How to Manufacture a Custom product in China

This is a great question because most manufactures have the capability to manufacture custom products for their clients, but not all of them will do it for every potential customer.

There are a few factors that influence the interest of a factory to manufacture your custom product:

  1. Customers willingness to pay for development costs: If you have a budget for the development costs of a product then a manufacturer will be much more interested in discussing custom products since they know that they will be paid fairly for their development work.  In order to develop a custom product usually a factory needs to spend money on engineering support, production manager time, mold/tooling costs, and product reject waste when they set up production for a new product.  This all costs a lot of money and if the buyer cannot help with the cost then the factory will likely not want to make the custom product.
  2. How much the customer plans to order: Low order quantities will make factories less willing to develop a product. If a factory is going to spend a lot of time and energy to make a product (even if the development is paid by the customer) they want to make sure that the customer will purchase a lot of this product in the future.  If the customer does not purchase enough quantity, then the custom product development may not provide enough ROI on the factories time and they will refuse the project.
  3. How big each order is: Larger factories are usually less willing to take on projects that are too small.  If you go to a huge factory and ask for 100 pieces twice a year, then they will probably not be willing to develop a custom product for you.  It is just not enough quantity for the factory to make money.  If you have very low order quantities then you will have to find a smaller factory that is willing to take the order and build a custom product for you.
  4. Certification Requirements: In some cases products require certain certifications that the supplier is not willing to get.  If you are their only customer that requires the certification and it costs $10,000 per year to maintain, but you only buy 200 units a year, then it’s just not cost effective for the factory to make the custom product for you.
  5. Audit Requirements: Some customers require strict audit requirements on the actual factory building that the factory is unable to change. There are many factories that rent a space in a big building with other factories.  They are often unable to modify the building to meet the audit requirements since they don’t own the building, and there are other tenants in the building.

Tips for finding a factory that will customize a product:

  1. Look for a factory that matches the size of your company. If you are a small company then don’t look for the biggest factory in the industry.  Chances are you will be too small for them to care about your orders and product.
  2. Offer a guaranteed number of purchases for the year. If you have an established business with steady annual demand, then you can guarantee a minimum order that you will purchase every year from the supplier.  If the quantity is big enough then sometimes the supplier can amortize the development cost of a custom product into the piece price so that you never have to pay development costs.  You can also pay for the tooling upfront and negotiate with the supplier to return the tooling cost after you have purchased a set number of units.
  3. Find where your competitor’s manufacture. If you can find where your competitors manufacture, and the factory owns the tooling, then you can use the factories tooling to make your products with little or no development cost.  If your competitor owns their own tooling, then the factory that already makes similar products for your competitor can most likely develop your product for a better price then other suppliers.
  4. Use your suppliers existing molds and make simple modifications: If you can use the existing molds and just make small adjustments or tweaks to the product to customize it then you can save money and time on product development.
  5. Find the manufacturer directly: If your speaking to a trader (you may think you are talking to the manufacturer, but you are actually talking to a trader who says he’s the manufacturer) then sometimes the customization for your product is not worth their time.  It will take them too long to get the product customized for the commission they will receive from the manufacturer.  They will just tell you that they cannot do it.  If you talk directly to the manufacturer then this is not usually the case.  For more information about distinguishing a trader from a factory you can read this post ways to verify Chinese factories are factories, not trading companies. 

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