Go It Alone: How To Make Your Stuff In China (Part 1)
Note to Readers: This post was originally written on Saturday, February 27th, 2010. It appeared on CrunchGear.com on April 4, 2010.
It’s Saturday morning at 6am. I’m about to leave my Boston apartment for the first of three legs from Logan International Airport to Hong Kong via New York and Tokyo. I will arrive at 10:30pm on Sunday. Against insurmountable odds it appears that both my Boston and New York flights are on-time – an anomaly if there ever was one given that we’ve had a full week of driving rain inBoston and two feet of snow in Westchester County, just 45 minutes north of New York City where my parents told me they’ve had to sleep at a friend’s place because they’ve been without power for days. Still, never to disappoint, and despite clear sunny skies, my commuter flight from Boston to New York is delayed almost two hours on account of “missing personnel”. This conjures up images of airline top brass scrambling around to replace the guy who’s responsible for loading the salty snacks on the plane (as if) when the gate agent clarifies that our secondary officer is on his way from another city. Or maybe he overslept. Fortunately, having learned my lesson just months ago when traveling to a trade event in Las Vegas (my luggage was lost, never to be recovered to this day!) I seemingly accurately surmised that the chances of my checked baggage successfully navigating three airplanes and two carriers would be slim-to-none. As such, I had packed light. My fiancé made me pack two pair of pants, which I felt to be overkill, but I have a feeling I’ll thank her later.
So if you think you can’t fit a week’s worth of clothing into 75% of a roller carrier-on, then you’d be wrong. The other 25% of my bag is filled with a menagerie of loose electronic components, busted circuit boards from my company’s products that I want to return to the factory for analysis and a dozen rare, Russian-made numeric display components called Nixie tubes which are to be part of a forthcoming American Innovative product. As I remove my shoes for the usual TSA security dance I muse about the fact that I still have to unpack my laptop but the Kindle, iPod, BlackBerry and myriad of electronic components I’ve just described do not need to be unpacked. However, TSA has the last laugh when they flag the Nixie tubes as suspicious looking and pull me and my bag aside for further investigation. I am secretly pleased that TSA seems to be doing their job and then momentarily scared as the agent swabs down my box of gadgetry for a scan. The Nixie tubes I have on me are what are known as NOS (New Old Stock). In this case, this means that these tubes were made in communist Russia some fifty years ago although they were never installed. Who knows what else they were making. Still, I breathe a sigh of relief as I pass the scan and am freed to go.
It wasn’t the threat of a 10-hour interrogation that was making me nervous but the specter of not arriving in China at the appointed time which begins a meticulously planned five days of meetings and transportation, all arranged in advance with business contacts old and new, and long before my journey ever began. Where I’m going in China, you don’t go as a tourist. The industrial zone is not a pretty place. You can’t rent a car, even if you wanted to. There is no public transportation. Pick-ups and drop-offs are pre-arranged with factories. The good news is that the factories love when I visit or, for that matter, when any Westerner visits. There’s a certain hospitality that can be found doing business in China that doesn’t exist to such a great extent in the United States. They book the hotels for me, all meals are provided. They roll out the proverbial red carpet when I visit, which is nice.
The best way to source a factory in China is to go there. For every would-be product entrepreneur whose wind I just took from your sails … relax. In fact, that is not the way that I sourced the first three factories that I ever worked with and I still work with each of those facilities to this day. I am looking forward to seeing factory owners, project managers and engineers, some of whom I’ve worked with for almost seven years.
Before I tell you how I sourced those first three factories, I want to speak to the cover article of this month’s issue (Feb, 2010) of WIRED magazine about the “New Industrial Revolution”. Like many people probably reading this article, WIRED is my favorite magazine. I read it cover to cover every month and have been doing so since almost the inception of that fond rag. In that article, “Atoms Are the New Bits”, the folks at WIRED make it out like all that’s needed these days to make and sell a product is to dial up AliBaba.com, find a factory in Asia, throw a napkin sketch at them and wait for your container of packaged corporate job freedom to arrive in America. If this were true, I would not be so willing to write this article and to give you a little peak into the secret sauce that makes my company, and other companies like mine, possible today.
