If you’re like a lot of people in the western world, you probably work a job that requires a lot of time and energy, leaving little time and energy left at the start and end of the day to work on your business.

But what if there was a job somewhere in the modern world that required only 1/3 of the time and energy to do, but paid the same amount of money respective to the country you were living in. That would mean that the other 2/3 of time spent working would be freed up to work on your business. What is this magical job? Welcome to English teaching in China.

How a Job Teaching English in China Frees up Time and Energy

The average job in the US or Canada is 40 hours per week plus commute, in exchange for money to live. If you work fewer hours you likely won’t have enough money to maintain a decent standard of living, if you’re employer lets you work fewer hours at all.

In China, as a foreign English teacher, you can work as little as 10-20 hours per week and still make plenty to have a decent standard of living, leaving you much more free time to work on your business. Many English teachers live in an apartment on campus or near the school they work for so the commute to work is also quick.

Furthermore, most jobs in the US, UK, Australia, or Canada don’t allow you to take more than a few weeks off per year, further limiting the time you have to work on your business.

In China however, foreign English teachers at colleges have a full 4 months of paid vacation per year that can be used towards working on your business. 

In the US and Canada with 40 hours of work per week plus 2 weeks of vacation per year: 40 hours / week x 50 weeks = 2,000 hours spent earning enough to live per year.

In China with 20 hours of work per week plus 16 weeks of vacation per year:

20 hours / week x 36 weeks/year = 720 hours per year. If you work in a training center or tutor students privately you can make more money per hour but you won’t have long paid vacations.

So as you can see it only takes about 1/3 of your time teaching English at a college in China to make all the money you need to live off of per year. With the rest of the time and more energy, you are free to work on your business.

Cost of Living in China

On the low end, in your home country you may need to spend $1,500-$2,000 just to get by:

• Apartment + utilities/internet: $500-$1,000
• Car payments, insurance, gas: $350
• Phone: $50
• Food: $300
• Entertainment: $200
• Other: $100
• Health insurance: $100-$300

In China the cost of living is only about $1,000 on average:

• Apartment + utilities/internet: $500
• Transportation (taxi, bus, electric bike): $70
• Phone: $30
• Food: $200
• Entertainment: $50
• Other: $50
• Health Insurance: $100

Requirements for Teaching English in China

In China, every college’s requirements for foreign English teachers are different. Almost all colleges require a college degree. Many colleges now require teaching experience, but there are still many that do not.   

If you do not have teaching experience, there are many schools that will still hire you as long as you have a TEFL (Teaching English as a Foreign Language) certification. Such a certification can be obtained by going through a 40-hour course. You can read more about TEFL here and about the training here. Coursera also has a cheap TEFL/TESOL certification now. Finally, some schools will not require either TEFL or teaching experience.

The most important requirement with all schools though is the college degree. Chinese schools take degrees very seriously and if you have a Masters or PhD they will pay you even more.

Job Boards Where You Can Start Looking for Jobs Teaching in China

There are lots of resources for finding jobs teaching in China online, but below are some of the big hitters. They list all types of jobs from kindergarten, to training centers, to high schools and colleges.

http://www.eslcafe.com/

http://www.anesl.com/schools/index.asp

http://www.goabroad.com/

https://www.gooverseas.com/

https://www.teachaway.com/

In addition to looking at the requirements, it is important to look at the benefits – whether a round-trip plane ticket is included and whether they provide housing or not. A round-trip ticket from Europe or the Americas usually costs around $1,500 though I have seen flights from Chicago, IL USA to China for as cheap as $500 on Hainan Airlines. See below.

Other Job-Finding Resources

Besides job boards, it is a good idea to speak with other people who have taught English in China as you will sometimes be able to get a job through them and can also ask them about their experience. The Enter China community has many members who have made the leap to China.

Check with the Asian Studies department wherever you went to college or go to college in order to find someone who knows about programs that send people to China to teach English.

Visit a Confucius Institute in a big city near where you live. Confucius Institutes are schools set up by the Chinese government around the world where anyone can go and learn about Chinese language and culture. People there also often know about work opportunities to teach English in China. Do an online search to find the school closest to you.

Salary

According to John Mullen, an Enter China member, and former China English teacher, colleges and K-12 schools typically pay around 6,000-8,000 RMB ($800-$1200) per month but they will also give you an apartment with utilities paid for, 4 months paid vacation, and a round-trip plane ticket. You will need to work 15-20 hours per week usually and need to do a bit more lesson planning than you would if you worked in a training center. The first semester may also have more classes than the second semester.

Rico Ngoma, CEO of Source Find Asia, Co-Host of the Made in China Podcast and long time Enter China member, taught English at a training center and was paid 16,000 RMB per month (about $3,000). Although he technically worked 40 hours per week, when there were no students at the training center he had free time to work on his laptop and still get paid.

Rico also said that if you were to work for a training center or as private tutor by the hour you could make 200-400 RMB per hour depending on experience, meaning you can make up to 4,000 RMB per week by working 10 hours.

*Note* while the pay is higher you’ll often have cancellations and you don’t get paid for those. Higher pay but you also have to account for consistency when you’re starting a business.

Unlike colleges, training centers may not provide housing or plane tickets, and likely won’t provide any substantial paid vacation.

Health Insurance

Although schools provide some medical insurance it’s not nearly enough. John had this to say, “You must get your own health insurance. My job only bought me basic accidental injury cover.” Lack of good medical insurance led to all kinds of issues when John got seriously sick.

I recommend purchasing extra insurance from an insurance company like Seven Corners. The cost is usually less than $100 per month and you can get treatment in first-world facilities like in Hong Kong.

Getting a Chinese Visa

Once you are hired at a school, they will help you with the paperwork for the visa process. Depending on the school, they may get a work visa (Z visa) for you or a student visa. Read more about they types of Chinese visas here.

What it’s Like to Teach English in China

Each school is a little bit different with which types of classes you will teach but in general they all revolve around “oral English” and getting your students to practice speaking English with you. Most of your students will have studied English from a young age, from middle school or primary school. However many have not had chances to speak with a native English speaker. If you’ve ever learned a foreign language you’ve probably noticed how much easier and more interesting it is when you have a native speaker to speak with and learn from. The same type of logic is at work in the Chinese classroom.

While teaching English in China you will play lots of games, have discussions, watch some films or TV shows, do role-plays, have contests, and participate in debates. You may need to correct exams at the end of each semester, which can take a few hours outside of class each week for a couple of weeks.

You will teach 2-6 hours per day depending on the day and how many hours you have that semester. I had one friend who taught only 2 days per week one semester and was able to travel around China and Asia the other 5 days per week. I also had one friend who worked 4 hours per day starting at 2:30 pm every day. Your schedule will vary.

Managing Your Time

When you first start teaching you will need to spend some time outside of class preparing lessons, which does take some time. You will likely have different groups of students though so you will hopefully only need to make 1-2 lesson plans per week. One semester I only needed 1 lesson plan every other week since I taught some many different classes.

If you have classes from 2:30-6:00 Monday-Friday, then you will have the entire morning and early afternoon free to work on your ODM business, visit suppliers in person and connect with your customers. Don’t forget you will also have the months of January, February, July, and August totally free while still being paid if you work for a college or K-12 school.

Creating a Personal and Business Network

Rico used the method described in this article of teaching English in China while starting an ODM business in order to start his own business. He started teaching English in December 2014 and was able to transition into his business full time in September 2015.

One of the most important things for success in starting an ODM business in China for Rico has been the network he gained while teaching English in China. In addition to being a job with a low barrier to entry in China providing lots of free time, teaching English also provides you with an excellent network for business and personal reasons. Rico’s first employees in his business were his former students.

When you first arrive in China you won’t know anyone or where to go or what to do. The friends you make at the school will be your first friends and likely your long-term friends while living in China. Some of my best Chinese friends from 6 years spent in China are those that I met my first day in China at the school I worked at.

You will be able to learn a ton about the Chinese culture, including the business culture from the friends you make at the school. Many students have great English and you will be able to hire them as ad-hoc interpreters for when you visit suppliers. Many students who study English have aspirations to do foreign trade work and so they will be perfect for helping you with your ODM business. Besides acting as interpreters they will also be able to help you with your business in other ways. My first two employees at my business in China were my business partner’s students.

Low Cost of Living Allows You to Transition into Full Time Business Faster

Because the cost of living in China is so low, you will be able to transition out of your teaching job faster than you could otherwise transition out of your job back in the western world. In China you can live comfortably on 6,000 RMB ($1,000) per month while maintaining a good standard of living. In the US you might need to make $2,000-$2,500 per month before you are able to work full time on your business.

Transitioning out of Teaching and into Your Business Full Time

With more free time than you’ve ever had in your life, you will make big progress in your ODM business and transition into working on your business full time faster.

Most expats in China either start with a business visa (M visa) or transition from a Z to an M visa after leaving their teaching gig.

You can read more about the M visa details on what is required here. The main thing you will need is an invitation letter from a company or institution in Mainland China. You can have one of your suppliers write a letter or write a letter from your own company if you have set it up in China.

With an M visa you will need to leave the mainland every 60 days. Many ODM business owners head to Hong Kong or Macao and then re enter the mainland the same day.

With the M visa you cannot collect payment while doing business in China. There are of course many legal ways to deal with this. You can have money deposited into a bank account you set up in Hong Kong or your home country.

Start Your ODM Business While Teaching English in China

As a native English speaker you have an unbelievable opportunity to teach in China at a job that allows you a high standard of living without putting in much time and energy. When you are building your ODM business you should really consider this amazing opportunity.

About the Author

Nick Lenczewski (Len-chess-key) is the author of Ultimate China Guide: How to Teach English, Travel, Learn Chinese & Find Work in China. He helps foreigners find a job in China and writes and makes videos about it at China Life Files. You can download the first 30 pages of Ultimate China Guide here.

The Cash Flow Issue For Product Based Businesses

Let’s discuss cash flow. Cash in any business is key, but especially essential in an inventory based business. You need inventory in order to make sales. If you’re out of stock, you’re out of luck (unless you’re running a crowdfunding campaign, cha-ching!).

So it is essential to be able to have money in the bank to pay deposits and final payments to suppliers in order to ensure your supply chain is on time and your customers are getting their products.

The issues come up with bank fees, currency controls, and just overall fear of money getting lost or stolen in the process. Today we’ll dig into some of the ways to mitigate it.

International Bank Wire – The “Good Old Fashioned Way

Most likely, your first payment to a factory will be by bank wire. Go down to your local bank (or, if they are high tech, allow you to do them online) and fill out the Chinese company name, SWIFT code, bank account, and address (if required). Normally this costs in the range of $35 to $55 USD fixed per transaction. Yes, this sounds like a lot, but if you are doing an order of $10,000 USD and 2 payments – that is $110 USD total, for a percentage fee of 1.1% – much less than Paypal or credit card payment.

While no one likes paying bank fees, this is a clear cut, tried and true method. If you are doing regular bank transfers on a regular basis, some of the methods below may be worth investigating.

The Ultimate Way – Open A Chinese Company

Let’s start with the most ideal way, but also the biggest commitment of time and money: opening your own Chinese company. Many times this is done with a WFOE (wholly foreign owned entity) structure, which basically means it is 100% foreign owned – by a non-Chinese person or company.

Another option is having a local Chinese partner, and setting up a joint venture (JV), yet you need to make sure you trust this partner, as we normally say, a business partner is more involved than a marriage in some cases!

By opening your own Chinese company, you will have a Chinese business bank account where you can wire funds from overseas, and have the money legally converted into Chinese Yuan (keyword: legally) to pay your suppliers, staff, and other business costs.

Using a structure like this, you have ultimate control of the currency, the payment timing, and tax treatment. But like Uncle Ben says in Spiderman, “with great power, comes great responsibility” – and having your own Chinese company will mean more upkeep. You’ll need to keep a Chinese business address, file taxes monthly, yearly audits, and more. So we normally only advise this when your company has grown to a certain level. The cost of lawyers or agents ranges in the thousands of dollars, and between company setup and banking it will take months to process.

Having a Hong Kong Business, and Paying Suppliers in HK

The second best investment is a Hong Kong company. This is an investment, but nowhere near as big of an investment as a Chinese company (WFOE). Having a Hong Kong business bank account is often seen as the golden ticket. You can ask your Chinese factories if they have Hong Kong banks and oftentimes they do.

