How to Develop and Manufacture a New Product in China? (New product development process with example)

In general, numerous small and medium-sized enterprises find themselves in a pricing battle, necessitating cost reduction or decreased retail prices to stay afloat in the market. This often leads many to consider creating a novel product to secure a unique market position or even establish a brand for long-term advantages. However, a mere 5% or fewer individuals will genuinely pursue actions such as reaching out to Chinese suppliers for product samples or manufacturing, not to mention the few who ultimately succeed.

Fortunately, we have gained invaluable insights from numerous successful instances of assisting clients in producing new products in China. As a result, we have composed this article to offer a comprehensive and distinct perspective on the step-by-step process of manufacturing a new product in China, which could potentially triple your chances of success.

We have divided the new product development process into nine stages, complete with numerous examples. You can click on each link to be directed to the relevant content.

Step 1: how to generate a Fresh Product Concept?

(Those who already possess a product idea may skip this section.)

Perhaps you’ve experienced a sudden spark of inspiration in your daily life, similar to my client Osmay, or you’re looking to enhance the functionality or design of existing products in the market. Based on our experience assisting customers in successfully developing their ideas into new products in China, we’ve identified two primary categories of product ideas.

Idea Category A: Developing an Innovative Product that Doesn’t Yet Exist in the Market

The Fidget Spinner serves as an excellent example of this type of product. This small gadget took the world by storm in 2017, captivating people of all ages and even pets. However, if you delve deeper into the story, you’ll discover that the inventor, Catherine Hettinger, didn’t profit from her creation because she couldn’t afford the annual licensing fee of USD 400 since 2005. She approached Hasbro Company to see if they could manufacture her product, but they declined. If only she had known how to bring her product to life through Chinese manufacturing, she might be a billionaire today.

Another innovative product is the Inflatable Lounge, which is versatile and suitable for various settings, whether outdoors, indoors, waiting for a flight, taking a midday nap, or sunbathing. The primary advantage of such products is that they can generate substantial sales and set you apart from your competitors. The key is to implement effective marketing strategies that allow your product to spread like wildfire.

Drawback:

Creating an entirely new product idea is challenging, as it requires more resources and a longer experimentation period to develop the final product. Additionally, there’s the uncertainty of whether consumers will embrace the product before it becomes popular. The risks associated with bringing this type of idea to fruition are significant.

Advice for developing a brand new product:

If you’re unsure whether your product will be a hit or if you have limited funds to launch your project, it’s wise to focus on selecting lower-cost products in general. It’s also advisable to avoid plastic products, as they typically require a mold before production, which can easily cost upwards of USD 10,000. If plastic is essential, try to keep the design as simple as possible to minimize mold costs.

Idea Type B: Make improvements against an existed product for a better life

In the realm of product innovation, a significant portion of creators focus on enhancing existing items. Those who excel on platforms like Amazon often offer these upgraded products. These modifications can range from minor to substantial, but they ultimately provide greater value to customers, making them more memorable and desirable.

Here are a few examples to illustrate the types of improvements we’re discussing:

Water Bottle Holder with built-in straw cleaner: No need to carry a separate cleaning tool, making it convenient for outdoor activities.

Baby Carrier: Designed to accommodate various baby essentials, appealing to parents who value style and functionality. A parent may own multiple baby carriers with different designs and features.

Reusable Shopping Bag with attached pouch: Provides a visually appealing and practical solution for carrying groceries without needing to search for a separate storage pouch.

Advantages:

Creating an enhanced product allows you to build upon an existing foundation, gathering valuable information such as production costs and manufacturing processes. Many factories in China already offer stable and cost-effective production for established products, making it easier to find a suitable manufacturer. This approach also increases the likelihood of success, as you can learn from the market’s needs and preferences.

Disadvantages:

The profit margin for improved products may not be as high as for entirely new items. Additionally, there is a risk of patent infringement if you’re unaware of any existing patents on the product you’re improving.

Suggestions for product improvement:

Observe daily inconveniences to generate ideas. People appreciate simplicity and convenience, so avoid over-complicating your design.