Ok, so the AliBaba.com part is true. Personally, I prefer a competitive directory called GlobalSources.com but it’s about the same thing. Thousands of manufacturers have listings and photos of OEM items that they specialize in. So your first step is to perform a search for similar items – or rather, items that may be made similarly. American Innovative’s first product was an invention of my design called the Neverlate 7-day Alarm Clock. In short, it is a clock radio that was designed with college students in mind – and facilitates a separate alarm setting for each day of the week in order to accommodate class schedules. Not surprisingly, I searched for manufacturers that made clock radios and not electric motors or stuffed bears. Seems obvious, right? Well in the case of the Neverlate it was but we’re about to release a new item that is a handheld USB device with a dot-matrix screen, which we call the PBA (Personal Baby Assistant). It’s designed to help parents of infants collect data about their newborns – sleep and eating patterns, medication administration, etc. Well who makes one of those in Asia? Hopefully no one. (Aside: If you happen to find your invention during your search for a manufacturer you may want to reassess how unique your idea is. Hopefully you’ve vetted your concept long before when you performed a detailed prior art search, but that’s a whole other article for another day). If your concept is truly new then your process is the same, but you need to be a little more creative. Recall the witch scene in the 1975 movie Monty Python and The Holy Grail. What else (besides a duck) floats? Very small rocks. What else is small and electronic, has a screen and a USB port and some buttons? An MP3 player. A fancy bike computer. A heart-rate monitor. Countless things. A factory that has some experience with these items may be a good candidate to investigate further. Find a dozen such companies and make a list. You’ve completed step one – the long list.
The next step is a little harder. You need to turn the long list into a short list and here’s how you do that. Get out your spec. You do have a spec, right? Ok, get out the napkin sketch. Now open a Word document and write down exactly how your product operates from a user perspective. What do the screens look like? How does the unit respond when buttons are pressed? What are the expectations for brightness, battery life, audio quality if you’re doing a hi-fi or talking device, textile quality and texture if you’re doing a cut-and-sew, materials safety, and so forth. Sound difficult? It is if you’re not serious about your product. If you’ve been lying awake nights dreaming about making this widget, then you’ve already done the hard part – now put it down on paper. How about the external design? Regrettably it is outside the scope of this article to get into too much minutia on this subject but suffice to say that good visuals will both result in a final product that is closer to the vision in your mind and will lead potential manufacturing partners to take you more seriously. After all, it may be China but a napkin sketch there is perceived the same way a manufacturer would perceive a napkin sketch here. Do yourself a favor. Go to Coroflot.com and spend a few hundred dollars to have a bright freelancer or a RISD student work you up some drawings or, better yet, a basic 3D model. Whoa. You want me to spend money? Regrettably yes. And if you’re not willing to spend three hundred dollars for drawings then you should not be proceeding down the “go it alone” path. The trick is to spend smart money. Some good eye candy is excellent bang for the buck, particularly if it’s a 3D Alias model (which can directly feed the mechanical design stage someday).
Ok, spec in hand, it’s time to turn that long list into a short list. Stay tuned for the second installment.




Hi Adam: This absolutely great. Imagine, we raised an engineer who can write!!!
Beth & Henry Hocherman
April 10, 2010 at 9:10 pm
thanks for sharing this. as a person with similar passion with yours, it’s very inspiring. look fwd to more articles here.
kundera
April 11, 2010 at 12:04 am
Thanks for sharing your experience; I’m really looking forward to reading more of your blog.
Dave
April 11, 2010 at 4:11 am
Adam,
As soon as the Renminbi rises to where it should be your labor advantage will disappear. And that won’t be long now. Next, wait for tarifs as the Chinese further refuse to emmissions inspections (as they did in Kopenhagen). Getting involved in a country where millions (no joke) of baby girls have been drowned since 1980 (there are curently 17 million 15 year old boys in China now who have no potential brides) will only set you up for dealing with social problems. Forget about Han nationalism and any wars for now. Forget about IP theft. Western consumer choices will be putting an end to immoral “low cost/high output” off-shoring. Or are you in it for a quick buck?
Scott
April 11, 2010 at 8:07 pm
Adam,
Great contribution to readers who have ideas and may not know what to do with them. Here are some of my experiences..
I have a few suggestions for topics you should write about with regards to your experience:
1. With regards to getting prototypes made–I write in great detail with pics and send it in .pdf form to factory contact–I let them know that I am willing to pay for prototype work so the manufacturer wont feel that I should be “obligated” to them If I should source that prototype elsewhere.
2. I always ask for “catalog” samples if that can be done for your product–short dozen piece run so you can test the market and begin to send your product to senior buyers or potential licensees in your industry.
3. The first shot over the bow! I send a package return receipt mail to potential licensees-competitors, pick the top 30 or so in your industry,and ask them for a meeting to discuss licensing options at the next trade show. Be sure to include graphics, the patent and any other documentation you deem necessary. I address it to the CEO and get a signature return receipt. Call them after you receive the return signature receipt, ask them again for a meeting. Why do I do this? If for some reason you are knocked off “accidentally” it happens, some companies never use the USPTO to check for new product ideas, disingenuous yes, but nevertheless it happens. Now when and if it happens you can have counsel write them a Cease-and-desist letter –and in that letter show them a copy of the return receipt from the CEO, this proves that they did have prior knowledge of your patent and now they are informed and cant claim in court that they had no prior knowledge and you just may get lucky enough that a judge may rule in your favor and issue a cease and desist order based soley on the fact that they had prior knowledge. And the fact that you offered them a license agreement–makes them look bad in court. This will throw a wrench into the works for that company without a patent infringement case–you may just get them to agree to license the product and strengthen your credibility.