Using a HK company then can allow you to manage your cashflow in the following way:

1. Have your “investment money” for buying inventory stored in HK.
2. When you need to make a 30% deposit to a supplier, if they have a HK bank, it is often same day or next day for little fee (or no fee if same HK bank, such as HSBC).
3. They deal with getting the USD into Chinese Yuan when they want to.

This has been a common strategy for many product based businesses over the years. They have their Asia based company in HK, and pay suppliers in China, or even other countries in Asia, and then have their Western country company (USA, EU) to collect money from customers.

Note/disclosure: I’m a business consultant and blogger on all things Hong Kong www.globalfromasia.com, so I am a bit biased towards leveraging a HK company. As everything in this blog post, do your own due diligence and cross-checking before making a big decision such as opening a new entity and bank account, and don’t do it to hide from your own government and tax department.

Hong Kong for decades has been a haven for import/export companies buying from China and selling to the West. Its English legal system, globally recognized multi-currency banks, and proximity to Mainland China has been the perfect combination. Yet we also have noticed banking to be much more strict, due to some business people taking advantage of the ease of doing business there. So have a good business case to prove to the banker before applying.

Using Third Party Payment Providers

There are quite a bit of payment providers nowadays to help you receive and send money as an e-commerce seller. Such popular solutions like Payoneer have allowed Amazon sellers to receive their funds and then be able to send them to their international bank account, or directly to a supplier for a payment.

You can also use Remitsy, which helps you send Chinese yuan to Chinese suppliers without needing your own Chinese RMB bank account. Doing this can often help bargain a lower price with the supplier, as they don’t need to add in extra margin for USD/RMB currency risk.

Remember, that China operates in their controlled currency, the Chinese Yuan, and factory bosses need to pay their workers, rent, and subcontractors in this currency. By having the ability to pay them in their home currency, you can help them mitigate the risks of currency fluctuations between the time the product quotation is sent and the order is shipped (often a few months in between).

In addition to currency risk and exchange rates, there is taxes. It is a bit out of scope for today’s guide, but many in China have heard of fapiao when at a restaurant or buying something. Exporting products from China has similar process, basically in the form of a tax rebate from the Chinese government. To explain as simply as possible, this is due to the goods being taxed upfront, rather than added once the end customer buys it (sales tax). The factory should file for a tax rebate once the goods are exported, as these goods were not sold “B2C” and instead “B2B” to a foreign country and China does not tax that. This is a conversation you should have with your factory, and they will be a bit surprised when you even mention you know this terminology.

Again, knowing is half the battle. By showing the factory you are experienced and have been through the process before, often they will be less likely to try to add extra charges to you.

Different For Every Situation – Don’t Let Payments Freeze You

Payment is a massive industry and can get to be your full time job if you let it. As a product based business owner, you need to focus on what matters, getting quality product and building your customer base and distribution. Be aware of the various ways of sending payment, but if you are paying some extra fees here or there – try to keep a big picture and just move forward tweaking the model.

How are you currently sending payments? I’d love to hear in the comment section below.

Niche site, software products, dropshipping, Amazon FBA, and on and on and on.

They are all valid business models but if you’re not doing the RIGHT first step then you’ll never be able to buy the Ferrari and stay at that fancy-fancy hotel.

So, then you thought to launch your own Kickstarter campaign or start a line of men’s fashion wares.

But, you don’t want to launch to crickets again like the last business endeavors.

In this series of 2 articles I’m going to tackle validation.

What is validation?

Glad you asked.

In it’s most simple form, it is knowing that a product will sell before you ever manufacture a single unit.

So many people come to us ready to make their first order run of 500 units and just see if the world will buy them.

But here is the reality…

Manufacturing a product that is a money making machine is all about the time and effort put in at the beginning to make sure the market wants your product.

Firstly knowing what to look for and finding the source of good ideas, and secondly ensuring the idea is a fool proof money making machine.

The hard part for us impatient entrepreneurs is actually putting in the time it takes to properly prove an idea is valid and ready to be sold – and make loads of money.

Because, validation has no timeline.

Don’t move forward with a product idea until you KNOW your product will sell heaps AND you’re able to answer why it will sell heaps with data to back it up. (Disclaimer here: if it’s taking you months and months to validate a single idea it might be time to move on from that product.)

Before we get into the bulk of the article I’d like to share a video Rico and I recently made walking through the idea generation process. Take a gander below and then finish off the article for the nitty gritty details and secret tricks.

How to Find an Idea That is a  Money Printing Machine?

Passion or Profit

Inevitably when setting off down the entrepreneurial path the question comes up, “should I start a business around a topic/product I am passionate about or should I pursue a niche with the highest potential for profit?”

Are passion and profit mutually exclusive?

With passion you pursue things that are within the niches that interest you.

An example of this would be that problem you noticed on your last spelunking expedition.

You love to go spelunking regularly and every time you go you notice that one thing. You catch yourself saying often, “if only this product existed it would make this so much easier.” This is an example of passion leading to product business.

Because it’s your passion you most likely have a much clearer picture of the market and the viability of selling the product you’re thinking of along with how many people would potentially buy the thing.

If you wanted to get hyper focused and create a product within your passion that meets very specific needs – take two of your passions and merge them together.

Say, you’re a parent with younger children.

You also love spelunking. But every-time you take your kids spelunking you encounter a certain challenge.

Cross combine the niches to get hyper specific and find a problem with a real solution. (We’ll get into this more below.)

With a profit focus the niche has no sway – anything is fair game as long as it rakes in the big bucks.

Imagine being hunkered over a computer busting out the spreadsheets and going to town with the research. This is just purely a numbers game and doing the research to find maximum opportunity.

Something to consider here is your drive and willingness to continue and discipline yourself even when the work is not interesting.

As I asked above, are the two approaches mutually exclusive?

If you pursue a passion are you forgoing potential greater profits elsewhere?

If you pursue a profit approach are you selling your soul to the profit monster, never to return the same again?

The good news is they don’t have to be mutually exclusive. There are opportunities to build amazing products and make awesome money in just about every niche.

It’s a question of how much effort is put into the research. The idea generation and validation phase is all about solid research to maximize your potential for attracting numerous customers to your new product.

If you’re not doing the research correctly then no matter if it’s your passion or not the product will most likely not succeed. Let’s looks at how to find a solid idea and then how to validate that idea will sell to actual real live human beings.

You may already have a product in mind, if you do, skip down to the validation portion of this article. (Or, it might behoove you to read the following portion to make sure you were rigorous in your idea selection.)

Are you solving a real problem?

First things first, identify the clear problem that needs to be solved.

In the passion example above about realizing something was making the spelunking experience less great and if there was just this one thing then the adventure would be so much better. That’s solving a problem in a market.

If you want to sell products you have to solve real problems. If others can’t figure out what the need for your product is then you are not solving a problem.

And if you’re not solving a problem then you need to fill a gap – is there some way you can make the market 1% (or more) better with a unique angle?

This would be a pre-existing problem with a pre-existing solution and your addition to the market solves the problem in a better way.

Example of this would be a travel coffee mug that holds heat and keeps the coffee fresher for longer than anything else on the store shelves.

Coffee travel mugs have certainly existed for a long time but they could be better – aka there’s a gap in the travel coffee mug market. Fill that gap and you will be rewarded.

Locating the Winning Product Ideas

Here’s a universal truth – everyday people group themselves together around commonalities and preferences (cars, political ideals, soccer teams, and pop stars).

A good way to use this to your advantage as your searching for that money generating machine is to look at the trends within these commonalities and preferences – find out if more and more people are increasingly interested in something.

Get a pulse for what is popular or trending right now by going to product curation sites like Cool Material, Supercrompessor, and Product Hunt. Use these as a guide to see what people are talking about, what they crave, what they aspire to, are there any commonalities, do any of the products fit within a niche you’re passionate about, just see what people like. Then take that information and look at the data.

Look at growth market predictions through business new sites. All the time Bloomberg or Fast Company and the like are making predictions about what the future holds. Which technologies are the biggest thing. Make note of that and follow the data to see if the buyers are really following those industries/markets. Here’s an example that one of our Enter China members posted within the private member’s area.

Interpret the Data

Once you feel like you’ve found an idea or niche market that looks promising go see what the data says.

One of the best ways to do this is to head over to Google trends and see if the search volume is trending upward.

Google trends doesn’t show the actual volume of search but it does show the search data compared to previous searches for the same term. So you can see if people are searching for this concept, product, or market more and more.

For example I went over to Cool Material and poked around for less than five minutes and found a ring activity tracker. Activity trackers are all the rage with the likes of fitbit et. al, but it had me thinking, is this industry dying out? Is it oversaturated?

So I went over to Google Trends and typed in “Activity Tracker” and this is what trend looked like:

With Google Trends we can see that the peak of interest for the term “activity trackers” was actually this past December (2016). (As an interesting aside do you notice how the term peaks at the end of every year? New year’s resolutions anyone?)

The trend is definitely upward. Although the growth has slowed over time it seems there is no sign of downward movement. This would definitely be an interesting market to present a fresh solution (filling a gap) to the market. Especially with the world’s fascination with wearable connected tech.

After you do this with a few different ideas you’ll have a feel for which market or product niche you’d like to pursue more seriously. At that point find out what the winners are doing.

Who is a winner?

A company selling a product that’s bringing in a lot of money.

How do you find that out?

Here are two quick options.

Facebook ads – type your product idea into the Facebook search bar. Find a post that is an ad or was an ad.

You can tell an ad because typically they will display the product with a link to purchase and has a substantial amount of likes and share. If the product has an unusually large amount of likes and shares most likely the company paid for that post. If they paid money to get the clicks then we want to know if the ad worked for them.

So find a post that fits that criteria and click through to the website.

For example I typed “timepiece” (I’m in the watch industry – this is also great for competitor research) in Facebook search.

Scrolled down to “public posts” and found this ad post

See the 12k likes, 287 comments, and 112 share? AD!

So I clicked the link.

I was redirected to clusewatches.com

Now this is where things get cool – this is the insider knowledge.

I then navigate over to Similarweb.com a website that will tell you traffic volume, referring websites, traffic sources, and a whole host of other information on pretty much any other website out there.

I typed in clusewatches.com in Similarweb and was met with this…

Over the past 6 months they’ve grown from 500k visitors per month to over 1.3m visitors in December!

That means they are the #35,333 ranking site in the world – #4,114 in France for good measure!

But where is all this traffic coming from?

They have a pretty good spread of traffic sources. But over that same 6 month period 13% of their traffic came from social (ADs!).

So what does any of this tell us?

This means that if Cluse Watches is able to maintain their ad spend – which is not cheap – over a 6 month period then it’s probably financially worth it form them.

The market wants what they are offering.

Whatever product you are researching you can use this same trick to see if companies are spending money to acquire customers and if those customers are actually buying (aka companies keep spending money on ads).

Crowdfunding campaigns – another great option for finding products that are winners (again, that means products that are bringing in the big bucks) is to check crowdfunding websites.

This process is fairly simple.

Navigate over to Kickstarter or Indiegogo.

On Kickstarter select “Explore” in the upper left corner.

Sort by “most funded.”

Then pay attention to the kind of products that are doing really well on Kickstarter. Which categories are they in? Do you notice a trend towards a certain category taking the lion’s share of highly funded projects?

Use this to help inform your selection process. Especially if a particular category or product matches up with your interests and passions. Green light!

We actually have a blueprint on Crowdfunding and finding winning products that will raise a lot of money on crowdfunding. It’s the same blueprint I used to raise $85,000 on my campaign, other members of Enter China used it to raise over $200,000 on their campaigns. In the blueprint among other things we show you how to use one tool that will streamline your product research substantially. If you’re interested in that blueprint you can check out the details here.

The last method I want to mention is Amazon. Of course everyone knows Amazon and it’s because Amazon sells A LOT of products. So why wouldn’t we check what’s selling well on Amazon?

Now you can immediately jump to the best sellers but you are likely to be competing with major brands on commodity-like products.

The better approach is to find a niche via the methods mentioned above and then use Amazon to research the sales volume as another form of validation in that particular product or niche.

There is a tool called Jungle Scout (the link is to a video I made explaining Jungle Scout and how to use it) that will show you the sales numbers and total revenue on almost any product on Amazon! This one is a game changer for product research!