Be mindful of patent issues. Research whether your target product has a patent and if your modifications can avoid infringing on it.

Step 2: Prepare a prototype or design file before reaching out to Chinese suppliers.

This stage is crucial in demonstrating your commitment to your potential supplier for your new luggage product venture. You might be an excellent communicator, convincing the supplier that you plan to order 100,000 units. You then sketch a rough design of the product on paper. However, Chinese suppliers have encountered numerous clients presenting their ideas in this manner; they may not trust you, be unwilling to help, or simply quote an inflated price to deter you.

How can I obtain a 3D design or prototype for my new luggage product?

A. Obtain a completed 3D design at a minimum

To ensure that the supplier fully grasps the concept of the “new” item you have in mind, you should at least have a completed 3D drawing. (Creating this design could cost you hundreds of dollars, depending on the designer’s skill level.)

During the 3D design process, you will realize that this is the first validation of your idea’s feasibility. This initial step is crucial in transforming your concept into a tangible product.

Numerous issues may arise during this process. You might be dissatisfied with the appearance, unhappy with the functionality, or disagree with specific details. As you make revisions, your idea will gradually become more tangible.

Having a completed 3D design will boost your confidence when discussing the project with a factory, as you will have already addressed many details and clarified your expectations. Chinese factories appreciate in-depth discussions and are often willing to share their expertise to help refine your ideas from a manufacturing standpoint.

B. Find a Product Development Company to help you with the Prototype

With outstanding 3D Printing technology, it is easy to print out the Prototype after you approve the 3D drawing.

If you are hiring a freelance designer for making the 3D Drawing, sometimes they will have sources to follow-up the prototype and may get a better offer than you, as they are a line working flow.

However, no matter you are planning to make a prototype or not, please always tell your designer you are going to make a prototype and may need 3D printing when signing the deal, in case you are changing your mind later on and still can ask the designer to make modification to fit prototype requirement if needed.

Meanwhile, most of the product development company for the prototype will also provide factory supporting service. Anyway, it always means a higher cost for final production. Use their factory service only when your budget is high and time is limited.

Step 3: Find a suitable supplier to manufacture your product.

A. Begin by preparing a Non-disclosure Agreement (NDA) tailored for the luggage industry.

An NDA is crucial when creating and manufacturing a new luggage product from China, as it determines how long you can stay ahead of competitors who may copy your idea.

Ensure that the NDA is signed with the final manufacturer. If working with a sourcing agent, have both the agent and the factory sign the agreement for added security.

A comprehensive NDA should include the following points to prevent the factory from disclosing information to other clients:

• lYour company details (Contact / Phone / Email, etc.)
• lYour product specifics (cost, appearance, design, functionality, etc.)
• lYour packaging information (logo, design, etc.)
• lYour order details (order quantity, order schedule, shipping plan, etc.)

For your convenience, I have provided a template of the NDA through this link for further reference.

Get NDA Template

You may need to make minor adjustments to the NDA based on your product. If you require assistance, feel free to contact us at info@tacolebag.com.

Once the document is prepared, you can use it to demonstrate your commitment to potential suppliers, as they will gauge the seriousness of your project from your paperwork.

B. What kind of product fits for finding a direct factory to develop and manufacture in China?

In search of a suitable product for partnering with a direct factory in China for development and manufacturing, consider products that are simple in design, have a higher minimum order quantity (MOQ), and can benefit from economies of scale. Factories typically prioritize production volume and speed, so they may not be as concerned with the product’s market success.

An ideal product for this scenario would be one with a straightforward design, such as toilet paper with a printed pattern. This type of product is easy for the factory to produce and manage. However, if your product requires more attention to detail, such as a combination of various components or specialized packaging, a direct factory may not be the best choice.

In such cases, a trading company may be more suitable, as they can handle complex products and lower MOQs by combining orders from multiple customers. You can find trading companies through platforms like Alibaba or at trade fairs.

