You want to find a Chinese supplier because you need the price advantage that China offers, but you are concerned that the supplier you will be working with will start selling your invention to other people or that others will start producing and selling your invention. Basically, someone could start competing against you with their own invention.
What you need is a strategy that does the following:
Select China suppliers that are more reliable
Motivate the supplier to be reliable and
Eliminate any opportunity for the supplier that may result from being unreliable.
The strategy
A reliable supplier
In our experience, when an idea is stolen, it is generally stolen by a commercial company and not by a factory. The reason for this is that factory owners are generally more interested in keeping their factories busy and less focused on marketing issues. Furthermore, factories are less likely to have competent English speakers to adequately follow the foreign market.
Therefore, it makes sense to find a factory rather than a trading company. However, not all factories are the same. Not only that, but you also need to make sure you have a competent and reliable factory.
The ideal factory is medium in size. Smaller factories will often lack the skill and competence to provide you with a reliable supply without the need for constant care and management. Larger factories are more likely to have experience selling in foreign markets, and therefore have the potential to sell your invention without your knowledge to competitive retailers or distributors. A medium-sized factory provides you with the right balance between skill and isolation from Western retail and distributor competitors.
There is a matter of dispute over the ideal factory, regardless of size. That’s your current product range: Are you looking for a factory that has experience manufacturing a product similar to yours or is completely new to the industry? In the first case, you will have a factory with a greater degree of experience and connections with another possible distributor; however, they are also in the best position to take advantage of the sale of their product behind their back. In the second case, you will have a more reliable provider; however, it must be correct and specific about what must be done, and it must also find all the distribution routes. The answer to this question should be consistent with the other elements of the strategy and should match what you are comfortable with.
Motivating reliability
There are two basic ways you can encourage a factory owner to be trustworthy: strong, trustworthy orders, and a good relationship with them.
A good relationship can also help. However, this can really only help if you keep the factory busy. If your involvement in a factory is more complicated than it is worth, then it will probably harm a good relationship, and there is little you can do to improve it. However, if you maintain a steady flow of orders, then keep in touch with the factory owner, and working on their relationship can further encourage reliability.
Products made in China
Products made in China are generally considered to be of lower quality to some people. However, there are now more opinions from experienced importers that Chinese products are not of such poor quality. After many years of production, the workers’ facilities and skills are much better developed. Anyway, there are always products at different price levels and quality levels, and you can find the right prices and quality for you if you have enough experience. In general, prices and quality are lower along the east coast of China, such as Jiangsu province, Zhejiang province, Fujian province, companies in this area are looking for lower quality, price lower, lower profits, and more orders. While on the southern coast of China’s Guangdong province, both prices and quality are slightly higher. This can be used for a reference when you get products.
Some areas have special advantages in certain industries. If you buy electronic products, Shenzhen city (Guangdong province) is your first choice. If you buy flip flops or shoes, Fujian Province will be the first place to go, as they have developed a complete industrial chain and support for various materials and techniques. Take dog accessories; for example, canine chewing gum is mainly produced in the Zhejiang and Tianjin area, and the others like dog clothes, cables, and collars, beds, shampoo, and grooming are produced in Zhejiang and Guangdong.
