Comments for Design Theatre - Life in the Product Design Trenches

Comment on Going It Alone Part 3: Inside the Factory Walls by designtheatre

designtheatre — Sat, 12 Mar 2011 05:35:18 +0000

Hi Max,

The short answer I usually give to this question (disclaimer: this is not advice – you have to make this decision based on what you know about your product/market) is that Chinese factories are good at manufacturing things, not selling things. Know what your target market is and ask yourself if (a) the factory you’re going to reveal your idea to really has the capability/desire to compete against you in that market and (b) if you really care (for now) if they put that product in some other market that you probably don’t have access to anyway.

Factories knock off really successful products once they’ve been proven in the market, not new boutique ideas. Furthermore, you probably don’t have an alternative. Generally speaking, if you’re looking to Asia to manufacture then you probably don’t have a business model that supports using US-based firms.

Visit the factory you plan to work with. It will give both parties more comfort and set the tone for establishing a trusted, long-term relationship. Good luck!

Adam

Comment on Going It Alone Part 3: Inside the Factory Walls by Max

Max — Fri, 11 Mar 2011 20:16:53 +0000

Dear Adam,

I cam across your article in crunch magazine while researching factories in China. It seems I am in the same position, and age, as you were when you started your company. We have a lot in common as I am also a ME and coincidentally an e36 enthusiast (your blog came up when I googled you), and I was hoping you could provide some insight in regards to choosing a manufacturer in China.

Specifically, how the hell do I keep them from competing against me? The product I want to make already exists, however my design will be used for a different purpose and market (a lot like your alarm clock). Do you think it is worth it to take a risk, and show them my idea? I have sent NDAs but I don’t have much faith in their effectiveness.

I sincerely hope you have a chance to read this and respond.

Thanks for your time.

Best,
Max Neu

Comment on Go It Alone: How To Make Your Stuff In China (Part 1) by designtheatre

designtheatre — Wed, 02 Mar 2011 14:01:33 +0000

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!

Comment on Go It Alone: How To Make Your Stuff In China (Part 1) by Farooq Khan

Farooq Khan — Tue, 01 Mar 2011 18:50:41 +0000

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!

Comment on Go It Alone: How To Make Your Stuff In China (Part 1) by designtheatre

designtheatre — Mon, 21 Feb 2011 17:15:32 +0000

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.

Comment on Go It Alone: How To Make Your Stuff In China (Part 1) by Farooq Khan

Farooq Khan — Mon, 21 Feb 2011 17:10:24 +0000

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!

Comment on Going It Alone Part 3: Inside the Factory Walls by MIH

MIH — Thu, 04 Nov 2010 11:36:32 +0000

Hi. I’m rather late with my comments, but still would like to point out some inaccuracies in your statements Jon.

To say that there is no income tax in India is entirely false (even 10 years ago). There is a minimum salary, above which you are not exempt from tax. Most s/w developers consequently end up being tax payers. However, taxes are not as high as in the US. Regarding health insurance, yes it exists but is not enforced or as prominent as in the US. This however is slowly changing much to the chagrin of the people as hospitals adopt the US model resulting in what you characterize as unneeded expenses. Housing would typically set you back by 1/4-1/6 of your salary depending on the city you live in.

The exchange rate of the USD to INR proves advantageous when it comes to labour. Also, Indians being conservative with their finances end up spending a lot less than people I have observed in the US or EU with similar income.

Comment on Go It Alone: How To Make Your Stuff In China (Part 1) by JoeBorn

JoeBorn — Thu, 28 Oct 2010 17:18:58 +0000

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.

Comment on Going It Alone Part 3: Inside the Factory Walls by designtheatre

designtheatre — Thu, 28 Oct 2010 15:35:41 +0000

Tholomew, this question comes up a lot. My feeling/experience is that what prevents factories from doing this is not so much that it’s difficult, but that “selling” is not what these factories excel at. It’s not their core business and, ultimately, if they get a reputation for being unscrupulous it will hurt what is their core business. What I look for in a vendor is the same thing that I look for in a friend, an employee or any other judgment call that I might make. You need to talk to them, feel out their strengths/weaknesses on the phone and over e-mail. Ideally the best way to get a “warm” feeling about your potential partner is to go out there and visit. There truly is no substitute for a face-to-face meeting. -Adam

Comment on Go It Alone: How To Make Your Stuff In China (Part 1) by designtheatre

designtheatre — Thu, 28 Oct 2010 15:31:07 +0000

Joe, appreciate the kind words. Thanks for reading! I’ve been side-tracked but hope to get back to writing this winter. -Adam