Contract manufacturing in China: The brand is the hard part

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I have not done much blogging this year, as the news has been so universally awful that I’ve been unable to summon the enthusiasm to comment. Short version, it is ugly out there and it will only get worse before it gets better. Plan accordingly.

However, as someone who works with entrepreneurs and inventors on a daily basis, there is reason for hope. People keep coming up with cool new ideas they want to bring to market, and they ask for our help. PassageMaker had a solid growth year in a bad economy, so I guess I should be Chatty Cathy these days, but a combination of so much work and so little global good news as dampened my blogging spirit.

My one comment for the day deals with bringing a new product to market. Our contributions to the value chain – sourcing, supply chain management, contract assembly, logistics – are really the easy parts. The hard work is building a brand and getting it recognized in the marketplace.

If you are thinking about launching a new product, PassageMaker can take the headaches out of the production process. But we don’t (and can’t) help you sell it.

Too often in the last few years, I’ve seen clients invest thousands in engineering, patents, sourcing, tooling, etc., with little thought given to how to get the product in front of buyers. If you are planning a new product launch, assume that you are the only one who thinks it is the greatest idea since the wheel and focus on how you are going to convince the rest of the world. And budget accordingly.

My advice:

1 – The internet is great, but not everyone knows how to use it. If your plan is social media and SEO, make sure you are really the expert you think you are. Or have the money to hire that expert.

2 – If you are going Big Box, understand what that means. A PO from a major retailer can be a million bucks on paper and negative income in reality when you consider the lead-times, warranty agreements, performance penalties, etc.

3 – Advertise if you can. Twenty-some years ago, Coca-Cola assumed that their brand was so strong that they could stop advertising. They ultimately lost market share to Pepsi and had to spend a fortune to get back in the game. If you are launching a new product, nobody knows who you are, so you have to get the word out.

4 – If you can’t do it yourself, bring in investors who can help. I’ve seen businesses with ridiculous numbers of investors, none of whom contributed to making the business a success other than providing short-term financing. If you are going to add an owner to the mix, make sure they have skills to make the company a success long-term.

Basically, setting up a solid China supply chain is an important step, but that pipeline only has value if you can move product through it. We’ll help you deliver, but nothing happens until you sell something. Worth keeping in mind in this tenuous world we live in.

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