So how to start manufacturing abroad?

[lawrence hello]

I know I'm a bit new to posting here, but I've lurked for a long time and always been very impressed with the quality of the answers people get, so I thought I'd throw you some questions of my own.

To tell a long story quickly, I've come up with an innovation to do with bicycles and the way they can carry things, it would allow for a bicycle to convert between being a commuter bike and carrying silly big things like a washing machine or similar, and having found nothing similar to this at all, so I think this could stand a very good chance of being patentable.

My situation now is being the typical debt ridden student, so for the next year or so I'm planning on just prototyping this myself and getting to final working design by the end of my studies, this is the point though from where I need some pointers. Although the design is quite simple technology wise, I can't see it being financially possible to manufacture this in the UK (although I guess some bike people like Brompton do manage it) so I'm then looking for a manufacturer abroad to make these bikes for me. I've read most of the advice here about importing goods from China etc but I'm less clear about the best way to establish a relationship with a company manufacturing a totally new product.

I'm thinking obviously I should definately go to them at some point at least to look at the factory etc. but how does that begin? Do I need to show them a prototype, or just plans? Am I going to meet the right kind of people at trade fairs, or are they more focused to selling exisiting products they already make? In regards to patenting, should I hold one before I approach manufactures or can this happen in tandem?

Sorry for the range of questions, obviously I'm not very far along the business road yet, and so I'd appreciate any advice or experiences you can share.

Thanks.

[robm3]

lawrence hello said:

I think this could stand a very good chance of being patentable.

Step 1. Do a patent search, use a patent laywer. If none similiar (you'll be lucky!) then apply for patent. Google Patent Agents in your area. Should cost a couple of hundred all up.

lawrence hello said:

I can't see it being financially possible to manufacture this in the UK.

To be honest your best bet is to approach a UK manufacturer, they can discuss your ideas. Ensure you have a patent pending and get them to sign an NDA. They'll probably let you know if it's viable. If it is a good idea they'll offer a licensing deal. This could be the easiest route to market and an easier income stream for you.

lawrence hello said:

I'm thinking obviously I should definately go to them at some point at least to look at the factory etc. but how does that begin?

You don't need to visit, plenty of agents will do a Quality Check for you. Before any trip though I'd start emailing.

How does it begin?

Find a supplier you think appropriate: http://www.globalsources.com/
Then email them with a text outline of what you'd like them to do e.g. material supply, tube welding etc.. then get NDA signed, then send drawings asking for quotes. Be prepared to answered questions around volumes, design tolerances, different skus etc...You'll also need to stump up for 'tooling' before production starts.

lawrence hello said:

Am I going to meet the right kind of people at trade fairs, or are they more focused to selling exisiting products they already make?

No, you can make good contacts at Trade Fairs.

lawrence hello said:

In regards to patenting, should I hold one before I approach manufactures or can this happen in tandem?

You'll most likely have one pending in a years time but yes, suggest you do.

lawrence hello said:

Sorry for the range of questions, obviously I'm not very far along the business road yet, and so I'd appreciate any advice or experiences you can share.

No bother....UK is a full of bright ideas that just need to be cultivated, GL with it...

Robin.

[mrmr96]

Saw an advert on TV for this website. No idea if it's any use or not:
http://www.alibaba.com/

ETA: For example, here's some Chinese bike manufacturers:
http://www.alibaba.com/suppliers/cycle/CN--1204---...

Edited by mrmr96 on Friday 25th September 15:23

[Windsorphil]

Protect yourself first, get the patent process underway.

As it's your first time you may want to involve a UK based industrial design agency who will help you design in IP and profit and have an understanding of the manufacturing process.

Most of these agencies will have experience in managing the manufacturing, but you should also go out and visit the factories, have a local agent help if you need it, after a couple of visits you'll be more confident being in places like manufacturing towns in China.

Look for associations and manufacturers interest groups, they'll help you with contacts, BS/EN standards, etc - in your case these folks may be useful - http://www.ba-gb.com/

Good luck!

Edited by Windsorphil on Friday 25th September 16:08

[Alex]

You don't have a patent yet? For that reason, Ah'm oot.

P.S. Good luck!

[EINSIGN]

I am involved in manufacturing in the UK and China. Happy to have a chat.

[lawrence hello]

Thanks for the answers! You've reinforced my view of the busisness forum here

robm3 said:

lawrence hello said:

I think this could stand a very good chance of being patentable.

Step 1. Do a patent search, use a patent laywer. If none similiar (you'll be lucky!)

Yeah that's me being quite optimistic I guess!

robm3 said:

To be honest your best bet is to approach a UK manufacturer, they can discuss your ideas. Ensure you have a patent pending and get them to sign an NDA. They'll probably let you know if it's viable. If it is a good idea they'll offer a licensing deal. This could be the easiest route to market and an easier income stream for you.

This is interesting, it's not something I've considered as much so far, I guess mainly because it's still at such an early stage that I feel like I want to do *everything* for this business haha. I presume that any such deal would be too specific to each deal's circumstance to really comment on how the relationship would work between the manufacturer and I?

robm3 said:

lawrence hello said:

I'm thinking obviously I should definately go to them at some point at least to look at the factory etc. but how does that begin?