Ok, after all that searching around for a product that you are excited to make and release into the world you need to lock down your premise.

What does that mean?

Why is your product uniquely positioned to solve the problem or fill the gap? (share in the comments)

How many people identify with the problem you’re solving? (also, share your answer in the comments)

We already looked at how many people are interested in specific products above. The larger the pool of people identifying with the problem you solve the higher likelihood you will make a winning product.  

So go out there and find the winning product ideas and once you’ve got your idea you think is a good pick come back for round 2.

I’ll be sharing everything validation and making sure people will pay money to buy your product!

One of the most asked questions we get emailed or Facebook messaged is “What is Enter China?”

“Is it a course on manufacturing?”

“Is it a community for the new product development process?”

“Is it simply a blog on business culture in China?”

“What is the benefit of even joining Enter China? Can it help with my crowdfunding campaign? Or help me navigate Canton Fair?”

These are all questions we have received in some capacity.

Fair enough. It means we can do a much better job in explaining exactly the value and what it is we’re offering.

So with this post we’re hoping to lay the questions to rest and give you a clear and concise answer. And there is no time like the new year to explain things afresh.

In short (TLDR) Enter China is all those things.

But, you might be asking “What does that look like?”

Let me tell you…

Making ‘Made in China’ accessible

You know that feeling when you read everything out there on a certain topic available on the interwebs and then you STILL feel like you have no idea, much less what to do next?

It’s like this often, you have a great idea that you think will make an excellent business, or at least make a butt-load (actual measurement) of money, then you go online to figure out how to make it happen.

Now, there are a million and one ways to make money be it info products, drop shipping, stock market, flipping houses, etc. etc.

Given that you’re reading this blog there’s a high likelihood the method you’re looking to use is to design and sell your own unique physical product.

So you log on to the Googles and type something like “How to manufacture a product idea”.

What happens next is nothing short of information overload.

On comes the barrage of blog posts, YouTube videos, FB groups, and Reddit posts about Alibaba, NNNs, quality control, product regulation, Canton Fair, idea generation, shipping, customs, and on, and on, and on.

And often times the order in which you read the information is often like that too – completely out of order from when you should approach a subject.

By the end of it all you feel like you know everything and somehow… nothing.

This is a real problem that many aspiring entrepreneurs face – including ourselves when we first set out on this entrepreneurial journey.

It’s because we learned about all those topics the hard way, by just doing them and making mistakes that we realized there has to be an easier way.

In creating Enter China our goal was to figure how to simplify the learning curve and make the new product development process as accessible as possible.

To explain manufacturing in China in such a way – and create an atmosphere to ask questions in such a way that anyone with or without an idea could get a product made in China.

With that goal in mind we set out on this a journey to create simple yet robust materials that could be read and understood in such a way that the path to manufacturing success is clear.

Enter… China

The end result is Enter China as we know it today.

But… that end result didn’t come without challenges. Namely, how do we limit information overload at the beginning and ensure a progression of learning that leads to a finished – newly manufactured – product that YOU are proud of.

The answer to this challenge was to clearly organize and deliver our core materials in a carefully timed manner.

What does that mean?

At the moment we have 7 step-by-step blueprints – basically holding your hand through very specific topics.

Here’s the list:

1. Product Idea Optimization
2. Intro to Manufacturing
3. The Factory
4. Prototyping
5. Placing Orders
6. The Manufacturing Checklist
7. Crowdfunding Campaigns

There is no reason to read all of this information at once, even though it is all fantastic information.

Our training philosophy has always been that people learn best through a solution or guide when that information is most relevant to their current situation.

For the Enter China member that means receiving carefully timed emails with links to specific sections and portions of the blueprint depending on where you are in your journey.

With over 200 members we have a very clear idea of the time it takes to develop and validate an idea, or the amount of time to find a factory, submit a sample request, or place the first order.

Our members have literally been manufacturing case studies for us.

We use our own experiences and these member case studies to know when to time the email disbursements to fit exactly where you are in the journey to new product launch.

Along the way we introduce you to the community.

Fuel for the Engine

At the end of every email you will have a very a clear action step.

A part of that action step is checking in with the community.

This is for 2 reasons:

1. To hold you accountable to achieving the goals you set for yourself.
2. To get real-time feedback

Knowing that you have people around you that are doing the same thing makes you feel a little less insane in the roller coaster ride of product entrepreneurship.

In some cases other members are just a few steps ahead of you, so they’ve been where you were just a short time ago and know exactly how to approach certain challenges.

I like to think of it as fuel for your business engine.

And it’s not the wrong type of fuel. This business machine requires diesel and you don’t need unleaded.

Mind the metaphor.

But, seriously. If you’re poking around on the web trying to get help from people who aren’t aligned with the specific type of business model you are pursuing how do you expect that advice to get you very far?

You need the right fuel.

That is exactly what the Enter China community provides as you will be surrounded by other entrepreneurs pursuing the same unique ODM (original design manufacturing) physical product type businesses and going through the same new product manufacturing process via China.  

So to summarize at the end of every EC program email you will receive a clear call to action to report back to the Enter China community.

However, even beyond that we get much more individual.

Finding a Manufacturing Inner Circle

Middle of last year we asked current and future members what they wanted most out of the Enter China community as they built their physical product businesses.

The response was unanimous in almost every way.

EC members wanted accountability.

That kind of accountability that comes from personalized attention and follow up.

To meet this need we put together a mastermind rush program.

You’ve probably heard of masterminds; but it seems like in entrepreneurial circles everyone does masterminds a little differently.

Which is completely fine because they all serve the same purpose – to keep members focused on the goals they set out to achieve.

But for the sake of clarity let me share how the EC does masterminds.

For the most part all of our masterminds consists of 4-6 other members.

Each week all the members share their biggest challenge, their biggest opportunities, and their progress from the previous week.

Then there is a short 10 minutes Q&A section where other members can clarify anything that was said.

We follow a hot seat structure – meaning each week a new member of the group is on the hot seat on a rotational basis. The hotseat member gets 15-25 minutes to bring questions and concerns they have prepared to the group for the group’s input and help.

After hotseat each member shares their one big thing (or goals) for the week.

And then it’s final comments and goodbyes.

These are very focused – get stuff done – groups.

These are not times to catch up and chat personal stuff. This is all business focused.

Not because we don’t like catching up with other members but because everyone in these manufacturing inner circle has a common goal to see their business succeed.

Having this level of personal attention and accountability from others doing the same thing is invaluable to growth.

At least our members think so.

Hell ya, I love it! There is great value on every call.” – Sean in Beijing

We have a great group, we communicate with each other often and make sure we are on the same page always.” – Jose in New York

Having my mastermind group has been a major factor in helping me to launch my product and make my first sale.” – Shlomo in Israel

And it doesn’t stop there.

Any chance we get to mastermind with other members, we take it!

Twice a year the Canton Fair comes to south China in the city of Guangzhou. In the Spring and in the Fall.

You may have heard of this massive trade fair. It’s actually the biggest trade fair in the world.

At Canton Fair you can quite literally find anything you would want to manufacture.

We take this opportunity to have a private mastermind with our members and then help members think through exactly how to maximize their time at Canton Fair to get the most benefit.

To bring it all back around.

What is Enter China?

Yes.

We are a program.

We are a community.

We are a content machine.

But, most importantly what I hope you see is that we are people focused.

Our aim is to help entrepreneurs (aspiring and established alike – like yourself) to have a successful physical product business you can be proud of.

A business that you built.

It excites us greatly to be able to meet other entrepreneurs looking to build great unique ODM (original design manufacturing) businesses.

If the above explanation left out any questions you have about Enter China just send us an email at support@enterchina.co

We would love to talk to you.

Be like water making its way through cracks. Do not be assertive, but adjust to the object, and you shall find a way around or through it. If nothing within you stays rigid, outward things will disclose themselves.

Empty your mind, be formless. Shapeless, like water. If you put water into a cup, it becomes the cup. You put water into a bottle and it becomes the bottle. You put it in a teapot, it becomes the teapot. Now, water can flow or it can crash. Be water, my friend.” – Bruce Lee

You might be thinking, “Did he really just open this article on contracts in China with a Bruce Lee quote?”

I did…But this in my opinion encapsulates doing business in China and how you should view agreements perfectly. I’ve learnt this by being based in China fulltime since 2014, managing mass productions orders worth 6 figures in my consulting company Source Find Asia, interviewing various China experts on the Made in China Podcast, and being surrounded by a community of over 200 China entrepreneurs, called Enter China – which I’m now partner of.

I decided to write this because of a serious debate we had within the community on whether contracts matter in China. I have my own experience with this but, I also took the time to interview four “China vets,” with a collective of close to 40 years of experience doing business in China.

Throughout this article I’m going to reference their thoughts and show you what the most common documents are when dealing with Chinese manufacturers, what information you should have listed in your agreements, and what the value of having them in place is.

So Do Contracts Matter in China?

A few days ago I posed that same question to Nick Ramil, part of the founding team at IoT accelerator Brinc.io, “At the end of the day if Apple can’t defend the iPhone, if Michael Jordan couldn’t defend his name – quite honestly, they’re more or less the equivalent of toilet paper.”

Believe it or not that’s a yes…contracts do matter, just definitely not in the way a typical contractual agreement would in most countries outside of China.

What Contracts to Focus On and What Are They?

Non-Disclosure Agreement

The non-disclosure agreement (also commonly known as a confidentiality agreement), is a pretty straight forward contract that lists two parties wishing to share private information – that should not be disclosed to outside parties.

When to Use & What is The Purpose?

If you’re working with an ODM (Original Design Manufacturer) meaning you’re designing a product to be manufactured from scratch.

You may also be working with an OEM (Original Equipment Manufacturer) which means you’re private labeling products that have already been made. However you might have customized packaging or make certain tweaks to the current product which would make it unique.

Getting an NDA in place is to discourage factories from sharing your design files, showing your production to other customers when they visit the factory and listing your products on Alibaba or anywhere else.

Note* You should get your suppliers to sign the NDA PRIOR to sending them any sort of design files.

Practicality

Kenny Miller, 10 year China entrepreneur, now factory owner and Enter China member – had this to say, “Even though I rarely have factories sign NDAs these days, you can have a factory sign an NDA if you’re really worried about them stealing your products and they’ll be happy to do it.

But make sure it’s in English & Chinese, get a Chinese lawyer who knows what they’re doing to tailor the agreement because every product is different and will have different tolerances when it comes to breaching the agreement.

If it’s just in English the factory can easily say they didn’t understand what the contract said if it does go to court.”

In my experience most factories understand the need to sign an NDA when they know you’re about to send them a CAD file or Techpack for example. It doesn’t hurt to have them sign it and allows me to gauge how professional they are early.

Now, will this 100% prevent a factory from listing your product on Alibaba?

Unfortunately, no.

The reality is unless you’re a huge brand with a team of Chinese lawyers, it’s not worth the time or resources to spend trying to legally stop a factory from breaking the terms of your NDA.

The good part is that most factories just want to manufacture products and are not concerned about copying a non brand product with no guarantee of sales.

On top of that they actually respect the terms of an NDA and if they do list your product online – they’ll likely take down the listing if you tell them to.

The Sales Agreement

The sales agreement is probably the most crucial and misunderstood document for foreign buyers in China. This is the document that lists the terms and conditions of the transaction between you the buyer and the supplier.

It should include details such as:

• Product Descriptions
  • Dimensions
  • Pantone Colors
  • Features
• Costs
  • Mold (if needed)
  • Samples Run (if needed)
  • Per Unit Costs
  • Payment Terms i.e. EXW, FOB
  • 30% Deposit Upfront
  • 70% Upon successful Final QC Prior shipment
  • Bank Account of Recipient
• Order Quantity
• Lead Times
  • Mold Production (if needed)
  • Sample Run (if needed)
  • Mass Production
• Quality Expectations
  • When and what type of QC Inspections (i.e. FRI – Final Random Inspection)
  • Based on AQL Level I, II or III?
• Action Items in case of Failed QC Inspection
  • Are they remaking the product?
  • Providing a credit on the next order?
  • Replacing the defective products?

While you want to make this document as detailed as possible remember to be fluid during your production.

And again don’t forgot to create the agreement in English & Chinese, if that’s not practical at the very least have the finer points translated into Chinese.

