuss. You don’t want to get too far along with prototypes, counter-samples, and so on, only to lead the source on, thinking you will buy these huge quantities, and then he/she will quote you a price break, for 50,000 – 100,000 – 250,000 pcs.! You can certainly volunteer that you will only be buying a small quantity to begin with, but if your product sells well, you will be back to them in the future for a quote for larger quantities.

8) Are you willing to cooperate with the Asian affiliate of our appointed independent safety / testing lab?
The answer for this one should be obvious: if they say no, or are non-committal, run for the hills. If your invention is an item with possible safety issues (for product liability insurance purposes), you will NEED to have production testing done. Your mission is to make sure your new product never appears on the Consumer Product Safety Commission’s (www.cpsc.gov) Recall List. You can literally “lose you shirt” if this happens.

9) Do you work with a translator?
You can almost always expect a small communication problem, which is why I recommend working with an international trade consultant or another inventor who has imported from China before, because “Chinese-English” terms are frequently very different from “American-English” terms. Your supplier’s command of the English language should be a very strong factor in your ease of building a business relationship. But if you find you are having too much difficulty, you can ask your prospective supplier to find a translator – or better yet, have the document and/or specifications translated into Chinese BEFORE you send it. It may cost a couple hundred dollars, but it will save time and money in the long run.

10) How do you find an international trade consultant?
Although this is not exactly a question to ask of a prospective China manufacturer, it is most definitely one you should consider on your own, especially if you are overwhelmed after reading the above nine questions! I would first recommend reading the classified ads in Inventors' Digest magazine, whether via hard copy or online at www.inventorsdigest.com. Look under "(Honest) Help for Inventors." You can also contact the United Inventors Association: www.uiausa.org, or look under "Services Connection Page" at the website.

There are also a few important trade organizations to consider: First, the Federation of International Trade Associations (www.fita.org) is a good place to start. And, you may contact the The National Customs Brokers & Forwarders Association of America, Inc. at: www.ncbfaa.org. Although you may not need a Customs Broker or Freight Forwarder immediately, many customs brokerage firms employ international trade consultants or may be able to recommend one. Last, if your invention is a textile or sewn item, bag, baby accessory or fashion item, you may contact me, Edie Tolchin, at EGT@warwick.net.

Edith G. Tolchin – “The Sourcing Lady”(SM) – specializes in inventions of textiles and sewn-items, baby & fashion accessories, arts & crafts, and unique household articles. She possesses over thirty years of experience in cost-cutting solutions for International Trade and Shipping. She gladly arranges seminars and speaking engagements on the topics of “Importing A to Z”™ and “Offshore Manufacturing for Inventors”™. Ms. Tolchin also holds a U.S. Customs Broker License. Contact her by e-mail at EGT@warwick.net or visit
www.hometown.aol.com/egtglobaltrading

*Reprinted from Inventors Digest with permission
of the author, Edie Tolchin.