Contract Manufacturing

In today’s globalized world, many Western companies choose to outsource their manufacturing to China to save money and stay on top of the latest trends in design and innovation. Although doing business in China can be extremely lucrative, it’s important to know what potential potholes to look out for to ensure your contract manufacturing project will succeed.

In this article, we list 5 red flags that you should look out for when seeking potential contract manufacturers in China.  

1. Unrealistic Price

Chinese contract manufacturers have the capabilities to significantly undercut prices offered by foreign competitors over a wide range of products. As a result, the low production costs provide competitive advantages in the global manufacturing industry.

However, if the price a manufacturing company offers is too good to be true, it probably is a scam.

In this case, it is important to do due diligence for the suppliers and understand the materials and techniques that will be used in your project. This is because paying too low of production prices can often result in lower quality materials or less efficient production, meaning you could end up with an inferior product that does not meet your requirements and standards.

Additionally, be aware that vendors may quote low prices for their products to get the business, but then increase prices later during production or final delivery. Ensure you check the prices and services in your contract to avoid hidden fees or charges after the deal has been finalized.

2. Lack of Clear Communication

Communication is important for every partnership around the world because it helps make sure that everybody knows what’s going on and that there aren’t any miscommunications. But without clear and effective communication, you may be left unsure of how things will play out or how to proceed in the next phase of your project.

To reduce risks associated with communication issues, be sure to clearly explain your requirements and expectations from the beginning and use professionals who are proficient in both English and Chinese to help navigate any language barriers. Additionally, if you have any questions or concerns during the process, be sure to bring them up right away so that they can be addressed promptly.

Keep in mind that communication can be verbal or nonverbal. Even though many Chinese contract manufacturers don’t speak English fluently, they can always roll their eyes or nod their heads during a conversation to make you feel they understand your idea, which can convey a lot of meaning without words.

If a supplier doesn’t seem interested in talking with you and lacks initiative, then chances are they do not have the passion or will to work well with you. Also, if no translator or bilingual worker is available on the team, this suggests inexperience when interacting with foreign customers. In this case, it’s better to turn around and find a better supplier instead.

3. A Manufacturing Company That is Too Big or Too Small

When you’re looking into contract manufacturing in China, one of the most important things to consider is the size of the manufacturing company you’re working with.

A company that is too big or too small can be a red flag when it comes to reducing risks associated with your project.

This is because companies that are too large may be famous in the industry, thus the production fees can be more expensive, so you may end up paying more than you would with a smaller company. Also, they may have too many orders in hand, and they are willing to deal with small orders, which means that they may not keep following your project constantly.

On the other hand, companies that are too small may have difficulty meeting deadlines and providing enough resources to ensure the quality of your product. Additionally, they may not be able to provide the range of services you need for your project.

When choosing a manufacturing company in China, it’s important to do your research and find one that fits your needs in terms of size, cost, capacities, and services. By doing this, you can reduce your risks when it comes to working with contract manufacturers in China.

4. Defective Sample Products

Another biggest red flag that should alert you to potential problems down the road of your manufacturing projects is defective sample products.

This means that when you receive sample products to review, they do not meet your specifications or standards. It could be due to a variety of reasons such as incorrect production capabilities, techniques, materials being used, poor quality control, or lack of understanding of your requirements.

When faced with defective sample products, it is important to address the issues quickly and accurately. First, you should communicate the issues to your contract manufacturer and clearly define what needs to be corrected or improved. Be sure to provide detailed feedback to help your contractor address the issues. You can also request additional samples for further testing if needed. Additionally, make sure to monitor the progress of any necessary corrections or improvements made by your contract manufacturer.

5. Unable to Ask Specific Questions

One of the red flags you should watch out for is an inability to ask specific questions about your project

Typically, an experienced will ask about your project details including expectations and standards. If you’re dealing with a contract manufacturer who won’t provide you with a clear answer or can’t respond to your specific questions related to your requirements, then you should be wary of the arrangement.

Not only could this indicate a lack of experience in manufacturing the product, but it could also mean that they are trying to hide something from you. The best way to reduce your risks is to ensure that you can ask specific questions and get satisfactory answers from the supplier. If a manufacturer isn’t willing to answer your queries or provide detailed information, then you may need to look elsewhere.

Final Thought

By keeping a close eye on your project and addressing any issues quickly and clearly, you can reduce the risks of production delays and costly errors down the line. It is also important to work with a reliable and trustworthy contract manufacturer who has experience working with foreign companies and understands international standards. Doing so will help ensure that all your expectations are met and that your project is successful.

With our UK background, Chinese experience, and expertise, Shield Works can be your reliable contract manufacturing partner to fulfill your needs without overspending and other potential risks. We follow a rigorous process to ensure quality and consistency from order to delivery. Start your journey by reaching out today for more information!

The contract manufacturing industry in China has grown by leaps and bounds over the past decade and will continue to do so in the years to come. With more and more overseas businesses looking for alternatives outside of their country, moving production projects to China can be a viable option.

Manufacturing your product overseas can help you cut down on production costs, but if you’re not careful, it could also put you at risk of losing control over your intellectual property.

Brands rely heavily on their intellectual property assets to be more successful in the marketplace, whether it’s a product idea or visual elements. This alone should be enough for every business owner wanting to understand the need for an effective IP strategy and how it can be executed successfully.

