How to Have Your Product Idea Manufactured
The last blog took you through the steps of preparing a scale drawing and prototype of your design. You may wonder if the product should be made in the United States or overseas.
By law, all products entering the United States must carry a label indicating country of origin. Check top retailers in your field to see if all products similar to yours or even using the same raw materials are imported. Make a note of the country or countries of origin. You now know that if your product is to compete with similar ones on the market it must be imported to be competitive.
If you import a product but add at least 35% additional value in the United States, it can be classified as a U.S. product.
For a new importer there are many reasons(see "Import Your Ideas")why it is best to work with a foreign trading company that represents many manufacturing companies capable of producing your product. You can locate these companies several ways:
1) Contact U.S. trade offices of the foreign countries that manufacture your category of product. They are usually located in New York City or Washington, D.C. Ask for a person who can give you the names of trading companies. They often just take your name and say they will get back to you. Take their name and follow up with a letter to be sure your request in answered.
2) The Internet -- trading companies list product lines. In case you have trouble locating trading companies, pull up manufacturers. Many will inform you of the names of the top trading company with which they work.
Select several sources and write to them describing your product and ask if they are interested in providing you with a quotation upon your submission of drawings. You will need a professional letterhead giving the impression in name and format that you are a substantial company. Enclosing your business card will also help. Foreign companies are generally not interested in working with a small importer. A trading company can often help with this problem in hopes that substantial business will eventually result.
When you receive your quotation they will state minimum quantity, financial terms and other details. Mold costs may be involved. Usually this cost is amortized over the quantity in your first order. If a quotation looks favorable, you need some assurance that you can sell the quantity required for your first order within a reasonable time. If the quantity seems too large, you many be able to have your trading company convince the maker to divide the order into two or three shipments. (If the first shipment does not sell well, cancel the remaining shipments).
Next time we will discuss market test and pricing.