Importers order product samples to both test their new design, and the suppliers production capabilities. It’s also a way for the supplier to learn how to make the product, and create molds and other necessary tools.
The prototyping and sample order process can take months, and sometimes suppliers just give up – even without telling the customer. In this article, Kevin Lee of Asianconn, shares his best advise to Startups and SMEs looking to get their prototype or product sample manufactured in China.
Kevin, please tell us a bit about your background, and current business
In early 2000, China became what many call “World Factory”. She had reliable and cheap labor pool, friendly business ecosystem and low production cost. However, that “potential” came with certain issues that make the business full of risks.
Compared to big companies, many middle and small business didn’t have the ability to implement international purchasing strategy. On the other hand, excellent local suppliers totally didn’t know how to deal with customers abroad.
In 2009, I finished my work in Hong Kong and built this business with my friend Vincent to connect reliable Chinese suppliers to Western purchasers and help them hold the entire trade process to avoid various kinds of risks.
The sampling process is perhaps the most complex part of supplier sourcing. Why is it necessary to order product samples before ordering from a supplier?
Well, let us look at this part by starting with an example. When a person goes to the store to buy some new clothes, I would say that most of us will try these clothes on before buying it, to see if it is the way we want it to be. Here an analogy can be drawn to the product sampling process.
You want your product to be (as funny as it may sound) “the way YOU want it to be”. You have certain expectations in regards to the materials manufacturers will use, production process, how the final product shall look and of course quality.
Not all of the manufacturers in China are trustworthy, they need to be monitored on a constant basis in order for you to receive the final product that you have ordered.
The main reason why sampling process is important is that your mass production should be based on it. So you have a sample that has been confirmed and reconfirmed with the manufacturer. The factory is supposed to produce your batch according to this confirmed sample and its agreed standards.
So you might think of this process as a way of safeguarding yourself and your money. If products are not produced according to the confirmed sample, then you can get your money back, or get new products or work out some other type of deal.
Is sample development relevant when importing private label products, or is it only necessary for custom designed products?
Sample development is relevant for any sourcing activity out there. We all understand that for custom designed products it is a bit more complicated because their products are more customized and unique, so those guys want to absolutely make sure that everything is top notch.
If you are doing private labelling, my advice to you: “Make sure to get the samples, check them, confirm them before you place your order.”
Let us say you decide to private label a small notebook. You can go two ways here, whether purchase the product from the factory in their standard packaging and just sell it that way or you can put your own logo on it.
In either way, you want to make sure that your product will be of a certain quality standard and you will not be able to confirm that until you see and hold the actual sample in your hands.
You receive the notebook, you look at it, you open it, go through it, write in it and anything else you can think of how your customers might use it.
The goal is to test it to the limit to make sure it is what you want and it will be what your customers will buy and it will last them for more than one week.
When starting a sampling process, the buyer may need to share their IP, such as design drawings and labels. How do you suggest that buyers protect their IP before starting the sampling process?
Many clients are worried when it comes to this particular topic and let me tell you, there are ways that buyers can protect themselves. The first solution to consider is to sign an NDA (Non-Disclosure Agreement). I strongly suggest to use proper legal counsel rather than drafting paper yourself or downloading it and having it signed by the manufacturer.
It is very hard to enforce an NDA in China and if you were lucky enough do to that it doesn’t mean that you will get any compensation from the supplier.
Another solution I can recommend is to patent one’s product on all the major markets like the EU and USA. This method’s disadvantage includes costly and time-consuming procedures. So if you are a start-up without any major investments or an SME this approach might not be viable for you.
In general what you have to understand is that it is hard to protect your product when you are producing it in China and even though you might have an NDA or a patent the product might still get copied.
Sampling may also involve the purchase of new molds and other tools, which can cost the buyer hundreds or even thousands of dollars.
How can the buyer ensure that they are the owners of the tooling they pay for?
The procedure for this is very standard, buyers simply sign a contract with the manufacturer. I think what buyers should remember is that this contract should not only include the mold ownership, but also terms that will protect the molds from being copied. Here are some examples of what I would include in such an agreement:
-This mold can only be used to produce company X product and it cannot be used to produce products for any other party;
-A deposit of XXX is given by the manufacturer to the buyer for X mold. In the event, manufacturer breaks terms of this contract total amount of deposit will be awarded to the buyer. Additional damages can be requested;
-If the contract is breached by the manufacturer liquidated damages will be awarded to the buyer in the amount of XXX.
As with the IP law in China when it comes to mold and tooling purchase you are not guaranteed to get you mold back. Do make sure to have all the contracts done legally and in accordance with both Chinese and International Laws.