If you are unfamiliar with importing or unsure which type of partner is best for your product, a sourcing agent can be a valuable resource. They can help you find the right factory or trading company based on your specific requirements and use their local knowledge to negotiate better terms, such as lower MOQs. Sourcing agents can also provide guidance on the appropriate production process for your product.

Tacole helps to develop new bag products step by step

Start Your Project Now

C. Key Factors in Selecting a Bag Supplier for Your Project

Consider the following aspects when choosing a supplier for your new bag project:

Pricing: While cost is crucial, don’t just go for the cheapest option. Look for a supplier that offers a reasonable price, balancing quality and affordability. Their experience and willingness to work with you are more important at this stage than getting the lowest price.

Sample Quality: The quality of the sample often reflects the final product’s quality. Don’t trust suppliers who claim that their mass production will be better than the sample. Wait until you’re satisfied with the sample before placing an order.

Effective Communication: A good supplier should focus on understanding your needs and be willing to help improve the product, rather than just pushing for an order. Choose suppliers with strong English skills, timely responses, and the ability to chat online or video chat for a quick tour of their facilities. Patience is essential, as changes may be frequent in a new project.

Minimum Order Quantity (MOQ): A lower MOQ is preferable. If the MOQ is fixed, try negotiating for more color options at the same price. Even if the supplier needs to charge a small fee for additional colors, it’s worth it to appeal to a broader range of customers.

Mold Production Time: Creating a new mold for materials like plastic, glass, or metal typically takes 20-30 days, including testing. The supplier may need an additional 10-20 days to complete the pre-production sample, followed by 3-5 days for shipping the sample to you for final approval.

Mold Ownership: Some suppliers may offer low prices to attract your order but refuse to release the mold if you’re unhappy with the sample quality. To protect your investment, sign an agreement stating that the mold belongs to you and can be retrieved if necessary.

Refund of Sample/Mold Costs: Many suppliers may initially refuse to refund these costs, but you can negotiate an agreement to receive a refund once a specific order quantity is reached. Ensure this agreement is signed and sealed.

Factory Certification: Inquire about the supplier’s factory certifications, such as ISO 9001, BSCI, ISO 14001, or OHSAS 18001. While not all certifications are required, having more certifications indicates that the factory’s products are more likely to meet international standards and be of higher quality.

Step 4: Calculate and make a cost breakdown for your whole project

At a crucial juncture, it is essential to calculate the overall expenses and establish a retail price to determine if the product is viable for the market. Here is a list of costs to consider, based on previous projects we have assisted our customers with:

A. Pre-production Costs

Prototype expenses (including design, 3D printing, and handmade costs)

Factory mold costs (avoid plastic molds if possible, as they can cost upwards of $2,000)

Testing fees (identify mandatory and optional tests to save on investment)

FDA registration costs (if selling to the U.S.)

Sample and courier charges (courier fees can sometimes be much higher than sample costs)

Patent and brand registration fees (apply for PCT if budget allows, or start with the country of sale and expand as sales increase)

B. Production Costs

Product expenses (the most significant portion of the value)

Inner packaging costs (better packaging can increase retail price but also production costs)

Outer packaging costs (ensure drop-test success for outer cartons to avoid damaged products)

Packing fees (if combining cargo from multiple factories)

Production loss (account for a certain percentage of defective products)

C. Post-production Costs

Shipping fees (carefully consider shipping costs and transportation methods)

Loss during shipping (account for a specific loss rate for fragile items)

Storage expenses (balance shipping and warehouse costs, ensuring enough stock for sale)

Marketing costs (calculate the budget for advertising and divide it into the unit cost for each product)

By considering these costs, you can determine the retail price for your product and assess its viability in the market.

Step 5:  Customize a sample before starting the massive production

Upon thoroughly examining the expenses and ensuring faith in the product’s profitability, you may initiate the pre-production sample procedure. This step is crucial as it serves as an inspection sample and a vital benchmark for quality, appearance, and functionality. Additionally, you can begin marketing to select distributor clients a few months before the bulk shipment arrives at the port. The following key aspects are provided to aid you in this stage: Please provide a detailed response.

