As your product-based business grows and you expand into the wholesale market, moving your production to China can be a wise decision. It’s no secret that unit costs are lower outside of the US. It’s the #1 reason why stationery businesses decide to start manufacturing and printing planners in China . . . and is probably the reason why you’re reading this post.
But before you dive in, here are 6 things you need to keep in mind:
Would you hire a caterer for your wedding without tasting their food? Neither would I. It’s one of the most important (and expensive) days of your life, and your reputation is on the line. The same logic can be applied to your business. You are making a huge investment in your product line, and the outcome must be nothing less than perfect. So sample the goods before taking the plunge.
Too often I get a frantic email from someone who is midway through the process of manufacturing in China for the first time. It’s usually because they need advice on shipping (don’t worry, that’s coming up later in this post). We talk through the process and then they drop the bomb . . . “I cannot wait to see my products in real life! I hope the quality is good.”
This statement makes me so nervous! I ask if they received samples from this manufacturer before placing their order. They always say yes, because they are savvy entrepreneurs, but that they were not samples of their exact product.
Manufacturers will happily send you multiple samples of products they have already produced to prove their level of quality and clientele.* But you have no way of knowing how your specific product will look. Your product is unique and you need to see exactly what it is going to look like—before placing your full order. So, go ahead and accept those samples first. If they look good to you, ask for a custom “dummy” sample to your exact product specifications.
A dummy sample is a blank white sample (white paper with no printing) made from your specific paper and materials specs. Order a dummy so you can make sure the quality of construction is up to your standards. Dummies are also a great way to see the dimensions of your product in real life too. Is that extra thick, luxury paper you wanted really worth the extra cost? Or does it make your planner weigh a ton? Better you find out now than have to explain to your customers why your perfect on-the-go planner is like carrying around a college textbook in your purse. (Do they even have textbooks in college anymore?)
Note: You will most likely have to pay for samples. Don’t be shocked when you’re asked to pay a few hundred dollars for a sample planner, or even more for a custom desk accessory that involves creating a one-of-a-kind mold. It’s worth every penny and I highly recommend it. Spare yourself a costly mistake.
*And to circle back on how manufacturers will happily send you samples of other people’s products . . . do you want your products being sent around to competitors? Especially if they haven’t launched yet? It happens. Be upfront and clear with your manufacturer about this. If you do not want them to send your products out as samples, or use images of your products in advertising, let them know.
Based on geography alone, we know that manufacturing overseas is going to take longer. Shipping from China to the US via ocean freight takes about 4–6 weeks, and then your goods need a few days to clear customs. Plus the fact that there is an 8–12 hour time difference between the US and China (depending on your time zone), it can often take a whole day before you receive a reply to your email—don’t expect real-time conversations here, unless you work after-hours.
Fun fact: China does not observe daylight saving time, so the time difference between countries fluctuates by one hour depending on the time of year.
Remember to build in time for sampling too (as discussed above). Most often it takes 2–3 rounds of sampling to get your product perfect, so I build in an extra 2 months for that.
To give you an idea of how far ahead you should plan, here is a basic production timeline for a day planner:
Quoting and sampling stage: 8 weeks PO to proof approval: 2 weeks Printing and production time: 8 weeks Packing and preparing to ship: 1 week Shipping via ocean and clearing customs: 6 weeks Ground shipping from port to your final destination: 1 week or less
TOTAL TIME: 26 weeks (or about 6 months)
It all adds up. Plan ahead and pad your schedules with extra time so you are not left stressing and scrambling before your target release date.
Minimum order quantities (MOQs) are high
While unit costs are lower, MOQs are higher. Depending on what you are making and which manufacturer you choose, MOQs can range from 500–5,000.
Don’t get caught in the price-break game. Ordering a higher quantity will lower your unit cost — but do you have the space to store 10,000 planners or coffee mugs in your studio apartment?
Expect to pay cash
For small transactions, like ordering samples, you can usually use PayPal — and it’s typical for factories to add a transaction fee to cover their PayPal costs. But for purchases over $500 (give or take), most factories request that you pay cash via wire transfer from your bank. Half will be due when you submit your purchase order and the other half will be due when the goods ship.
Keep this in mind when gathering quotes. Manufacturing 5,000 planners for $6 each may seem like a bargain, and it is. But can you afford to pay $30,000 cash for them?
Shipping: Find a freight forwarder and customs broker
Note: There is a LOT involved with shipping and importing goods from China — more than I can cover in one post. This is a general overview.
Hiring an international freight forwarder is a good idea for both air and ocean shipments. They are experts at handling shipping and importing logistics. They do not physically move the goods themselves, but act as a project manager linking the manufacturer, cargo carrier, customs, and you. This is a professional that you want on your side.
Tip: Find a freight forwarder that is also a customs broker. Not all companies handle both specialties. Finding one company to handle both aspects of shipping is a bonus. We know and love the folks at CargoTrans.
The business of importing goods is a complicated one. There is a lot of paperwork involved, not to mention those pesky antidumping laws.
Antidumping is a term used when describing the tax that the US government puts on imports that they deem to be purchased at a price that is less than fair market value.
A freight forwarder or customs broker is your best weapon against antidumping penalties, and is your liaison throughout the entire shipping process. They are your eyes on the ground and follow your shipment through customs, troubleshooting any issues that arise.
I recommend starting a relationship with a freight forwarder as early as possible. Antidumping is a big deal, and even large companies fall victim to being uninformed. Penalties can be as high as 250% of the cost of your goods! There goes your profit margin.
Joking aside, this is a serious topic. Duties are imposed on several stationery products imported from China. A freight forwarder will be able to tell you if your products fall within the antidumping policies before you even start manufacturing.
Inspect your shipments upon arrival
Actually, this is great advice no matter where your orders come from.
Inspect the outside of the boxes before you open them and take photos of any damages. Look for evidence of damages during shipping (boxes that look like they were dropped, crushed, water damaged, etc.).
Then open all of the boxes and inspect each and every one of your products. If you ordered journals or day planners (or a high quantity of anything), this can take some time but is well worth it. Trust me. If you have a team, round them up and do this together. Or recruit a friend or family member to help you. As my mother-in-law always says, “Many hands make light work.”
Flip through every page of your planners and inspect every nook and cranny of your desk products for imperfections of all kinds: scratches, dents, bent coils on wire-o bound planners, missing pages, upside down pages, printing/color inconsistencies, missing barcode stickers, etc.
Set aside anything that is damaged and repack the ones in good condition. When you repack the boxes, write the quantity and description of the contents on the outside of each box. When you are done, add up all of the quantities to make sure you were shipped the same amount that you paid for.
Assess the damage. Count the number of damaged products you have. It is reasonable to have a small percentage of damaged goods (my factories average around 1%). Any number that seems unreasonably high to you, alert the proper vendor to the issue — the shipping company for any damage that appears to come from shipping or the factory for any issues that appear to be related to printing or manufacturing.
In my experience, vendors are very willing to offer a variety of solutions if they are notified within 14 days. You can expect to receive partial refunds, replacement goods, a credit applied to your next order, or other creative solutions. Also, don’t be afraid to ask for reimbursement of any costs incurred on your end when dealing with damages. In some cases I have seen factories reimburse for wages spent on paying staff to inspect and repackage your goods.
If you wait longer than 2 weeks to inspect your goods, a damage complaint can be considered suspect. Vendors will wonder why you waited so long to tell them, and if the damage was actually caused in your own warehouse.
So there you have it, a very brief overview of the 6 things to keep in mind when manufacturing overseas.