Product development can take months. Do you have any tips for reducing the sample development time?
First, make sure that you are working in the same time zone as China. If it is 9 am in China and 11 pm where you live it shouldn’t matter to you. Hours can be lost in communication with suppliers, especially when you are developing a sample. So always be available and work on Chinese time.
Make sure to not only communicate through email but also Skype and other video chat services. This will build a better relationship with the supplier and increase efficiency.
Be aware of Chinese national holidays, major ones happen three times a year: Chinese New Year, International Labor Days and National Day.
Other than that, stay calm, friendly, push if necessary, but make sure not to over do it. Delays, often due to misunderstandings, can also add months to the sampling process.
How do you properly communicate quality requirements to the supplier to avoid time consuming misunderstandings?
Depends on your product and your manufacturer. Usually, when ordering a sample a PI (Proforma Invoice) is being signed by both parties.
In this mini-contract, you need to list all the specifications, drawings, requirements, pictures, anything you have available in order to make the process easier for the manufacturer. Remember to have all of those stamped and signed.
I want to stress one point, reconfirm your specs for the product sample at least twice through different channels.
Make sure you have all the information documented in the emails and have a Skype video chat with the supplier. I faced situations where suppliers confirmed the understanding of how the sample should be done. But when the sample actually comes out you realize that you just wasted a lot of time.
The sampling process is still about resolving technical issues. How do you think buyers should report sample issues to the supplier?
Logos get wrong, wrong material, colors, etc. It’s part of the process and expected. How shall buyer’s report issues to suppliers so they can solve them?
Whether you are an SME or a huge international conglomerate you still might face technical issues in regards to the sampling process, nobody is “insured against that”.
When making a sample manufacturer might use wrong material, color, shape, logo, standard well just basically if something can go wrong something will.
Buyers should be ready for that and they need to understand that giving feedback on a sample is a natural process of things. The most common way is to look at the specifications you have listed in your PI and first write everything down in the email with pictures, of what is wrong and how it should be.
After your supplier receives the email and goes through it, make sure to yet again do a video conference with him and ask him/her to tell you what are the issues that you have mentioned. You need to confirm that the other side does actually understand what is wrong.
In the future, I would suggest that before supplier ships the sample ask for sample pictures and video, this way you can at least eliminate some problems without having the supplier send you the sample thus wasting valuable time.
How do you think that buyers should deal with suppliers that keep failing making samples according to the specification?
First buyer should ask these questions. Are there any other suppliers available? What are the reasons that the sample is not produced? What is the manufacturer’s reputation (use search engines and Google translate for that)? Who are the manufacturers’ clients?
At the end of the day, I would suggest if you have been waiting for your sample for 2 months now and received zero updates, move on. Under certain circumstances, 3 months grace period can also be accepted.
There are also limitations to what can be realized on a product samples, as compared to the final product. Perhaps the supplier cannot get the color right. What kind of ‘gaps’ should buyers expect?
Sometimes to have exactly what you want is simply impossible. But impossible for what reasons?
Because someone is too lazy, doesn’t want to compromise or just doesn’t do the job in the way he/she should. Or sometimes it comes from unclear instructions.
Buyers should always expect gaps, as I previously mentioned they can be related to color, shape, product material, etc. And at the end of the day buyers might have to accept the product that on some level differs from the sample.
This is why one of my suggestions would be to order at least 3-4 samples of the same product to see what can go wrong, how mass production can differ.
Assuming the sample cannot be a complete replicate of the final product. How do you suggest that buyers should ensure that the final product is matching the specification?
Well, first things first. As I mentioned in the previous question order a batch sample rather than just 1 piece. Secondly, when the final product is mass produced and you have a Quality inspection agent coming to check it before shipment, make sure to prepare a checklist.
This checklist should include all the possible acceptable and unacceptable product variations. Meaning this shade of blue on the notebook is still ok, but the other dark blue one cannot be approved by QC and has to be redone.
I do also encourage buyers to visit the factory during the production process. You will be able to see the different components for your product, intervene if something is not going right. In general, having a much more hands approach will assure a better quality of your product.
Thank you Kevin. How can Asianconn help buyers with supplier sourcing and sample development?
Asianconn helps buyers with everything from supplier inspection to international logistics. We are capable of catering our services in a unique way to every client. You know why? Because every client is absolutely unique in his/her requests. If you want the whole package, no problem, if you want us to help you with just one or two issues, that is also possible.
Our goal is to make money not only for ourselves, but for our clients as well. We do this by providing different types of services: procurement outsourcing, contract manufacturing, product development, and express sourcing service for small business.