4. Learn the business ethics and methods of the country you are dealing with…I am working with a Korean factory but they are located in Vietnam–I made a mistake in a letter asking them for their interpretation of a Part of my product–I found out later at the trade show it made me look wishy washy–I lost some credibility with them –Korean Manufacturers respect to be told exactly what you want.
5. mention the provisional option on patents-
I like crucnhgear read them everyday–I hope some of this helps and we can keep an open dialogue between inventors and manufacturers….
Keep up the great work!!!
Gerry Lemanski, CEO inventor
April 12, 2010 at 5:09 pm
Gerry, good material here. On #5, I can definitely go into the difference between a provisional patent application (PPA) and a utility patent.
designtheatre
April 12, 2010 at 11:46 pm
A really good piece of article. Also I wish to quote a few lines from this article in my news site, I will give a link back to this article. Again.. it is really a good work.
Thanks
Ajithkumar
Ajithkumar Chandramouli
May 1, 2010 at 9:03 pm
Hi, sure thing.
designtheatre
May 3, 2010 at 3:01 pm
Bookmarked your blog. Thank you for sharing. Definitely worth the time away from my studies.
Chiriqui
May 12, 2010 at 10:02 am
[...] Go It Alone: How to Make Your Stuff In China – A fantastic birds eye view article series (Part 1, Part 2, Part 3)on producing consumer electronics in China. [...]
5 Sweet Link for Designers
May 28, 2010 at 1:31 am
Great article. I hope you do a video series with this theme. Keep up the good (and informative) work.
DezVFX
@GraphicDesignNY
DezVFX
May 31, 2010 at 4:16 pm
Great posting, you are really doing a great service giving folks a feel for this process. I’ve done this for years and found your article very sound.
JoeBorn
October 27, 2010 at 4:38 pm
Joe, appreciate the kind words. Thanks for reading! I’ve been side-tracked but hope to get back to writing this winter. -Adam
designtheatre
October 28, 2010 at 3:31 pm
Right, I haven’t had time to do real writing myself on this subject, so I just do some snippets and videos as I think of things. Its not as good but its what I have time for and I think something is better than nothing I reposted this on inventocracy.wordpress.com in case you didn’t see it or get a trackback.
JoeBorn
October 28, 2010 at 5:18 pm
Hi Adam,
First I wanted to say I love the blog (especially this entire series about China) and find it extremely useful and inspiring.
I was wondering how you went about finding a designer at coroflot, and what was the total cost of doing business with them (posting cost + design cost)? Any insights here would be great.
Thanks!
Farooq Khan
February 21, 2011 at 5:10 pm
Farooq, thanks for the kind words. It has been years since I’ve used Coroflot although it was very useful at the time. In fact, I don’t recall there being any cost to review design portfolios (that may have changed). In terms of cost of the project – well that varies wildly with the scope, of course. I would say, back of the envelope, that you should be able to get some useful work out of a scrappy freelancer for less than $1000 to start. Just ot give you a general order of magnitude. Hope this helps.
designtheatre
February 21, 2011 at 5:15 pm
Hi Adam,
Thanks for the guidance on coroflot. This blog has really pushed me into action (have a design in hand) and I’m already looking into suppliers in China. I am just curious what the total costs are in getting a shipment of product over to the US. Besides the FOB price per unit, does the buyer (myself) pay for the ocean freight and the freight from port to my office? Is there a handy website or rule of thumb on the additional cost? In the end, I’m just trying to get a rough estimate of the total cost of making + procuring the product that is ready to sell.
Thanks!
Farooq Khan
March 1, 2011 at 6:50 pm
Farooq, you will buy your goods “FOB Port”, typically Hong Kong or Yantian, which means you are responsible for ocean transport to a US port and inland transport to your final destination. Ocean transport cost itself is a combination of fixed costs and variable costs (based on weight and/or volume) as well as tariffs. You can search online for the Harmonized Tariff Code list (HTS codes) to see what category your product falls into and how large the tariff is – typically 0 to 5%. There’s no real rule of thumb but just to give you a general idea, assuming you’re doing something small and light with a tariff of 5% in QTY of 5-6000 pcs, I’d estimate ~$1/unit to your US warehouse, just to get you started. Search for “freight forwarders” online to get a more accurate quote and make sure to check multiple sources. Good luck!
designtheatre
March 2, 2011 at 2:01 pm