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Hiring a Private Label Manufacturer in China- What to Keep in Mind

By Jesus David Cano Romano
June 13, 2016
private label manufacturer

A private label manufacturer is a company that manufactures private label products with the brand name and logo of another company. The primary benefit of private label manufacturing is that you can create a brand without putting an enormous amount of time and money into building up factories and production facilities. Moreover, you can launch a product faster.

Over the years, private label manufacturing in China has become a standard way for businesses to cater to the local, national and even international demand. However, though importing private label products from China may be a shortcut to success, it remains a far more complex and challenging process than many people think.

Here are some factors that you should keep in mind before hiring a private label manufacturer in China:

Factor in additional costs over and above the production costs: Private label manufacturing is not expensive in China. However, the cost of a finished product depends not only on the direct manufacturing costs but also on other factors such as packaging costs, inspection and quality control, logistics, customs charges, taxes, etc. All these extra costs have to be factored in before getting to the final cost per unit. Also, small changes in logo size, product color, product design and specifications, etc. can have a large say in the final costs.

Understand that design and specifications have to be spelled out in exact detail: Design may sound easy but actually is the tricky part. Chinese factories are familiar with ‘make to order’ concept and do not change anything on their own unless specifically asked to do so. You have to provide each small detail about the design and product specifications. Otherwise, the product you get may be completely different from the one you had envisaged. You have to tell them the exact design, specification, print type, color, placement and all other details. Only then are you likely to get the right product.

Infringement risks when buying factory products: Buying factory products from China is not safe from a legal standpoint as they are Original Equipment Manufacturers, and not Original Design Manufacturers. This means that they are more into manufacturing instead of designing or developing. As such, the base product upon which your labels are affixed may be an exact copy of an American, Japanese or Korean product, and you may be hit by lawsuits even before you realize what had happened. So, make sure you research the product well. Look for similar products in the market and ensure your items are not infringing any patents. One quick way around this is to hire local experts who can inform you of any such risks.