Your advertising success is surpassed only by "word of mouth" accolades. The orders continue to pour in. You phone the manufacturer to share the good news and discuss production for the next 90 days. You are ecstatic, but your enthusiasm is shattered by the sobering response on the other end of the line:

"We have to talk."

1. How does one find a reputable and reliable manufacturer?

(Quick Tip: If a manufacturer states that he produces all types of goods, be very cautious. Manufacturing expertise is specialized by company and by country, due to raw material sources, labor forces, and historic expertise in producing a particular product.)

First, ask the potential manufacturer to sign a non-disclosure agreement, and, if necessary, a non- compete agreement. These agreements should be prepared for you by a competent legal advisor

Second, while interviewing the manufacturer, and prior to awarding an order, ask for whom they produce. Some manufacturers design, produce and sell their own line to wholesalers; others produce only other people’s designs. The manufacturer who does not have a line of his own exists only to produce other people’s product, and is usually far more protective of your designs.

Last, if your product is protected by a patent or copyright, be certain to stamp that on the drawing, and on all documentation.

The first step is to be certain of what is needed, and to be able to communicate it. The best way to communicate the details of the product is with a written specification that is accompanied by a matching final prototype. The specification should have critical dimensions and tolerances clearly indicated, as well as color samples attached. (Please note that color is not exactly translatable among various materials, so it is best to obtain a color chip or sample from the same type of material you will be using for your product.)

The specification might also have a list, or a "bill of materials" which describes all of the components needed for the product, including packaging and tags.

(Quick Tip: Need help in determining what type of packaging is best for your product? Look in stores with a variety of packaged goods such as hardware toy, or drug stores—You’ll have plenty of ideas!)

The specifications will also be used as part of the quality control inspection, which should occur before the goods are shipped.

(Quick Tip: Many people hire an independent quality control group to come into the factory and inspect the goods after the factory has finished their production and internal inspection. The cost of such a service usually adds less than 10% to the cost of the product, an inexpensive price to pay to assure the product was produced to your specifications.)

Any goods entering the United States must be accompanied by proper documents prepared by a Custom’s Brokerage Firm. These experts are usually Freight Forwarders as well, and will assure your product is safely transported from the offshore factory, to the shipping dock, across the water to the receiving dock, through Custom’s Clearance, and to your warehouse.

(Quick Tip: Contacting a Custom’s Brokerage Firm before you begin manufacturing can save time, money, and grief. A knowledgeable Custom’s Broker can assist with duty, quotas, packaging advice which will result in efficient container loading configurations, and estimates for shipping and all related charges.)

The minimum order quantity (MOQ) is set by the manufacturing plant based on raw materials, production run time, and anticipated production start up costs and complications. Most manufacturers use a full 40’ container load as a minimum order, because it is the most cost efficient way to ship product across the water. The quantity needed to fill a 40’ container is determined by the dimensional size of your product. If your order does not fill a full container, additional charges, such as consolidation (combining several customer’s orders together to fill a container) will be added to your shipping fees.

There are distribution companies that specialize in receiving, storing, and re-distributing your product. The prices are generally determined by the quantity of goods, the amount of space you will need in the warehouse, the length of time the goods will be stored, and the amount of work necessary to distribute the goods.

(Quick Tip: Many Freight forwarders also offer storage and distribution services for their clients.)

Letter of Credit (L/C), or Bank (wire) Transfer, both which occur just before the product is shipped from the factory. You will want to discuss these options with an international bank manager to determine which is the most beneficial option.

(Quick Tip: A letter of credit is designed to protect both the buyer and seller, but be careful in drafting the terms, as changes can be very costly.)

The absolute best method for communicating is face to face with an exact sample in hand. However, that is rarely possible. The second best is clear and precise written directions accompanied by a sample or detailed drawing. Showing and demonstrating is far better than explaining.

Many companies have e-mail, which is far more efficient than its predecessors, especially with the use of digital photos and scanned images to clarify your meaning.

Most factories plan, and are fully booked, at least 2-3 months in advance. If they do not, you may want to reconsider working with them. Be certain to add shipping time to your schedule, so the total time from the date the purchase order is issued until the product arrives in your warehouse could be as long as 4 months—longer if your product requires tooling.

Every product is priced individually, and the pricing process (materials plus labor and overhead) is no different than it would be with a domestic manufacturer. However, if your product requires a lot of hand labor to produce (sewing, hand painting, assembly), you will find that the cost is substantially less overseas. As well, services (such as custom tooling) are generally priced more reasonably overseas.

Where else can one turn for help during the process?

Managing all of the aspects of manufacturing and importing can be overwhelming. There is no substitute for experience, and successful business is the result of solid relationships between the parties. Seeking expert advice from consultants (such as established importers, manufacturing management firms, and international banks) who have built long term partnerships with overseas companies will minimize the risk and expedite the production process. Finally, study this area as you would any other new venture, remembering that in most cases, the questions asked are more important than the answers given.