Designers coming to China

Western Designers are starting to partner with Chinese factories and their design teams, to develop new products faster, some of them settling down in China, others visiting for one to four weeks.

Some of these factories have very large showrooms with sample products; providing good inspiration, designers have access to all production materials and realistic prototypes are made in a day or two.

The advantage is speed; the disadvantage can be substantial cost creep. Some customers would consider this a marketing cost, being there first and win. In a traditional bidding environment the price would be set in stone, some cost creep would only happen because of design and material changes.  

A very common trick used by supplier is the “Minimum Order Quantity” or “Minimum Color Quantity” numbers: MOQ or MCQ. These numbers can change with a new material, or is not communicated until a time close to production. When the customer can’t meet the MOQ/MCQ the unit price will increase, which is hard to negotiate down from thereon.

My feeling is that bidding should always be done with multiple suppliers, no matter the urgency, and that the tooling cost/upfront investment should be kept in check to avoid getting locked into a single supplier. I am surprised to see how many suppliers use the customer’s own tooling as leverage against them.