When to Use & What is The Purpose?

You should have some sort of sales agreement in place before sending a deposit on every order.

I ALWAYS get my suppliers to sign an agreement whether the order is worth $1,000 or $150,000. You want to put your best foot forward and show suppliers that you’re serious – especially as a small business or early stage entrepreneur.

The real value is that it helps with organization, it’s used as a guideline and emphasis on quality control. It should allow the factory and the clients to have the same expectations on how the production will flow and how the product will turn out,” said Michael Schierhorn, (a.k.a ChinaMike in the community) my business partner with 8 years of sourcing experience on the ground in China.

I’ve personally had a factory tell me that our mass production would be a 40 day lead time including weekends.

Sounds like they’re hustling seven days a week right? Nope, they meant Monday to Saturday not Monday to Sunday.

The purpose is to make sure that the buyer’s expectations are on the same level as the supplier.

Note* It’s your responsibility as the buyer to provide the sales agreement and define terms to the supplier. Only you know 100% how you want your product to turn out.

Practicality

This is something that the entire factory staff and the buyer can use as a “reference” (keyword being reference) in case there are any small disagreements, delays, quality issues etc. It’s not going to be an iron clad agreement that is followed to the tee but, it does help.

Getting a factory to agree to terms AND follow them, starts with finding the right factory.

Pro Tip* Get That Red Chop!

Hand written signatures by Chinese companies aren’t legally binding, what makes a document official in China is the red company stamp (or chop). If you’re signing an agreement with a supplier make sure the factory puts their red stamp on it.

Kenny shared this gold nugget on the topic,

The importance beyond making the document official, is that quite often you may be dealing with a sales rep and they may agree to all your points verbally but, when some issue come up during production they may claim they didn’t agree to those points.

Now you’re in a he said, she said situation without a stamped agreement…

But if you go to their boss with a stamped agreement, the boss is more likely to side with you and honor what was written down in the agreement. They may also want to change that point on the next order but at least you’re getting what you agreed to on this one.

What you have to remember is most Chinese factories are not out to cheat you but, mistakes do happen.”

Want a free copy of our sales agreement?

Click here to download now!

P.I. – Proforma Invoice

The proforma invoice is the most simple and common document you’ll deal with in China manufacturing. It’s always provided by the supplier. Think of the P.I. as it’s more affectionately known as here, as a “sales agreement light.”

It usually lists:

• The Date
• Basic Product Descriptions
• Costs
• Order Quantity
• Lead Times
• Banking Information

Factories will send a P.I. once you’ve finalized all the details of your order. From the manufacturer’s perspective it’s an official quote, they’re ready to get paid and commence mass production.

Don’t sign off on a mass production with a P.I. use it as the framework for your sales agreement as the P.I. rarely has anything listed about quality control expectations or late production penalties.

Less Commonly Used Contracts

• Exclusivity Agreement –  An agreement between the buyer and supplier that restricts the supplier from selling to another buyer. It could make the supplier exclusive to the buyer in one market or it could be global. Exclusivity agreements can be negotiated but, you need to be pushing some serious volume consistently for this to be attractive to a supplier.

• NNN Non-disclosure, Non-circumvention and Non-competition Agreement – A super sexy and seriously (I like alliteration) extensive agreement which encompasses:
  • An NDA (See description above)
  • A Non-circumvention – meaning the parties in the agreement can’t indirectly or directly go around each other to get involved with 3rd parties or entities introduced by either side.
  • A Non-competition – meaning the supplier can’t go into direct competition with the buyer.

As you might have guessed already, unless you’re going to be placing a multi-million dollar order (with an ODM) – you probably don’t need to be signing an NNN right now. Focus on making the best product possible and building up your business.

Founder of Insight Quality Andy Church said it best when I spoke to him,

Don’t spend money on a lawyer to draft up these contracts in China, especially if you don’t even understand what they mean and if they’re enforceable.”

But Are They Enforceable?

Legally yes of course but mostly no not really… Let me explain.

As a foreign entity in China it’s going to be extremely difficult to fight a Chinese supplier.

Who do you even go to if the contract is breached?

What type of court do you go to?

How much is it going to cost?

What’s the timeline?

Even if you have the resources, the reality is the court is more likely to side with the local business.

All you have to do is look at the current trademark lawsuit with the iPhone brand in China or look back to 2012 when Apple had to pay $60million to a Chinese company to get the rights to the iPad name in China – 2 years after the original launch of the iPad…

Insert Nick Ramil,

China plays by it’s own rules and at the end of the day China cares about China. They’re focused on making themselves self sustainable, that’s why they localize everything and shut out foreign competition when it comes to apps and software development. Just look at how DiDi bought out Uber.”

Why Even Bother Then?

Because there’s light at the end of tunnel.

I’ll give you an example.

Recently we sourced and managed production for one of our Amazon FBA clients. We went through our usual process of sifting through & vetting about 30 – 50 suppliers before narrowing down the best 3 – 5. Visited the factories, chose our supplier because of their experience and how professional they were. Then we started going through the sales agreement terms with them.

What usually takes a few hours, maybe half a day – took three days!

Not because they had a lot of issues with our terms, they just had to run through & sign off every detail of the contract with upper management – not your typical mainland factory to say the least.

This was a good sign.

Long story short, they passed the final QC and the quality of our product was really really good.

The only issue was the mass production was one full work week late. The delay itself wasn’t a surprise, it was communicated to us one month earlier.

As per our sales agreement we deducted a pre agreed percentage (of the total order) from the final 70% deposit. Which basically saved us $1,500.

Of course 9/10 factories in China probably would have refused to take the hit and we probably wouldn’t have done anything about it. But at the end the day taking the time to find, build a relationship with a professional supplier and draft up a contract is what allowed us to be compensated for the factories’ mistake.

Focus on finding the right suppliers and building those relationships.

China Vets Power Round

Nick

“I’m still owed around thousands of dollars and products, but I’ll never see them. This was part of learning how to do business in China as places like EC didn’t exist before.

It leaves you open if you don’t have one in place, and it sets baselines in writing but, if you think you can go to lawyers as you would in the USA, you’re mistaken.”

ChinaMike

“5 years ago I would have laughed at the idea of a contract. However, since we restarted the company in 2015, we’ve been more systemized and see more value in creating contracts now.

It is an acknowledgement of responsibility from the factory, it helps set expectations and guidelines.

Larger companies dealing with large manufacturers might put more emphasis on it. But the handshake agreement is still more common, it’s about trusting your supplier and building up your Guanxi.

To me, having checks and safeguards during the production to make sure you’re getting what you want it is the most important point.”

Andy

“Contracts aren’t worthless but they aren’t a save all. It’s important to understand that if the parties doesn’t honor the contract it’s extremely difficult to enforce.

They do bring validity to the buyer but you can also communicate validity in different ways like:

1. The volume of the orders.
2. Frequency of orders.

Using a contract to validate the buyer is good initially but, it’s not a longterm solution. As for details of the contracts make sure you understand them. You have to ask what is non-circumvent, what is non-disclosure, why is it important to the factory and to the buyer? These need to be understood by both parties.

The real value is using the contract as an excuse to go through the points of the production”

Kenny

“I do think the contract is important, mostly to make sure there aren’t any misunderstandings. It needs to be in English & Chinese, you need to write down all your requirements, specs, what the payment terms are, QC expectations etc.

This is just so if the factory comes back and says they don’t want to do something or want to change something you can point to the document and say no because we already agreed to xyz and you gave your stamp on it.

But don’t get comfortable just because you’ve signed an agreement with them.

You need to still be on top everything.

What goes a really long way is building a relationship with the factory and visiting the factory in person prior to starting the order is huge in showing them that you’re serious about building a relationship with them.

I look at the relationship as more of a contract.

Show them that you’re there for them as much as they’re there for you.

Work with the factories in a respectful way, be open and honest.

Above all always do what you say, once you gain their trust and loyalty they will do anything you want them to do and the contract won’t be so important.”

Conclusion

As Michelini said in a previous article “manufacturing is a bitch…”

But I honestly think factories in China are slowly changing (especially in Southern Coastal China).

As they work more with foreign clients and study their needs, as the old school factory bosses retire and their well (often western) educated offspring take over, as the government implements more rules & regulations around minimum wages and working conditions etc.

There seems to be a slow shift towards legitimizing operations.

Contracts matter in China but don’t think just getting a detailed contract in place, means that’s the end of your job.

To ensure your agreement is honored you have to be vigilant, you have to work within the factories’ system in order get what you want and you have to empty your mind, be formless. Shapeless, like water.

Be water, my friend…

A Bit of Background on Mike

Mike is an American internet entrepreneur in China since 2007. Passionate about cross-border e-commerce and bridging China and the International markets, he has a host of business experience from e-commerce to mobile apps. Currently a partner at Enterchina.co as well as co-host of the podcast GlobalFromAsia.com

Over the close to 10 years in China, I have made my own set of new products as well as helped see through the process with over eight other startups – a mix of success and heartaches.  #Thestruggleisreal and as my friends at Haxlr8r would say, “Hardware is a bitch”. But there are strategies and steps you can generally follow to reduce the pain.

I did my own product, Electrapour LED pour spout, before crowdfunding existed – learning from expats I met at bars in Shenzhen, China back in 2008! Today I’ll take what I learned doing it myself, as well as experiences from others.

But, if you are looking for a simple way to get rich quick – DO NOT design your own product. This is a long process and you have to be in it because you love it.

So, don’t hate the player, hate the game. Realize that we are in a global economy now where as soon as you post on Kickstarter a Chinese entrepreneur can swipe it and beat you to market.

Today I will share tips and recommended steps to maximize your chances of making the product a reality.

Note – My Experience Is While Living inside China

It is worth mentioning – I did this while living inside China. I wanted to make my own products while based in America, but one major reason I relocated to China was to develop my own products. While you can do this process remotely (from outside of China / away from your factory) it will add a lot of delays and miscommunications.

If you’re reading this from your cubicle in America right now, don’t lose hope. Your product validation (earlier steps) will be much easier to do in your home market. The tradeoff I would make is validate your product, get your handmade sample, CAD, and 3D printed models in your home country. But after that, I strongly recommend budgeting some time in China for “making it real”. You’ll see many crowdfunding campaigns say they will come to China once they get funding, that is because they did the steps to the sample, and now want to work next to the factory to ensure it is communicated correctly.

I’d love to hear tactics from readers who have done a new product development with a Chinese factory completely remote. Please leave comments below and share!

Step 1: Crowdfunding is NOT Step 1

Step 1 is, not a real step, but a big note. Launching on Kickstarter or Indiegogo is NOT your first step. So many of our Enter China members have come to us with their new idea and working on their crowdfunding campaign.

Step 1 is still the traditional product valuation, lean startup methodology. Have focus groups, find groups of your target users, find pain points. Today’s article is not going to dig into product validation – but I want to be clear you need to do this BEFORE you start to develop your hardware project.

Make a Sales Sheet BEFORE you Manufacture

Step 2: Gather Similar Products in the Market

Own this market. Get all the goodies you can in the market. This will be helpful for your product validation (see step 1) – but also for your product manufacturing.

For my Electrapour LED spout, we took a clear LED bottle pourer, an LED light with a wire and jammed it into the spout and connected a battery to demonstrate the product.

This will help you gather feedback from people in the marketplace, as well as engineers on the feasibility.

Step 3: Draw it Out and Get a CAD

Once you have a better idea of how the product will function, and the feasibility feedback from geeky engineers.

Note: Engineers are your friends! Get as many engineer friends as possible leading up to this process. Dig them up from your college contacts, local bars, or online dating posing as an attractive female.

As a bootstrapped entrepreneur in this process, I feel your pain. If you really can’t find an engineer friend to help you, hop onto upwork.com and find one to work with. But it is critical they give you feedback on the feasibility of the product – not just draw up what you give them into CAD format.

A good engineer will give you feedback and suggestions on your concept and save you tons of money in making a more SIMPLE product that is easier to get into mass production.

In my Electrapour experience, we had a CAD engineer sit with us over beers and watch him make it real time. To see your product go from a “back of the envelope” (coffee stains and all) to 3D CAD is like watching magic. If you can’t sit with them in person, try using teamviewer.com software to see their screen while doing a Skype call.

