How to Find and Deal with Foreign Manufacturers

Very helpful post on the International Entrepreneurs Blog, entitled, 36 Tips on How to Deal or Negotiate with your Foreign Product Suppliers [link no longer exists].  I urge you to read the entire post, but I particularly liked the following (lucky) eight tips because they are important and yet not often enough discussed:

1. Not all good product suppliers have English language websites. Get someone on board your team who can read your suppliers’ native language.

2. If there is any IP involved (and there almost certainly is), register it in the country in which you will be having your product manufactured and do this before you approach anybody. Then get your potential suppliers to sign a Non-Disclosure, Non-Compete, Non-Circumvention Agreement (a/k/a NNN Agreement) before you reveal any of your secrets to them.

3. If you can’t visit the factory, get an Inspection Company to do it for you. It is not that expensive.

4. Give realistic purchase estimates. If you promise ten times more than you are actually planning to buy, your manufacturer will make up for the loss in anticipated profits by giving you poor quality.

5. Learn about your supplier’s cost structure (labor costs, material costs, etc.) so if it seeks to negotiate a price increase, you have a factual basis for arguing against it.

6. It is a good use of your money to get a knowledgeable international lawyer to draft your contracts so they cover the points needing coverage, including IP protection, product quality, product specifications, and penalties, and so they are enforceable in the right country.

This means finding an international manufacturing lawyer with experience in the country from which you will be buying your product.

7. Ensure the manufacturer you are considering has the machinery & capability to produce your product. Ask them to produce a few samples in front of you.

8. If you can’t visit the factory to check on your product send an inspection company or somebody you trust to do so.

What do you think?