Have you considered DIY – building a business around your invention?

If so, a critical first step is to find a manufacturer – almost certainly in China – and then to begin manufacturing your product. Wow! Does that sound daunting to you? I bet it does. I imagine you have a lot more questions than you do answers right now. Right?

Here is the good new, manufacturing in China (or anywhere overseas) is just a process that can be managed. First let's discuss some of the myths and then we'll talk about the realities of manufacturing.

Manufacturing Myths Abound

In March, 2009, a QVC buyer agreed to buy 3,300 of my wallets, to be shipped into QVC warehouse by September. That was great, except I had no idea how to directly manufacture in China and import into the US and then ship to QVC. But, I had about 4 months to figure it out – and I did – by asking a lot of questions and then getting answers.

Now onto the myths of manufacturing:

  1. Myth: you must hire someone who speaks Mandarin as a go-between to manufacture in China
  2. Myth: importing is extremely complex, you must hire someone to handle all the details for you
  3. Myth: your Chinese manufacturer will just steal your product and make money selling to many others

Regarding 1 above, it is definitely an asset to speak Mandarin, but the Chinese manufacturers do speak English or they would not have any business in the US. True, they don't speak the King's English, but they can communicate effectively in English, typically via email.

Regarding 2, there are some complexities to importing, but none you cannot manage on your own if you are willing to learn. There are 3 team members you must have to import: the manufacturer, a US customs broker, and a freight forwarder. All three work together with you to handle the logistics of shipping product from China to the US. It is just logistics and coordination like everything else about business.

While 3 is a possibility, to my experience, it is unlikely. Why? Chinese manufacturers are good at producing products from customers' orders, not in figuring out how to market products. Not everyone agrees with me on this one.

Manufacturing Realities

So, here are some realities of manufacturing:

  1. You will probably cannot manufacture in the US and run a profitable business
  2. You must have at least a 4X mark up from manufacturing cost to retail
  3. China is not your only option – but often is the best option

The primary reason most products cannot be manufactured in the US is that the costs are higher, which may force you to charge an uncompetitive retail price (see 2 – about 4X mark up). Sadly, too many US manufacturers are not interested in providing anything but the product. Chinese manufactures integrate the product, with packaging, literature etc. for a retail-ready product.

2 above is just a fact of life when you manufacture and sell a consumer product. Actually, 5X is better. Ideally, if your cost to manufacture is $5, your wholesale price might be $12, and retail is then $25. You make a $7 profit, the retailer makes a $13 profit, and everyone is happy. Bump the manufacturing cost to $7+, and the retail price could bump up to $35+, which might not be competitive.

India, Malaysia, the Philippines, Vietnam and many other countries are alternative options for overseas manufacturing. But those countries have neither the depth and breadth of infrastructure, nor the years of experience that Chinese manufacturers have. For this reason, Chinese manufacturers typically are your best option.

I'd like to leave you with the positive thought that you can, indeed, manufacture overseas and handle the logistics on your own (with your team members mentioned above).

Stay tuned.