A. Determine the Material and Production Process of the product.

It is important to note that the pre-production sample is entirely distinct from the prototype, as it requires confirmation of the actual production process and materials, while the prototype serves more as a reference. Even if you create a 3D printed prototype, the materials used will differ from those used in mass production by the factory.

To ensure the best results, it is crucial to have a clear discussion with your factory or supplier, as they possess more knowledge in this field and can provide a proposal on materials and production processes to maintain quality, control costs, and minimize the defect rate.

For instance, in our project with a U.S. customer for a Self Stirring milk bottle, the prototype was made by a U.S. company, and its circuit board, along with other electronic components, were sourced from the U.S., resulting in a high product cost. To address this issue, we assisted the customer in finding a Chinese factory, redesigning the entire circuit board to meet the same functional requirements, and using components made in China, ultimately reducing the cost by 50%.

So you can note the difference of a prototype with a pre-production sample.

B. Try to manage more quantity of pre-production samples, and with more style, they are an excellent resource for you to start selling and testing the quality.

For Metal/Glass/Plastic products that require a new mold for a specific production, it is not easy to create samples as desired, since the factory must halt the production line, test the mold, and then produce the sample for you. Therefore, kindly request them to create more samples initially, allowing the factory to manage their plan to accommodate your needs.

Concerning Cloth/Bags samples, it is relatively easier to create samples as desired, as a significant portion of the process is hand-made. However, when you require more pieces, the cost is considerably higher than mass production.

C. Make improvements based on the pre-production sample.

Test it, try it, and show it to your family members and best friends for them to test and try as well. Collect as many comments as possible when you receive the pre-production sample.

Pay close attention to any negative feedback, and determine whether it is reasonable or not. If it is, make sure to find a solution during this stage, and do not wait until mass production to make changes.

Additionally, when creating the pre-production sample, some trustworthy suppliers may offer suggestions based on their experience, pointing out areas that may need improvement or are not well-thought-out.

Step 6: Select appropriate private label and packaging solutions

Investing in a good package design and high-quality packing materials can greatly enhance the value of your product, allowing it to be sold at a higher retail price. Therefore, do not cut corners when it comes to packaging design; find the right person to create an outstanding design that complements your hard work.

Below is a guide addressing the top 3 most common questions our customers encounter when applying private labels: Please provide a detailed answer.

A. How to apply the logo onto the product and what is the benefit for each option?

Silkscreen Printing: This is a widely used method for adding logos, but it’s essential to ensure high-quality printing since poor quality prints can peel off easily after some time.

Heat Transfer Printing: This technique is suitable for designs that require multiple colors. It involves applying a printed film onto the product’s surface using heat. However, the film printing process involves mold costs, with each color requiring a separate bronze mold costing around USD 100-150 per color, depending on the print area size. Additionally, a specific quantity is needed for printing the film.

Embroidery: This method is more suitable for fabric-based products, and the cost increases with the complexity of the logo design.

Laser Engraving: This technique works well on metal, wood, and acrylic surfaces, providing a more natural and high-end appearance compared to printing. It doesn’t fade or peel off and doesn’t require mold costs. The minimum starting charge is also relatively low.

Woven Label: This method is suitable for textiles and offers a higher quality appearance.

For more information, refer to the article on 11 Solutions to Private Label Your Product.

B.How about the individual packing selection?

A wise option for most new product individual packs is the color box. It is considered more high-end and a better outlook. Meanwhile, it can offer excellent protection to the product.

I made a breakdown of some important points you need to pay attention to when customizing boxes，

Opening way: Lid and Tray / Normal Opening

Material: Corrugated Paper Box / Paper Card Board Box

Insert Support (Optional): Blister Material / Foam Material / Paper Card Material

Color Box Design: Need supplier to provide an accurate figure for Length x Width x Height to finish

Color Box Sample: to confirm the printing color and size and all other details before package material production

C. What are other packing options from ColorBox to show my product value?

There are various packaging alternatives available from ColorBox that can effectively showcase the worth of your product. Options include Canvas Bags, Plastic Gift Bags, Kraft Paper Containers, and more. It’s crucial to select materials that accurately convey your product’s concept, ultimately boosting your marketing efforts.