In this article, we will explore the importance of developing an IP-right protective strategy for your brand and give you helpful tips on how to develop an effective strategy that is perfect for your company. Let’s dive in.

What is an IP Strategy?

IP stands for intellectual property, which is an umbrella term describing the set of intangible assets that are legally protected by a company or person from unauthorized use. Intellectual property comprises different forms of assets, including trademarks, patents, and copyrights.

To be more specific, assets such as business data, product ideas, logos, software, programs, and websites created by your company can all be considered intellectual property if they are legally registered.

When it comes to an intellectual property strategy, it differs from company to company across different countries. However, even though there are some universal best practices for intellectual property management within certain industries, each company also has its own unique set of priorities and methods to protect its IPs.

Why is an Intellectual Property Strategy Important?

Outsourcing your production to China can often be a frightening undertaking, particularly if you are new to the industry or do not yet have established strong connections with factories there.

Fear of losing control over your intellectual property rights is often at the forefront when many business owners think about producing goods overseas. No matter how big or small your company may be, it is vital that you put together a sound IP strategy before you begin producing anything out of concern for having your IP stolen without permission.

1. Ensure Exclusive Rights

One of the main advantages of creating an effective IP strategy when outsourcing your production project to China is to safeguard the safety and confidentiality of sensitive information.

To ensure your brand will live on, an effective intellectual property strategy can protect it in the long term. Keep in mind that your IP protective strategy can be more than just projecting your logo or product idea. You can include other important information that has great relevance to the IP such as product design draft, modification record, product launch plan, financial records, and internal company communications. Creating a proper IP strategy can be a great way to protect business details from leaking publicly or being accessed by your competitors and their employees.

2. Increase Business Value

For starters, many owners have unrealistic expectations about their company’s value. To be straightforward, your brand has value because you work to maximize its commercial potential. Consequently, your intellectual property strategy should be tailored to align with your business objective.

Nowadays, many people buy products or services for more than just the functional or convenient aspects, they want something else like uniqueness and creativity that a company can provide.

To increase your business value, an IP strategy provides peace of mind knowing that other companies will not be able to come along and copy or use your IP for themselves. Therefore, others can’t profit from what is rightfully yours, which ultimately helps your business by directly contributing to the business’s financial goals and growth prospects.

Helpful Tips for Developing an Intellectual Property Strategy

Protecting your intellectual property is a means to secure an economic advantage for your business and make sure you can defend your unique ideas, products, and services. Typically, an effective IP strategy should include the following steps:

1. File and Register Your IP

In today’s age of high-tech and instant communication, information leaks happen all the time. Though it may seem terrifying there isn’t much that you can do about this issue.

For overseas businesses engaging in import-export like yours, it’s suggested to file your IP information, register for protection with the relevant authorities in both your home country or original business location and China, and enforce your ownership rights accordingly.

Staying vigilant and maintaining records of what you’ve invented. If someone else gets their hands on confidential information in a breach, they may try to copy or adapt some of your work, which you could prove if you have documented evidence about when you created it.

2. Use Strong Nondisclosure Agreements

NNN stands for non-disclosure, non-use, and non-circumvention. An NNN Agreement is a type of confidentiality agreement used in business dealings with Chinese companies, particularly Chinese manufacturers.

When working with a contract manufacturer in China, it’s important to have a well-drafted and properly executed strong NNN agreement to strengthen your defenses against IPR violations like trade secret misappropriation, where some of their employees could share sensitive IP-related information with outsiders.

Also, it will ensure the protection of your intellectual property rights and offer dispute resolution in case the manufacturing company fails to uphold its obligations in the contract.

3. Keep a Close Eye on Your Manufacturer

Before choosing a production partner in China, it’s always a good idea to do due diligence carefully and keep a close eye on their company updates by continuous monitoring.

Firstly, you should understand the tiers and backgrounds of different suppliers to avoid being taken advantage of by middlemen or low-quality facilities.

Next, you need to be aware of how transparent each production stage is so that from communicating with the manufacturer to receiving your product, you’ll never have major problems related to your IP.

Are You Looking for A Contract Manufacturer in China?

Many businesses are outsourcing their production to China because of cost savings. But before you dive into outsourcing your production, you need to make sure that your intellectual property is adequately protected. Finding such a reliable manufacturer in China that can safeguard your IP can be daunting and time-consuming. Shield Works would like to be your local manufacturing partner that protects your IP and meets all your production needs.

Shield Works Precision Manufacturing Co., Ltd is the subsidiary of the C2W Group that has 17 years of providing supply chain management, quality control, and product development services in Asia.

We are a British-owned and managed company that has an IP-protected facility that can handle the needs of contract manufacturing, precision assembly, quality inspection, and warehousing.

Over time, we have developed a list of IP protective methods at our custom manufacturing and precision assembly facility that has proven 100% effective at preventing IP infringements.

• We have state-of-the-art fingerprint scan access for all production zones so that you can be assured that no one other than those who are authorized has been near your product.
• We will have legally binding NDAs with every external body that we may work with during the process of your production line, so nothing leaks out about what’s being made – from here and all across town.
• We partner with Innopat, a leading Zhuhai-based IP industry expert, to provide our clients with clear, no-nonsense advice and IP protection services.

Start your journey by reaching out today for more information and see how we will be able to meet all your demands under the same roof without taking any risks!