Set expectations with your engineer, this will be a back and forth process. Prepare them to have at least one or two rounds of revisions. You may realize it is better to change the angle of the housing, or positioning of the LED lamp. In our case, we had to revise the spout to put the LED further down so that it would shine better when pouring the liquid.

And like everything in life, hindsight is 20/20 – so be patient and get it right before moving to the next step.

Step 4: Get a 3D Printed Sample

Once you have a CAD sample you are happy with, you can have it 3D printed. Now, as an “old man” in this space, I can say how lucky you guys are nowadays – 3D printing is more and more accessible and therefore cheaper.

But be careful on who you give access to your CAD files and concept. I know all the Startup Weekends I helped organize would get upset at me now, but while you want to be open about your product to get feedback – you don’t want to be open about your design files and IP. This is like the source code of a mobile app, people with this CAD file can mass produce it.

This is where it may be more beneficial to work with a 3D printing company you trust – even better one you can visit in person. Order a few of them to be printed out, and be proud of how far you have come.

Now that you have a physical piece in your hand, your new product design is so close! But it isn’t time to celebrate.

While I am making this sound much easier than real life, I’ll add some of the hiccups that often come. For example, my Electrapour product, had LED lights, PCB board, and various plastic materials. Sourcing all those components took ages! Spreadsheets of different factory quotations for each component, ordering samples from each of them, confirming the quality of the materials, the cost.

Step 5 – Look at Your Materials & Think About Mass Production

Mass production should always be on your mind, but it will especially become true at this phase. By now, you have a physical sample of your product (well, 90% close, a hand made 3D printed sample isn’t the same as mass production), various component factory pieces, different choices for materials, CAD design (s), drawings, and probably some new white hair.

There are a few options from here. Will you work with 1 factory, or many? Many people end up finding a factory off Alibaba that makes “bar products” if the product is a “bar product” (in my case). Here’s the thought process

Positive: They Have Experience in Your Product Line

Working with a factory that has experience in your product line will make things much easier. They will know the common pitfalls in the new product development stage dealing with the materials and requirements. They may have an engineering team who can help you in the process of tweaking your current CAD file and other design files. It will speed up the process and make things go smooth.

Negative: They Can Become Your Biggest Competitor

On the other side of the coin is – they can most easily become your competitor. They are getting regular inquiries on Alibaba for products similar to yours. They may get tempted to show off your newly designed product at an upcoming Canton Fair or Global Sources show. They may get even more tempted when a new Alibaba lead comes in asking for your exact product.

To be fair, it is easy to blame the Chinese factory for copying. While often they are at fault, also consider American or other country competitors who are sending your new product sample back to Chinese factories asking to “copy” or “can you make this product” without ever mentioning it is a new design.

So with this in mind, let’s talk IP.

Patents and Trademarks, and China – Oh my!

Now, please don’t read this article and then email me questions first asking for an NDA. An NDA to me shows you are a rookie and that you don’t know what you are doing. I would instead suggest, anyone that you share your idea with can copy you. Just accept the fact! Take that mindset and instead put it on TAKING ACTION faster than anyone else. Knowing your target market, your customer better than anyone else.

I say forget about the word patent. It is just not worth it – unless you’re a massive conglomerate with a legal team to back you up and sue entrepreneurs and other conglomerates, I say screw it.

But – I do recommend trademarks. There are a few different choices – but I’d recommend a Chinese trademark and a US trademark (or your major market). This will cost you a thousand or two, but will let you sleep a bit better.

Why a Chinese trademark? Do your own research on this one, but short story is – even if you don’t plan to sell in China, a Chinese trademark gives rights to someone to manufacture the product in China. So if you want to block competitors from using your BRAND when manufacturing in China, you need this.

And BRAND is really the main value you are building. Patent is for the design, but it is so hard to protect a design and enforce it – you just gotta go all in with your marketing and branding of the product.

And brand is about community. Use your crowdfunding campaign, your blog, social media, to build a loyal fan base who will buy yours, and only yours, brand.

If you are successful, you will be copied. That is a sign you have “made it”, so while it is painful (yes, I’ve been copied), try to stay ahead of the game and keep innovating.

Another Option – Use Multiple Factories

Again, this is best used if you will remain in China. Or, you can find trusted “black box” service providers like my friend Mike Bellamy at Passage Maker China 9999. This is a practice of buying the components from various subcontractors and then shipping them to be assembled by a third party.

The benefit here is your factory is less likely to be your competitor. I say LESS likely, because of course anyone can buy the actual product (Amazon USA ships to China now, FYI!) and break it down and reverse engineer it.

The value here becomes in the quality of your materials, components, and your assembly team. Even if other factories copy you – they may have trouble finding the PCB factory, that LED factory, that exact plastic mould factory. And on top of that, they may not take the “tender loving care” you and your assembly plant will in putting it all together and doing final product testing.

Yes, this will cost more. You’ll pay more in shipping various components around. You’ll pay higher fee for more people to learn your product, your process, your inner workings. But you will have a more protected product.

I have to admit, for Electrapour, I didn’t go this way. I instead went with my Chinese factory who I was currently buying “generic” bar products from and gave him my design. It was a constant battle to ask him to remove my new product design from his Alibaba account and other use cases.

A Hybrid Model – Sending Components to Your Industry Specialized Factory

So maybe you’re still thinking to use the “industry expert” factory. They know your product line really well, after all. So let’s use Electrapour as an example. The factory was based near Ningbo and had trouble finding good LED lights. I was down in Shenzhen, and there are thousands of LED factories. I was at the marketplace testing them with some wires and batteries until I found the best ones.

I’d order the LEDs from a Shenzhen supplier, have them sent to my Shenzhen office, remove the invoice and other details of where the LED came from, and ship it up to the Ningbo factory.

Later, when I found out other competitors were ordering from this factory, I saw the LED lights weren’t as bright. They didn’t know our supplier of LED and were using their local source that I didn’t accept.

While this isn’t too strong of protection, it is a deterrent. Many Chinese factories don’t understand why foreigners buy such expensive materials and components and often cut corners to save on final product pricing. This is why you need to know your product inside out.

Main Takeaway – BOM (Bill of Materials)

What you hopefully are getting here is – it is YOUR job to know your product. Often new products, or even slightly modified current products, change the internal components and materials significantly. Don’t just expect your factory to know what the best components and materials are.

It is your job as the “inventor” or “product designer” to know what goes inside your product. It is called in the industry BOM: Bill of Materials. And start this from day 1.

Back to the earlier stages of this process, when checking out current products in the industry – pay attention to the material and components. Often times you can use the same pieces for your own product. Or, if it is bad quality, it’s most of the time because of a bad component. Think of Samsung’s batteries exploding. The rest of the phone was probably great, they just got a bad supplier of batteries. Each piece of your product YOU need to know, inside and out.

Make an excel spreadsheet of your product. List out each and every piece. Know how much plastic is required, what type of plastic you want. When you sit down with the factory, show them this BOM. Show them you know how much each component costs, and that you have already sourced those component factories.

You will blow the factory owner away. And they will know you are on top of your game. Sure, they need to make money, on top of the BOM is the labor for assembly and management, as well as their profit margin and room for error or currency exposure.

Business is business, and knowledge is power. Too many foreign entrepreneurs come to China ready to get ripped off because they have no clue what they even want. Take responsibility and know the parts of your product in full detail.

RIP: Andrew Grilli

Before we go, I want to thank Andrew Grilli. He is a friend and worked closely with me on Electrapour. He passed away in 2009 of cancer. Many of these tactics I learned from intense sessions with him in bars and Shekou Old Street in Shenzhen, China. Rest in peace brother.

Want To Hear My Bloody Story? Read Destination China

Today’s blog post is just a piece of the ins and outs I went through on my first year in China. If you’re interested in learning on how you can move to China and do sourcing, you  should check out my book on Amazon – Destination China. It’s a small investment that could save you a ton of money. And if you’re too cheap to pay a few bucks for it, email me and I will send you a copy!

https://www.amazon.com/Destination-China-Entrepreneurs-Journey-Business-ebook/dp/B00VGEKG3A/

In Conclusion

So- manufacturing is a bitch. It is never easy, but especially hard when dealing with a foreign culture away from your home market. The best way to prevent miscommunication and poor quality is a solid product design and component list.

But, that means a lot of upfront work and research. If you’re willing to go longer and harder than most entrepreneurs out there, you will be rewarded long term with a solid product that gets repeat orders.

It’s not easy, and I hope today’s article made it a little bit easier. Comments and feedback is appreciated -let’s help each other!

Also – if you’re serious about being an entrepreneur and making a product in China – seriously consider our Enterchina.co/join program – its something I wish existed when I was going through the process the first time.

What’s in this episode?

• The biggest mistake people make when they go to start making their product.  (01:08)
• At least understand the basics of how your product comes together.  (01:37)
• If you’re expecting an expert to know these things for you – make sure they actually care about your product. (02:23)
• How do I learn how to make your product? (02:47)
• Go to forums to find experts.  (03:47)
• Get plugged into an online community – like Enter China. (04:18)
• If you don’t understand how to make a product ask suppliers on your early supplier list – even if you burn through the supplier. (04:49)
• Find out where your product is actually made in China. (05:07)
• Factory Regions Map
• The best way to search for suppliers is word of mouth. (05:53)
• going to markets and trade shows – if you’re in China. (06:46)
• Use search engines (07:13)
• The difference between global sources and Alibaba (07:51)
• 1688.com
• How to search correctly on Alibaba (09:55)
• Alibaba trade assurance explained (10:49)
• Assessed supplier explained (11:15)
• Find a factory that’s good for your needs and size. (15:09)
• Take supplier information off Alibaba and put it into an initial factory list (16:17)
• Make sure you have the design files (17:52)
• Also have a non-disclosure agreement (18:02)
• Rico’s blog post on contracts in China
• Create a project overview (18:51)
• Initial Factory List Template

Thanks for Watching!

Thanks so much for tuning into the Enter China Show this week. If you have any feedback you’d like to share we want to hear it! Leave a note in the comment section below! … Please.

If you enjoyed this episode, please share it using the social media buttons you see at the bottom of the post. Oh and don’t forget to give it a thumbs up on YouTube.

If you liked this video chances are you’ll like the rest of our videos too. We have a YouTube channel with over 150 videos onstarting physical product businesses and living in China. Click here to visit the YouTube channel.

And finally, don’t forget to subscribe to the Enter China Show on YouTube to get automatic updates. It’s free!

Talk soon!

If your the audio type and don’t want to look at our amazing faces, here’s the audio…

Nick Ramil – You’re not providing value? You don’t have a business!

What’s in this episode?

• The question we have to ask Entrepreneurs the most. (00:32)
• If you are providing or creating value for your customers you will have a business. (00:43)
• Founders often haven’t considered this question. (01:04)
• Value comes in many forms. (01:08)
• If you’re not asking this question in the early stages you’re adding a lot of risk to the potential of your business. (01:32)

Thanks for Watching!

Thanks so much for tuning into the Enter China Show this week. If you have any feedback you’d like to share we want to hear it! Leave a note in the comment section below! … Please.

If you enjoyed this episode, please share it using the social media buttons you see at the bottom of the post. Oh and don’t forget to give it a thumbs up on YouTube.

If you liked this video chances are you’ll like the rest of our videos too. We have a YouTube channel with over 150 videos onstarting physical product businesses and living in China. Click here to visit the YouTube channel.

And finally, don’t forget to subscribe to the Enter China Show on YouTube to get automatic updates. It’s free!

Thanks Nick for flexing that knowledge muscle!

Talk soon!

The campaign exceeded all my expectations and put me in a place where I could start running this business full time. When it was all said and done I was sitting at $85,324 (410% of the $20k goal) in funds raised with nearly 700 backers.

What was I crowdfunding?

Well, as you can see below, this campaign and now business is about a crazy idea I had to put reclaimed airplane aluminum into a watch.

Apparently others didn’t think it was too crazy…

In the spirit of giving back to a community that has given me so much, I’d like to take a moment and share everything that I did leading up to and during the campaign from a marketing perspective.

Maybe it will benefit you in your current/future endeavors.

So, I figure I’ll break this down to three critical areas in the timeline “before, during, and after” the campaign.

Let’s dive into every aspect.

And I mean EVERY aspect.

Some topics I’ll cover more extensively (mostly related to marketing).