You don't need to visit, plenty of agents will do a Quality Check for you. Before any trip though I'd start emailing.

How does it begin?

Find a supplier you think appropriate: http://www.globalsources.com/
Then email them with a text outline of what you'd like them to do e.g. material supply, tube welding etc.. then get NDA signed, then send drawings asking for quotes. Be prepared to answered questions around volumes, design tolerances, different skus etc...You'll also need to stump up for 'tooling' before production starts.

Again this is probably a wildly too specific question, but how much do tooling costs ammount to? What kind of percentage is saved when you shift between a UK manufacturer and somewhere such as China?

robm3 said:

lawrence hello said:

In regards to patenting, should I hold one before I approach manufactures or can this happen in tandem?

You'll most likely have one pending in a years time but yes, suggest you do.

Is IP theft by manafacturers at such an unproven stage of commercial viability at all common? Should this be a big concern or are NDAs pretty watertight the world over?

[lawrence hello]

EINSIGN said:

I am involved in manufacturing in the UK and China. Happy to have a chat.

Haha this is partly what's inspired me actually!

I'd be interested to hear about your personal experiences in working in either country, and how you'd compare them in terms of ease/cost/unforseen troubles etc. Thanks! Shall I drop you an email?

[Goochie]

lawrence hello said:

Is IP theft by manafacturers at such an unproven stage of commercial viability at all common? Should this be a big concern or are NDAs pretty watertight the world over?

I'm not a lawyer but I do send out several NDAs each week to European and Chinese factories. They will normally be drawn up in English law and therefore can only be executed under English law. There are specialist lawyers that will draft agreements and NDAs in Chinese law if required but it is rather expensive (I know a very good English chap based in Guangzhou China if anyone needs more info).

There are companies that "steal" peoples ideas, run the business for as long as they can then fold it all up just as it all turns sour. Unfortunately by that point they've already made a load of money from an idea they've stolen. Sometimes they succeed because the person who had the idea doesn't have the money to take them to court.

There are manufacturers who will happily talk to inventors without stealing their ideas. IP theft doesn't get you a very good name and soon everyone in your industry would know about it if you were a thief. In our industry (lighting and electrical accessories) there is a company with a 3 letter name starting with L who steal people's ideas - everyone else knows about it except the poor inventors.

We pride ourselves on not stealing ideas but working with an inventor to develop and manufacture the product.

Royalties in general are normally pretty low at sub 10% (often less than 5%) so you have to be confident you can sell sufficient volumes.

One off payments to buy a patent are also quite common. We've recently bought one for a 5 figure sum.

Try doing a search for "China" in the business sections of this forum, you will find lots of good advice. I'm sure "Maser Spyder" will be along soon - I know he has some good advice to offer on the subject as well.

Edited by Goochie on Sunday 27th September 23:05

[robm3]

lawrence hello said:

Again this is probably a wildly too specific question, but how much do tooling costs ammount to? What kind of percentage is saved when you shift between a UK manufacturer and somewhere such as China?

Is IP theft by manafacturers at such an unproven stage of commercial viability at all common? Should this be a big concern or are NDAs pretty watertight the world over?

Tooling will depend on the unique parts needed for your product. Some aluminium dies for extrusion are only around $400 each but I'm thinking bike related extrusions will be fairly common.

Percentage saved naturally varies, on Friday I priced some textile products at US$.30 per metre vs US$.39 local. This will save that particular company circa £180K pa. Generally I've found 25%-40% is common, highest I've seen is 65% (all figures net Freight and Duty but excluding indirect costs).

IP theft is common however the Asian manufacturer always struggles with route to market in Western Countries (my view is based on what I've seen and the approaches for agency work I'm always getting) therefore they'll weigh up the pros and cons of stealing your design. Now if it's something that will sell shedloads in Asia then your idea will go 'walkies' shortly after sending the drawings. If it's an idea that only appeals to the Western Market then you've a stronger chance of retaining IP.

Speaking frankly I think getting the manufacturing is the least of your problems. Sales are king so shifting units in your intended market is what should be pre-occuping all your time. I'd suggest using some of the PH contacts here to help you. Think of it like a mini Dragon's den e.g. "PH Den"

GL

Robin.

Edited by robm3 on Monday 28th September 13:16

[lawrence hello]

Goochie said:

There are companies that "steal" peoples ideas, run the business for as long as they can then fold it all up just as it all turns sour. Unfortunately by that point they've already made a load of money from an idea they've stolen. Sometimes they succeed because the person who had the idea doesn't have the money to take them to court.

There are manufacturers who will happily talk to inventors without stealing their ideas. IP theft doesn't get you a very good name and soon everyone in your industry would know about it if you were a thief. In our industry (lighting and electrical accessories) there is a company with a 3 letter name starting with L who steal people's ideas - everyone else knows about it except the poor inventors.[/footnote]

How do people fair when they don't have the official protection of a patent?
Because I'm thinking that I fall so squarely into the box of 'don't have the money to take them to court' and that any patent I did hold, would be useless by myself simply because there'd be no way I could contest it.
Being realistic my idea isn't earth shattering, I do harbour suspicions that it could be patentable but I admit these could easily be unfounded, and I think work arounds and similar can't be too difficult even if I did hold a patent on it.

