You want to find a Chinese supplier because you need the price advantage that China offers, but you are worried that the supplier you will work with will start selling your invention to other people or that others will start producing and selling your invention. Basically, someone might start competing against you with your own invention.
What you need is a strategy that will do the following:
– select a supplier that is more likely to be trustworthy
– motivate the supplier to stay trustworthy and
– remove any opportunity for the supplier that would come from being untrustworthy.
A trustworthy supplier
In our experience, when an idea is stolen it is typically stolen by a trading company and not a factory. The reason for this is that factory owners are typically more interested in keeping their factory busy, and they are less focussed on marketing issues. In addition, factories are less likely to have competent English speakers to properly pursue the foreign market.
Therefore, it makes sense to find a factory instead of a trading company. However, not all factories are the same. Not only that, you still need to ensure that you have a competent factory as well as trustworthy.
The ideal factory is one of a medium size. Smaller factories will often lack the skill and competence to provide you with reliable supply without the need for constant attention and management. Larger factories are more likely to have experience selling to foreign markets, and thus they have the potential to sell your invention without your knowledge to competitive retailers or distributors. A medium sized factory provides you with the right balance between skill and isolation from competitive western retailers and distributors.
There is one issue of contention over the ideal factory regardless of size. That is their current product range: do you look for a factory that has experience making a product similar to yours or one that is completely new to the industry? In the first case, you will have a factory with a greater degree of expertise and connections with other possible distributor; however, they are also in the best position to take advantage of selling your product behind your back. In the second case, you will have a more trustworthy supplier; however, you will need to be correct and specific about what is to be made and you will also need to find all distribution avenues. The answer to this question must be congruent with the other elements of the strategy and fit with what you feel comfortable with.
There are two basic ways that you can encourage a factory owner to be trustworthy: solid and reliable orders, and a good relationship with them.
The best approach is solid orders. If you provide a steady number of orders then a factory owner can keep is employees busy, and his factory will be profitable. This is what a factory owner likes so he will be content and more trustworthy. Therefore, be certain that you have a solid business plan and that you are as certain as you can be on expected sales. How to start an invention idea?
A good relationship can also help. However, this really can only help if you are keeping the factory busy. If your involvement with a factory is more hassle than it is worth, then you will likely damage a good relationship and there is little you can do to improve it. However, if you maintain a steady stream of orders, then maintain contact with the factory owner and working on your relationship can further encourage trustworthiness.
Remove opportunitiesHow to start an invention idea?
Sometimes it might be difficult to find a perfect supplier. And just because you have the perfect supplier doesn’t mean that another company can’t still buy one of your products and reproduce it. Therefore, it is often good back up to make it is as difficult as possible for your invention to be sold without you being involved.
Patent protection is one obvious tool. When people here that a product it patented, they will think twice about copying it. The trouble is that patents can be costly, they only cover one country or region at a time and they can require considerable legal might to enforce. Therefore, sometimes patents are not ideal.