Other topics I’ll set the stage for in this blog post and then go deep in a future blog post (mostly related to product development and manufacturing).

That being said let’s get right into the beginning….

The very beginning.

Let me set the stage.

I’m sitting in a Starbucks in Charlotte, North Carolina at one of their small high top tables that barely fit a laptop (much less my latte).

At this point I was still working at my 9-5 job as a marketing employee for a software company.

I just got done reading the Enter China blueprint on product idea generation and was mulling over ideas I wanted to pursue.

The blueprint had guided me to fill out a spreadsheet concerning all the successes at the time on the various crowdfunding platforms.

This is a great exercise for really going deep into product discovery and actually understanding what it takes to be a winner on these platforms.

It was clear watches were able to do well over and over again. Watches were also a good fit for me because at the time I was helping out a non-profit watch company – at the very least I had a moderate understanding of the market.

And I just like watches.

So, I thought to myself “if I was to make a watch… what would I make?”

That’s when I leaned back and took another sip of my overpriced latte and noticed the exquisite design of my Macbook.

It’s soft rolling to hard edges.

It’s bead blasted finish.

And that aluminum… mmm, yes, I love that aluminum.  

Aluminum?… why isn’t there more aluminum in watches?

At this point I went down a rabbit hole of Google searches.

I learned that aluminum watches were typically the affordable (*ehem*… cheap) watch options.

There was also this trend to only focus on the merits of the metal if it was gold, silver, platinum – you know… a “precious” metal.   

And there in that Starbucks the idea for the Morveau watch was born.

I was going to elevate aluminum in watches by using reclaimed aircraft aluminum and marketing the merit of the story of the metal before it became a watch.  

But what now?

Now I had an idea, but how do I make it a reality?

My next tab open on my computer that day was Upwork.

Before the Campaign

On a very technical/practical level, I had to design the watch (CAD), create a logo, and come up with branding.

All these things were outsourced through Upwork.

For any technical or creative work Upwork has always served me well and I suggest you start there.

This process took about 3 months of going back and forth with my designer concerning the designs I wanted.

This timeline was definitely a little long but keep in mind I wasn’t so sure I was going to fully commit to this at the time and I was also still doing my 9-5 job.

Pro tip: If you decide to do something – FULLY COMMIT!

I’ll cover the design aspect in more detail in a future blog post.

Outside of the nuts and bolts of making sure I had a product and brand worth selling I also had to find a supplier to manufacture the watch. This is a topic for another day but for now I will link up this video Enter China recorded recently on finding a supplier.  

Then I had to find people that would be interested in buying it…

Getting Leads

In order to capture these leads I needed a landing page to grab their information when they suggested they were interested.

For that I used Instapage.

(I wanted to put a picture of my initial landing page here, but after searching it looks like I didn’t take a screenshot and wayback machine is not giving the best image of it. Sorry about that.) 

So the next question to answer was where are these people going to come from?

Initially my idea was to identify the top 15-25 bloggers in the watch/fashion/lifestyle industry, 2-5 key forums, local and national media publications, and a few key social media accounts to find my traffic.

The reality of this plan was not as lucrative as I had hoped. The bloggers and media wanted to see samples – of which I didn’t have.

Social media is very visually motivated and I only had a few 3d renderings to show.

The problem with forums is you have to engage regularly and months before product launch in order to not sound spammy – I would like to have forums as a long term marketing plan, but in the short term I just didn’t have enough time to develop those relationships.

Looking back my first plan of action as soon as I knew what I was going to create should have been to put up a landing page and start engaging communities related to the product.

Live and let learn. (You can learn from my mistakes.)

So after about a month of reaching out to bloggers and trying forums and social media posts on my various accounts I realized that wasn’t going to work out and I had to pivot.

It was at that point that Tim recommended I reach out to all my Facebook friends, current and old, and ask them to sign up.

But I didn’t want to just ask them to sign up for a newsletter or updates for the Indiegogo launch date, because I wanted them to be much more engaged with the product by the time they purchased.

So I set up a survey where I would ask everyone to provide design feedback on the current design.

BUT, and here’s the kicker, in order to submit their feedback they would have to give their email.

Here is the link to the form I had them fill out

This way I knew they were interested in my product because they were willing to take time to comment on the design AND give their email in the process.

With this strategy I began the tedious but very beneficial task of starting conversations on Facebook with everyone I’ve ever friended, including people I hadn’t talked to in years.

In order to track this process I exported all my friends names from Facebook into an excel file. (If you’d like to know how to do this here’s a link that explains how to download your Facebook data.)

I would color code each friend’s name for where I was in the conversation. For instance yellow fill for message sent, green fill for response, red fill for no response.

This process turned out to be a ton of fun because I was able to catch up with people I hadn’t thought to reach out to in a while at the same time I was able to bring them into what I was doing. It surprised me how many of them were excited about what I was doing and wanted to know more. (Who knew my friends and family actually liked me.)

The conversation typically went like this:

Me: Hey So-and-So, What’s up? It’s been a while since we caught up, what are you up to these days?

Them: Great to hear from you. I’ve been up to this that and the other thing. What about you?

Me: Wow those life accomplishments are great. I’ve been living out here in mainland China for about two months. Manufacturing a watch I designed. Want to take a look at some of the designs?

Them: Sure!

Me: Cool man, here’s a link to all the designs https://docs.google.com/forms/d/130K-GwmqS2yjfw3_RgvUtmKv23fv5v86USL5Wn09J-E/viewform?usp=send_form  There’s also a quick question on there that would be super helpful if you answered.

In reality this discussion was a bit longer and accomodating for actually caring about their story. But you get the point.

After that initial round of reaching-out I had talked to about 500 people on Facebook and received about 250 emails.

Which wasn’t a ludicrous amount, but of the 250 emails all of those people were engaged in my product because they had stake in the design. So I was fairly confident that a good number of those people would support when the campaign launched.

To double the ante and keep my supporters engaged I had them fill out another form asking to clarify their previous design suggestions.

Here is a link to that form

Of those that filled out the first form 54 filled out the second.

At that point I knew that 54 people were near guaranteed to back my project.

But I needed more.

That’s when I talked to Nick.

This was about 3 weeks before I was set to launch. Nick told me to reach back out to all 500 people on FB again and ask them outright if they would support the campaign. (Nick talks more about this approach here.)

So that’s what I did.

At this point I modified the excel file to include extra data points to help me track where I was in the conversation with everyone. Like “Completed Survey”, “Purchase Day One?”, or “Purchase First 5 Minutes”… these were all yes/no data points.

By the time the campaign launched I knew that 100 people had committed to purchasing a watch. 84 of which would purchase within the first hour.

Which led to launch day.

I realize I didn’t cover building the campaign page, marketing, and the design aspects that go into creating a great landing page. In the future I will create a post solely focused on that topic. I recorded a video walking through elements of a great campaign page which will be helpful as you consider creating your own page.

Hitting Launch through the End of the Campaign

On the day of launch I woke up early after what was supposed to be a good night’s rest. In reality it was a night of tossing and turning between excitement and fear.

Excitement that my first crowdfunding project and my first product that I designed was launching to the world.

Fear that this whole thing would bomb.

So I was up early had a hearty breakfast and was ready to hit start on my campaign.

Real quick let me paint another picture here.

This was a solo project. For the most part I did this on my own – with extensive help from the Enter China community and my network of suppliers and designers.

For launch day I was staying in a friend’s spare bedroom and had set up campaign headquarters (my laptop) on his coffee table in the living room.

“Launching” was very NOT glamorous.

Ok now back to that coffee table with my finger hovering over the trackpad ready to hit LAUNCH!

Following up with friends and family

Before the campaign went live I had an autoresponder send out 3 emails.

One that was 1 day before launch.

Another 2 hours before.

And another at launch.

This was so that my prized list didn’t forget that they had promised to back the campaign.

Simultaneously I had my facebook messenger pulled up. Along with the excel file of everyone that promised to back within the first 5 minutes, hour, etc.

As the campaign went live I immediately began messaging my friends and family. First the first-5-minutes group. Just giving them a friendly reminder.

Some people were having technical issues signing up or figuring out how to use Indiegogo. (Looking back I probably should have given them some education the night before on how to do everything – even though I made this instructional video there was some gaps that could have been addressed.)

The reality I learned on that first day is that many people will promise to back you but only a certain few will follow through. Things come up, they forget, finances aren’t in order, etc. etc.

This you can’t control.

But what you can control is being direct and following up and getting a solid “yes” or “no” out of them.

That first day was entirely spent following up with people that said they would back my campaign, teaching people how to actually use Indiegogo, and resolving any technical issues that came up.

It was a long first day and there were still many people on the first 5 minutes and first 1 hour/day list that had not backed yet that I would still need to follow up with over the duration of the campaign.

But it was absolutely worth it to, what felt like, pester the crap out of my friends and family.

The momentum built up lead me to be featured on the home-page of Indiegogo which lead to more sales and more momentum and ultimately kept me on the homepage of Indiegogo for the life of my campaign.

Because of that first day I raised over $10,000 of my $20,000 goal. 50% on day one!

Moral of the story… don’t skip this step.

Momentum and Getting on the Indiegogo email newsletter

I had been in constant contact with my Indiegogo sales rep/client manager throughout launch. Each time we talked I’d mention the prospect of being included in their email newsletter of suggested campaigns that goes out to over 1 million people.

But it never turned into much.

However, on day 4 my campaign was still riding high on the momentum with my campaign being featured on page 1. Getting consistent sales and generally being one of the most successful campaigns on Indiegogo at that moment.

So I used all of this clout to reach out to a guy I had met in HK who was the director of tech projects with Indiegogo at the time.

Asked if I could be on the newsletter.

He never responded.  

BUT, later that day I found out my project was going to be featured in the first slot on the newsletter.

Coincidence?

I’m not sure. But everything counts!

When the email newsletter went out I raised $31,000 in one day!

45% of my total amount raised came from that one email! That’s $38,000…

With that one major success under my belt let’s talk about some other approaches I took that you hear about a lot.

Here’s the real real on other marketing approaches I attempted.

Reach out to bloggers/etc. Now that I have traction

Even with the traction I didn’t personally find a lot of success with reaching out.

What I discovered was that targeted media was much more lucrative for telling my story.

I had a connection with a guy who runs a regional online news publication called Charlotte Stories.

Because I came from Charlotte it was a really good fit – he agreed. So he featured my story of moving to China to start a business and launching on Indiegogo.

That one article drove $1500 in sales.

In the end I wasn’t able to get a whole lot of other press to bite without a sample. Given that I only had 4 precious samples on hand I was simply unable ship samples to press/blogs.

Pro tip: if possible do a larger sample run to have samples on hand to send to the press.

Paid advertising

I wish there was some great success to share here, but the truth is paid advertising didn’t go so well for me.

The goal with this post is to share the real experiences of running a crowdfunding campaign. Not just share everything I did right but also to be honest about the things I did wrong.

If not wrong, at least not successfully.

I wasted a lot of money thinking that if I spent money on ads I would get a whole lot more backers.

The lesson learned here was if you don’t already know your audience fit for FB ads then you will spend a lot of money and time figuring that out.

With a 30 day crowdfunding campaign you might not have enough time to figure that out. If you want to use ads consider running ads for product update sign ups or pre-sales ahead of your crowdfunding launch to figure out which target market you need to be advertising to.

Facebook returned about $4000 in sales (many of these sales were not through ads but friends sharing) but I could never get the CTR to a reasonable rate. And I ended up spending much more money on ads than I earned in return.

This proved to be much more difficult than just flopping up a few ads and raking in the dough. (note to self: nothing is that easy!)

Another note of retrospection, creative is a huge component to ads.

I’m not very creative.

And I didn’t have the money or inclination to hire a designer for ads – this might be a significant reason my ads suffered. Maybe someone with more ad experience can weigh in on this in the comments?

Interacting with Backers and Updates

Another key aspect you will see in all successful campaigns is frequent updates to backers and to the general public – at least one per week; if not every other day.

You can never say thank you enough; after all, these are the people that allowed you to bring your business to life.

Show them how much that means to you.

Respond to every question and comment. No exceptions. Even the weird ones.

Write personal emails to each new backer. If you’re getting a ton of backers you can scale this effectively by automating the emails. But just make sure that they feel the care.

While you’re emailing them and thanking them try and get to know who has backed your campaign.