Is it worth manufacturing without a patent? I have no doubt someone here has done this, so how did it go?

[lawrence hello]

robm3 said:

Tooling will depend on the unique parts needed for your product. Some aluminium dies for extrusion are only around $400 each but I'm thinking bike related extrusions will be fairly common.

Percentage saved naturally varies, on Friday I priced some textile products at US$.30 per metre vs US$.39 local. This will save that particular company circa £180K pa. Generally I've found 25%-40% is common, highest I've seen is 65% (all figures net Freight and Duty but excluding indirect costs).

IP theft is common however the Asian manufacturer always struggles with route to market in Western Countries (my view is based on what I've seen and the approaches for agency work I'm always getting) therefore they'll weigh up the pros and cons of stealing your design. Now if it's something that will sell shedloads in Asia then your idea will go 'walkies' shortly after sending the drawings. If it's an idea that only appeals to the Western Market then you've a stronger chance of retaining IP.

Speaking frankly I think getting the manufacturing is the least of your problems. Sales are king so shifting units in your intended market is what should be pre-occuping all your time. I'd suggest using some of the PH contacts here to help you. Think of it like a mini Dragon's den e.g. "PH Den"

GL

Robin.

Edited by robm3 on Monday 28th September 13:16

Thanks for the figures, I know there's no way to really say, but always helps to have something numerical to play with.

Perhaps I am looking at this a bit too much as a step by step process (as in, idea, prototype, manufacturing, sales) haha. I am thinking about routes to market but yeah, perhaps not enough yet. I'm still thinking along the lines of how big I should even aim for, whether to be a small 'lifestyle' business, selling directly in small numbers, or whether to go for much wider distribution and the volume and problems that come with that, or even whether there's the demand for such a big prescence (current positioning by other cargo bike builders might suggest not), so maybe that decision makes itself haha.

Thanks for the tip though, perhaps I was getting ahead of myself a little bit

[Goochie]

lawrence hello said:

How do people fair when they don't have the official protection of a patent?
Because I'm thinking that I fall so squarely into the box of 'don't have the money to take them to court' and that any patent I did hold, would be useless by myself simply because there'd be no way I could contest it.
Being realistic my idea isn't earth shattering, I do harbour suspicions that it could be patentable but I admit these could easily be unfounded, and I think work arounds and similar can't be too difficult even if I did hold a patent on it.

Is it worth manufacturing without a patent? I have no doubt someone here has done this, so how did it go?

If you dont have any patent and your idea is a good one, everyone will be making their own variation before you know it. We have a number of patented ideas that have made a lot of money - Because of that, other companies spend a lot of time trying to work out how to get around our patents - to be fair, we have occasionally looked at someone else's patent and used it as a basis for making an improved product. SO even if you did have a patent, there is no guarantee that someone couldnt steal your market share perfectly legally.

You can get patent protection insurance, I recently met an inventor who had this and I think it came through HSBC. The policy provided legal protection to a given amount if someone "stole" his patent.

Defending a patent can cost £100k easily - However, if you win or reach an out-of-court settlement you can recover this cost from the third party.

Is the form of the product fundamental to it's function? If so, you could consider a EU Registered design. These are cheap when compared to a patent and could offer a degree of protection. However, they relate more to the "overall impression" of the product and not the construction or particulars that could make your design better than another.

[broadhat]

Trevor Baylis Brands (him of the wind up radio) helps people get started and to understand intellectual property rights. No idea if it's any good or not but probably worth a look.

[10 Pence Short]

I work in the composite kayak industry, where production is often outsourced from the country of origin.

As a small business with little money, it's very easy to find yourself ripped off with no realistic prospect of financial recompense.

Assuming you had the funds to fight a case and win, the company found guilty would simply fold and begin again under a different guise. This would leave you back where you started without a resolution to the problem.

Choose who you do business with very carefully, especially in China/Eastern Europe.

[Goochie]

broadhat said:

Trevor Baylis Brands (him of the wind up radio) helps people get started and to understand intellectual property rights. No idea if it's any good or not but probably worth a look.

We get several new product ideas each month from these guys - I'd consider using them if I was in your position.

[Thurbs]

Along with protecting the IPR, the other very important thing to establish at the moment is whether you have a product that people want to buy.

Why not try your pitch and product at local cycle shops. Push to try and get some kind of commitment to stock your product. This will give you invaluable feedback on your concept, design and price point before committing too much time and money to the project.

[lawrence hello]

Sorry I haven't replied for a while, I've been moving house (by bicycle ironically haha).

I find the Trevor Baylis thing interesting, as I'd looked at it before and kind of written it off in my head as one of those kind of 'INVENTORS GET RICH NOW!' kind of schemes that used to be on tv a few years ago. But maybe this is a bit better? Does anyone have experience of working through them?

For now I think my plan looks like to just build one and work out the technical side of things, even if there isn't a great market for them in the long run, I want one for myself as I need a way to carry things around cheaply