For further insights, consider reading my article on Personalizing Product Packaging in China.

Step 7: Start Marketing your product with Pre-production Sample

Marketing plays a crucial role in determining the success of your new product, especially in today’s world where there is a plethora of product options available. Based on our experience, we have a few suggestions which I will explain in detail.

A. Have a good story about your product.

People are drawn to stories and enjoy immersing themselves in the detailed process of how a product is designed and brought to their table. Additionally, consider incorporating the story concept into your packaging design to create a cohesive and persuasive narrative.

B. Initiate marketing efforts upon receiving the Pre-production sample.

Instead of waiting for the mass shipment to arrive at your warehouse, it is more efficient to start marketing as soon as you receive the Pre-production sample. This approach saves time and reduces the need for excessive product stocking.

Most of our customers who have achieved success with their new products in the market begin their sales journey with a finalized Pre-production sample. They showcase it at trade shows or organize dedicated events to introduce it to potential channel distributors.

C. Utilize multiple marketing channels within your budget to spread your marketing information.

A strategic approach is to prepare a comprehensive set of advertising materials (such as photos, videos, and flyers) and directly send them to interested distributors to facilitate faster dissemination. Once your marketing efforts yield positive results, you should start receiving initial booking orders. At this point, it is important to assess whether you need to increase the quantity of your first batch to meet higher sales demands.

D. Secure your domain and establish an online store.

I highly recommend registering a domain for your brand on godaddy.com, as it can significantly enhance the promotion of your products. If you intend to sell your products online, you can create an eCommerce store on a platform like 3dcart.com, which provides tools to guide you through the entire process, including hosting, design, pricing and payment options, marketing tools, and reports. Additionally, I suggest registering a store on Amazon, as it can drive traffic to your products and provide complete fulfillment services.

Step 8: Intellectual Property And Compliance Certifications

A. Apply Patent for your product.

Obtaining a patent can help you extend the period of high profitability for your new product, as it requires your competitors to invest time and effort in making three significant differences from your original design. You may choose to apply for a patent in the country where you plan to sell your product or consider applying in both that country and China. If you have a sourcing agent in China, they can utilize the China patent to prevent numerous small factories from copying your product, thereby safeguarding your market share and maintaining a stable price for a longer duration.

B. Register your trademark.

Emphasizing the importance of trademark registration cannot be overstated when it comes to protecting your legal rights. Currently, the process of applying for a trademark registration is relatively straightforward. Consult your local registration institution for more information and take note of the expected duration for the registration process.

C. Establish an agreement to maintain full control over the mold or retrieve it.

Since the mold represents your investment in production, it is essential to assert your complete ownership rights. If you are working directly with a factory, ensure that they pack the mold in functional condition and seal it after production (you can request them to provide photos of the packing and sealing process). If you are placing the order through a trading company or sourcing agent, instruct them to retain possession of the mold instead of leaving it at the factory. These measures are taken to prevent any possibility of unauthorized copying.

D. Obtain compliance certifications for the countries where you intend to sell your products.

Pay close attention to compliance certification requirements for toys, electronic products, cosmetic items, and medical products. These product categories often necessitate specific compliance certifications in most countries, which are strictly required during customs inspections and clearance at the destination port. To avoid potential cargo blockages at customs and unforeseen losses, ensure that all necessary compliance certifications are obtained before production is completed. Different countries may have different certification requirements. For instance, the US customs may require CPSC and FCC certifications, while Saudi Arabia may require COC certifications.

Step 9: Start Massive Production

Congratulations on your hard work! You have reached the production stage, which marks the beginning of your new product business and the opportunity to generate profits. During production, it is important to closely monitor the quality and adhere to the delivery schedule. Additionally, you should start contacting a freight forwarder to make shipping arrangements.

Finally, I’d like to hear from you:

Is there any other questions about today’s guide?

Would you like to learn more details about manufacturing products in China?

Please feel free to share your thoughts or consult our sourcing specialist for prompt assistance.