Develop a relationship.

This insight now will be invaluable later as your assessing who your target market is.

Even if you receive the occasional angry email just kill them with kindness. In almost every situation this has diffused the frustration and anger.

Initiate Order

During your campaign you should get a very clear picture of whether you will reach your goal within the first few days or at most 15 days in.

Once you know your campaign will succeed you need to start communicating with your supplier to place the first order. (I realize some people are not in a position to place the 30% deposit without the crowdfunding money, in that case wait til after the campaign to place the order. Or, see if you can negotiate terms to start the order based on the campaign success.)

Most campaigns have some sort of variations. So you will need to know which version of your product the backer wants. In my case I had 12 different variations available.

To know how many of each variation (or SKU) to order from my factory I sent out a survey in each of the thank you emails. The survey simply asked which watch they wanted.

After a few hundred submissions the trend became apparent and it was easy to know which number of each variation to order.

For the most part that’s what my activity looked like during the campaign.

Towards the end of the campaign be sure to send out reminder emails that your campaign is ending.

The FOMO (fear of missing out) will get you an extra kick at the very end.

Even though it might feel like you’re done after the campaign… yay you raised the money… you’re nowhere near finished.

What to do after your crowdfunding campaign

I present the list of activities to do after the campaign is finished.

Frequent updates to backers

Keep the updates going (less frequently, but keep them involved in the production process and every step along the story process.)

Always respond to EVERY comment – it’s an opportunity to build a relationship with your customers

Setup email notifications for every time a comment comes in, be on these like a hawk, and fast with answers.

Start pre-sales on Shopify site or continue on Indiegogo InDemand

Immediately after campaign is finished turn your Shopify store on and start taking pre-sales to your website.

There are many other blog posts that are much more qualified to talk about website design but here’s an example of what mine looked like… 

You should have already designed your site either before the campaign launched or during the campaign. This should be ready to go live the moment your campaign ends (or even before) and start taking pre-sales.

Another option is to continue selling your product via Indiegogo’s InDemand feature. This feature can be used with Kickstarter campaigns as well. InDemand is a way to continue to sell on Indiegogo after your campaign has ended. It’s crowdfunding without the timeline and it’s only for campaigns that successfully raised their goal. (I raised a few extra thousand using inDemand.) 

If you ran a Kickstarter campaign Indiegogo has partnered with Kickstarter to basically port over your campaign to continue selling via InDemand. This is very simple for you the campaign owner because you don’t have to create a whole new page on Indiegogo it takes all the information from your Kickstarter and brings it over to Indiegogo automatically.  

Manage production

You should have already initiated the order before the campaign was finished when you were able to see that your campaign was going to succeed.

If you were unable to pay the 30% until you received the money in your bank account then this will be the first thing you do when the money hits the account.

With production everything will seem like it’s going well at one point and then everything will feel like it’s falling apart the next.

It’s incredibly frustrating and rewarding at the same time.

Just know NOTHING ever goes right the first time. There will most likely be delays, even if you gave yourself a significant buffer time

Appropriately manage expectations with your backers. Make sure they know exactly where you are at the production process and any delays as they happen (and as you have information).

Watch your suppliers like a hawk.

Rico recorded an extremely valuable video on managing the manufacturing process.

Ship products

Once everything is ready you need to ship.

This is a BIG one. And can be incredibly frustrating if you don’t do your due diligence and consider some key aspects.

When it comes to shipping preparation is the name of the game. You should have this ready long before you even ship (have a shipping agent lined up)

Teaser: you are about to learn from many of my mistakes.

Customer service quality from the shipping agent should be a huge factor in choosing a supplier. My customer service rep always ghosted on me – didn’t respond to emails.

I had to go to the sales rep constantly. Even the sales rep ended up ghosting after my constant badgering over problems.

Because I was on a strict timeline I had to do whatever it took to get the product out the door.  

So I went to Hong Kong showed up at the warehouse, met a warehouse representative and got her number and email. She finally was someone who would get stuff done. But I shouldn’t have to do this!

Always have multiple options and do your due diligence.

There’s also a hidden lesson here – get recommendations, but don’t always trust recommendations.

So what does due diligence look like?

In a nutshell, find at least 3 different people that have used a service and ask their feedback. Find at least one negative thing about a provider. If it’s all good then there is probably something hiding.

I did none of this. (*Gasp*)

Outside of choosing the right shipping agent here are some things to consider…

• Decide how to fulfill. Are you going to ship direct from China/HK or ship to a warehouse in key demographic areas and fulfill from there?

• Find a solution that can easily transition into your long-term solution once you’re selling on your website.

• With shipping timing is everything; I shipped near to Christmas at the end of November. I was promised to ship out by the end of November. My product just sat around in the warehouse “processing” until the second week of December. The shipping agent was new and overwhelmed with a bunch of orders – mine was relatively small comparatively and was given the backseat. My backers suffered.

• Have a clear understanding of costs – shipping agents will give you “estimates” and then say they will most definitely be under that amount. It’s almost never under that amount and almost always over. So plan on this. (Hidden costs include taxes, duties, customs, etc.)

Monitor Shipping

If your shipping agent doesn’t have a way to monitor each tracking code then get Aftership.

Aftership is a very cost effective solution for monitoring every tracking code that comes from your shipping agent. Their software will match up with your shipping agents software. If Aftership is not compatible with your shipping agent you can always upload an excel file with tracking data.

You want visibility into where each package is at all times.

Keep in mind this tracking data will most likely be delayed (which is unbelievably frustrating – there has to be a better way to get real-time insight (this is definitely a HUGE gap in the market – anyone want to make a better system?))

You will have shipping delays, packages will get lost, customers will get the wrong packages, stuff will happen… plan on it and build great customer service into your plan. You have to.

If you’ve gotten to this point and you actually apply what I talked about above it’s a near guarantee your campaign will succeed.

That being said if you have any questions about anything mentioned above I’ll be answering questions in the comments.

Like I said above some of these topics that were more generically glossed over I will be writing more in depth articles in the near future. They will be linked up in this article when they become available.

You will probably notice the trend throughout all of this is focusing on your customer. Make sure they are happy and your campaign will succeed! Make sure you understand their needs and where they hangout then just crush it!

Happy Campaigning!

In the spirit of giving back I’ve put together a list of things I wish someone would have told me before I showed up at the Canton Fair all bright eyed and ready to “find” “opportunities”.  

Before the Canton Fair:

1. Get a Chinese Visa

Mainland China requires a visa from almost every country in order to enter (Hong Kong is different see point 4). Here is a link to a good resource with information about the Visa process. For American’s I recommend using VisaHQ.

2. Do you have your Canton Fair badge?  

If not find out where to get one besides the convention center. (Tip: Many hotels around Guangzhou will provide passes and you won’t have to wait in line.) It will save you a whole bunch of time.  You keep the badge forever and reuse it.

3. Download WeChat asap.

This is THE way to communicate in China. All the suppliers you meet will want to use Wechat to communicate.

4. Get to know someone else that is going.

Not sure if you know anyone there, but if you don’t I would recommend posting on FB forums or Reddit to get some contacts.  So much easier to navigate the city/country with help. We have a private community of over 200+ entrepreneurs doing business/manufacturing products via China.

5. Fly into Hong Kong.  

It’s a shorter flight with fewer changes and the flight is generally less expensive. Many countries do not need a Visa to fly into Hong Kong. Here is a list of countries and visa requirements for Hong Kong.

6. Have a game plan.  

Know what you are there for.  Know the layout of the convention center.  My biggest mistake the first time was not having a game plan.  The Guangzhou Exhibition Center is the largest in the world and it’s very easy to get distracted by all types of different products.  My first trip I ended up back home with a bag full of brochures from different companies and a lack of focus because I saw “too many great ideas”.

7. Know your transportation options:

• Get a copy of the Guangzhou subway system on your phone. Here’s a great app.
• Use Uber.  I usually ask someone off the street to talk to the driver to tell him where I am.

8. The food is terrible at the convention center.  

I ended up eating at McDonalds and Papa Johns the whole time. Take some Cliff bars or other snacks. Take some Cliff bars or other snacks.

It’s also at least double the price of an average meal.

While at the Canton Fair:

9. Take a small notebook.

• Jot notes.
• Staple a business card from the seller to your note pages.

10. Take a selfie with suppliers you like.

Email the selfie in your first correspondence so they remember you. (And you remember them.)

11. Take business cards.  

You will constantly be asked for one.  You will get spammed heavily after the show, put a dummy/ghost email address on the business cards so you don’t get all the spam in your inbox. Most sellers obviously don’t follow “unsubscribe” requests.

12. Go to the meetups and events around the fair.

• There are quite a few meetups in Guangzhou and Hong Kong during this time. It’s fantastic networking opps and you can get a lot of great ideas and advice. We’re hosting an event. Sponsoring Chris Davey’s meetup of the Amazon FBA4U WeChat group. Hosted a panel at the Global Sources Smart China Sourcing Summit.

So, don’t be like me when I first went. Prepare yourself with the above and you should have a great first Canton Fair and many more to come (hopefully).

If you have any more questions after checking out these 12 suggestions put a comment below and I’ll respond to EVERY question.

And boy is it changing at a rapid pace.

I can tell you that Chinese sellers are stepping their game up literally every month. I know of companies in China that hire tens and even hundreds of employees to look at all best-selling products in each category, run numbers, and see if they can dominate the market or at least get a significant part of it. I also know of companies running training courses and teaching tens of thousands of Chinese suppliers and sellers how to sell on Amazon. Heck, even Amazon itself sends high profile employees to China and hosts conferences where they educate the Chinese sellers! Needless to say, no one can ever have the leverage and prices of a Chinese factory, unless you can manufacture the given product better or cheaper elsewhere.

Before we get into the nitty-gritty, let me put a disclaimer here. I’m aware that different people have  various approaches to researching and choosing their next PL products. Some have the capital, time, and resources to throw a bunch of different products onto Amazon and see what sticks.My approach to product research is for someone who perhaps has around $3-$6k of capital and they really want to make it work.

I call this the Sniper approach to product research. Here are the characteristics:

– Not too competitive niche, top 5 sellers doing at least 10-20 sales a day or more (with a review count in the low 3 digits or ideally 2 digits)

– Clear gap in the market, a product that could be done and marketed better

– Custom-made or modified product

– Around $4-6k initial investment, a purchase of 500-1000 units (custom-made product is going to drive up MOQs higher)

– Non-seasonal, evergreen products. We want to create at least a few evergreen money makers first to establish a good cash flow

– Heavy due-diligence (meaning run ALL the numbers) before you go down the rabbit hole of working on developing or customizing that product

Many people coach themselves into the mindset that their first product on Amazon is mostly just for the learning process (“you’re probably not going to make much money on it anyway”) – I see the point in that but I have to disagree. You should absolutely be doing the maximum amount of due-diligence and striving to create a well-selling, solid product on Amazon from day one.

You can hit 10-20 sales/day with your first product. You can get a 200% ROI on your initial investment within 2-3 months. You can be making a clean $2.5k+ profit per month, within just few weeks of launching your first product (bearing in mind that you’ll probably need to reinvest all of it). This is exactly what I’ve done – I’ve hit $3.5k per month net profit within just 3 weeks of launching my first Private Label product. It continues to sell and rank consistently, and this was accomplished with a $5.5k initial investment, a giveaway of just 20 products, and a hell of a lot of due diligence. The amount of competition in my niche is minuscule, and the barriers of entry are there (the product is highly customized). I project this product to bring in highly passive income consistently, all year round.

For me, it’s all about building products that are defensible and have that defensibility baked into them (through the customization they’ve undergone). They are more customized, meaning you can’t launch as many or as fast as the classic Private Label products (which you normally just slap your label on and make new packaging). But I’m not telling you about my approach is a way to scale your business fast. We are talking about getting started on Amazon with your very first product, or, if you’ve tried doing the “guru” thing and have failed – trying again with a different approach. Once you have at least 1 or 2 such products, you’ll have highly passive income that should enable you to start scaling and try different things.

Another disclaimer is that I did have a leg up when I started selling on Amazon – by the time I was developing my product, I already had a few months’ experience with most aspects of running and managing an Amazon Seller Account from my job at the time. But I believe that with proper knowledge and surrounding yourself with people who are a few steps ahead of you, pretty much anyone could do it.

Now that we’re done with the lengthy intro, let’s get into the meat and potatoes!

1. Not looking to make a custom product

I think this is probably the most common mistake people make before even starting their product research. They follow advice from “gurus” to the T, take some blueprints from popular courses (often aged 2 or 3 years) verbatim and think that as long as the product checks off the right boxes (lightweight, not too many reviews, fits in a shoebox etc… sound familiar?), their product will sell.The reality is slightly different, especially with the now rapidly changing landscape of Private Labeling on Amazon. You need to look beyond those plain metrics and look at what the market actually needs and wants. I am going to risk making the statement that merely looking at these metrics and taking some product off of Alibaba, slapping a label on it with hopes to make a quick and easy buck is coming from the wrong place – a place of selfishness, rather than assessing and addressing the market’s needs.Even if you do make a quick buck this way (it’s still entirely possible), you won’t have consistent sales down the line, and your product(s) will always just be one step away from being superseded by a clearly better and more differentiated product that someone that actually took the effort to customize. You won’t build a solid brand.

I think it’s very helpful to ask yourself these questions before jumping any further in your product research:

– How can I really make this product better?

– How difficult is it going to be for someone to copy me after I customize or bundle my product?

– Do I believe this product is truly superior to what’s currently on the market, and do I see it selling consistently in 1 year?

– Am I just looking to make a quick buck, or build a brand? Do I want to flip products that are trendy for a short time, or do I want to build a solid, evergreen product line?

1. Taking estimates at their face value and using software for product research as a be-all end-all

Tools like Jungle Scout and Unicorn Smasher are the cornerstone of good product research. They are truly awesome and save you a ton of time – I cannot imagine starting product research without them.

However:

1) They are merely helpful for broad product research. This is just the beginning, there’s actually way more work to do once you’ve done your broad search.

2) They don’t give you all the metrics you need to to pull the trigger on a product in an analytical manner. And their sales estimates are just that – estimates, based mostly on the BSR ranking in that very moment. That BSR ranking – and sales estimate – could change within hours – i.e. if the product goes out of stock, comes back into stock, or someone is doing a giveaway (and this happens all the time). What you should do is take those estimates as a very rough idea of the sales you could possibly be making if you managed to get the piece of that market.

Things to do after you get a general idea of sales estimates and want to investigate the products/niche further:
A) Get The Camelizer Chrome extension, or go to camelcamelcamel.com. Check how the price and sales rank has changed over the last 3 months, 1 year, and lifetime.

What I do is copy and paste the results from Jungle Scout into a spreadsheet, then next to each product I put a “corrected” sales estimate that’s not just based on an at-the-moment-BSR, but the average BSR for the last 3 months. Then I go to https://www.junglescout.com/estimator/, click on the category, and enter that BSR to get another, “corrected” estimate.

B) A product sales estimate is still just an estimate, so you want to actually track the product sales by checking the product’s inventory status every day. You can do that in two ways:

1.  Manually add 999 units to your cart. If there are less than 999 units of that product in stock, you will get the exact number of how many units are available. Note them down in your spreadsheet. Rinse and repeat every day, ideally by the end of the day PST time. Unfortunately, if there are more than 999 units in stock,  you won’t be able to know how many units a seller actually has.
2. Use a paid software that will do the above operation for you automatically. Off the top of my head software with this functionality include: AMZ Tracker, AMZ Shark, Jungle Scout Web App. I know there are quite a few more so you need to do your own research and see what other features you’re willing to pay for.

1. Being concerned with the number of sellers in the niche

Every once in awhile, I will see someone write “But there’s 27,000 sellers for this product! How can I compete!?”. My response is that you should be only interested in what is on page #1 and #2. There are millions of SKUs on Amazon that are barely selling, and their presence in your search results for a given keyword should not be of much concern to you, if at all (most of the time). You don’t want to be just one of 50 or 100 sellers for the same or almost exact same kind of product, you want to create a better product and get a significant piece of the pie – and the pie is usually what top 5-15 sellers are making. The rest usually get scraps. This all goes back to point #1 – make sure you actually come up with a better product that adds value.

1. Not enough due-diligence when getting quotes and selecting a supplier

Depending on how well you’ve done your supplier pre-qualification and how well you’ve communicated and presented yourself when talking to your potential suppliers, you will most likely get varying price quotes.

The nature of your price quotes can vary greatly depending on how heavy your customization is, and how many pieces go into your whole product unit. Some products will feature dozens or tens of pieces, and even a 0.2 RMB difference ($0.03 US) can make for a significant difference once you multiply it by tens of thousands.

Being a perfectionist can be good or bad depending on the situation. When it comes to getting your numbers and deciding on a supplier to work with, I think you should strive for maximum cost to quality ratio. Not just quality of the product, but the supplier’s attitude and support – both pre-sales and after-sales.

I almost didn’t pull the trigger on my product (that turned out to be a quick success).After I’d received around 6 price quotes, I saw that the combined price of a whole unit wouldn’t allow for very exciting margins – maybe around $5 on a $20 – $25 product (before the PPC costs). But then I received a couple more quotes and saw that it was possible to manufacture my product at a lower price without lowering the quality. I started reaching out to many contacts I have in China and got quite a few details of suppliers through recommendations. The interesting part is that almost all suppliers that came through recommendations gave me lower quotes than the ones on Alibaba. I’ve since been able to lock down a supplier that has a great attitude, their rep speaks decent English, and their prices are highly competitive – I was able to basically double my margins thanks to their pricing rather than pricing from Alibaba suppliers! This is also just one of the many examples where reaching out to the right people for advice has saved me a lot of time and money. It was Rico (one of the Partners in Enter China & the CEO of Source Find Asia) that really helped by pointing me in the right direction. When I felt a little bit lost or on the fence while trying to find that perfect supplier (this was once I was already fully committed to my product). You can watch Rico drop knowledge bombs about finding factories in China here.

Don’t get too hung up on setting up your supply chain for your very first product though, and certainly don’t let it leave you with analysis paralysis – you can always streamline your supply chain after your product actually proves to be successful.

1. Not taking all numbers into consideration, such as the real cost of shipping

Amazon businesses (any type of retail business really) is all about the numbers, as cliché as it may sound. Not getting enough numbers or getting the numbers too late is something I’ve experienced myself and keep seeing other people do.

It usually goes like this:

1. You see a market opportunity and think to yourself that it’s pretty decent because you can make a $8 margin on a $16 – $25 product.
2. Oh snap, unexpected assembly or packing cost. You didn’t see that one coming, but it’s still good, you still have your $7 margin.
3. The actual finished product is slightly heavier/bigger than estimated, and for some reason your supplier’s or freight forwarder’s actual shipping quote is all of sudden substantially higher than the original! Oh well, now it’s definitely too late to go back, you need to ship it anyway. There goes another $1.5 – $2 of your margin.
4. You’ve gotten your product to Amazon FBA, the total landed cost makes out to around $5 – $5.5 margin. But there’s still the cost of giveaways and PPC marketing! Your final margin rounds up to something like $3. A huge drop from what seemed like $8 initially.

I actually wasted around 2 weeks of going back and forth with a supplier and starting to create a custom production sample – just because I didn’t get all the numbers right. I jumped into that particular product without doing enough due-diligence on shipping quote estimates. As soon as I realized the actual margins would be razor-thin – I jumped ship.

Making sure you have enough buffer in your estimated margins is absolute key. Do factor in all the extra costs (PPC and giveaways). Get quotes from at least 5-10 freight forwarders. A $4/kg price for Air Freight (if your shipment is not charged by Volumetric Weight) is a nice competitive rate that you should be looking for. It might be challenging to get the carton size and weight for a product you haven’t even started making yet, but due-diligence here will pay off and is crucial to your business.

This about wraps up the most common pitfalls, I’ve observed just being around a strong community of people selling on Amazon or wanting to start selling on this giant platform. When I first joined Enter China in early 2014, I had no idea how far down the line I would be engaged in the community and what I would get out of it. It was actually one of the other Enter China members that inspired me to take the plunge and start selling PL products on Amazon. If it wasn’t for the close support of some of the people I’ve met in EC, I can undoubtedly say that my road to figuring out how to succeed on Amazon would have been a much longer and more complicated one. Running an e-commerce business where you take care of everything from sourcing all the way to advertising and after-sales support – is a truly complicated process with tons of minuscule details. The more support you can get dealing with the minutiae, means you’re more like to avoid the pitfalls, succeed faster and more assuredly.

Hey guys we really want to hear from all of you international entrepreneurs. Get at us, we love to share our experiences, but we really love hearing about YOURS. So get at us in the comments section, on Facebook or @theelevatorlife.

In the last few weeks we have hosted multiple entrepreneurs who are interested in the Chinese market. It has been a great experience hanging out with so many driven individuals. They came with so many questions and those questions led to this post.

We all know that somewhere along an entrepreneurs path there will be failure and shoestring budgets. Money/budget is second to actually taking the leap. What we mean by this and what we discuss in the episode is that a small budget should never be your reason for not starting the business.

The most important thing is to immerse yourself in the marketplace. The sooner you start the sooner that shoestring budget can become a balling budget. No matter what your budget is you WILL be able to find a way to get by. (Part/full time jobs if needed). The first step is always the hardest, but it’s also the most important.

Cheers!

Hey guys we really want to hear from all of you international entrepreneurs. Get at us, we love to share our experiences, but we really love hearing about YOURS. So get at us in the comments section, on Facebook or @theelevatorlife.

Here on The Elevator Life we’ve decided we want to share a lot more about what it’s actually like to live in China. So we are going to start filming a lot videos that will give you an in depth look at what our lives are like here in China. In this first video we take you on a tour of our Guangzhou pad.

Hey guys we really want to hear from all of you international entrepreneurs. Get at us, we love to share our experiences, but we really love hearing about YOURS. So get at us in the comments section, on Facebook or @theelevatorlife.

Hey Everybody,

Today we talk about getting started in China. Do you need to follow the path of big businesses or is it OK to start small? What kind of business should you use to enter the Chinese market? Do you need to know what business you want to do before you make the move?

These questions are the center of our discussion during the episode that is actually more of a rant. Nick and I found ourselves talking about this topic and decided we should share it with you guys. This is a little limps into our daily debates that swirl around the market in China and what factors should go into someone’s decision of whether or not to make the move to China.

As always DON’T BE SHY, we want to hear from you.

Hey guys we really want to hear from all of you international entrepreneurs. Get at us, we love to share our experiences, but we really love hearing about YOURS. So get at us in the comments section, on Facebook or @theelevatorlife.

As Nick returned home for the holidays, this gave us a special opportunity to do some more interviews of fellow entrepreneurs working here on the ground in China. In the past, we’ve received nothing but positive feedback from these interviews and today’s episode is packed with tips on doing business in China.

Ryan Beltran was actually a guest on the show about 6 months ago when he talked about making the move to China. Well, a lot has changed in the past 6 months to say the least. Ryan is now conducting a business here on the ground in China.

He provides us with a very unique opportunity, as he is currently in the middle of product development. So often you hear interviews from guys who are simply reflecting on their past experiences. Well, Ryan candidly talks about his current development process and more importantly the feelings that go along with building a business from scratch. He has agreed to be completely transparent with his experience as he develops his product and prepares for launch.

He offers a really great opportunity for everyone that is interested in business opportunities in China. I really want to thank Ryan for being on the show and for being so transparent with his business.

www.originalgrain.com

https://twitter.com/OriginalGrain

https://www.facebook.com/originalgrain

Hey guys we really want to hear from all of you international entrepreneurs. Get at us, we love to share our experiences, but we really love hearing about YOURS. 

We have just returned from a trip to Fuzhou. Fuzhou is the capital city of Fujian province. This trip was one of our first in depth looks at the business and investment environment in a 2nd tier city. The trip was extremely informative and exciting to say the least.

In case you aren’t familiar with the concept of 2nd tier cities check out the few links below. China has 170 cities of 1 million residents, but only 4 of these are considered top tier. These cities of course are Shanghai, Beijing, Guangzhou and Shenzhen. However, the cities and consumers beyond the first tier cities truly represent the future of foreign development.

http://online.wsj.com/ad/article/chinaenergy-cities

http://nationmultimedia.com/opinion/The-second-tier-cities-in-china-30177269.html

Cheers Everybody!