Product Manufacturing Agreement / Template needed

[keepcalm]

Hi there,

I am dealing with a factory in China with a lighting product I am bringing to the market.

The product is currently undergoing testing here in the UK and I now need a Manufacturing Agreement template.

I don't want anything too long winded and complicated and ideally it would be pro-buyer. I've seen sites online selling them but they are all around £100 I'd rather not spend if possible.

Thanks in advance

Mark

 

[MattArnold]

Hi Mark,

What are you hoping to gain from this contract? What is it going to cover? I have developed and made many products in china and supply chain management is part of my business.

If you can explain more about what you are hoping to gain from this contract then perhaps I can advise you on what to do to put this in place.

Thanks Matt.

 

[keepcalm]

Hi Matt,

Many thanks for your reply.

I want something to ensure the product supplied matches the original approved sample. It needs to be made to the same standard, use the same components and so on... Indemnification that holds me harmless from any injuries, damages, liabilities, costs etc if the product turns out to be faulty. Details of how the payments are made and fulfilment of the order to the port etc.

What line of business are you in?

Cheers

Mark

 

[Paul Kelly ICHYB]

Mark,

do not bother with the contract - it ill not be worth the paper it is printed on!

Pay by l/c with approval terms and make sure that you have OGQC in place. That will offer you the best protection.

 

[GraemeL]

Mark,

do not bother with the contract - it ill not be worth the paper it is printed on!

Pay by l/c with approval terms and make sure that you have OGQC in place. That will offer you the best protection.

Spot on.

Whose legal system are you intending to use if an 'agreement' is broken? Chinese factory will not use UK or ignore it. Would you use Chinese?

There is no way you can get out of being liable to your customers for anything wrong with the product. The person who invoices the customer carries the can.

Don't assume you will get any recompense from the factory if the product fails to meet your spec. You must spend money on QA and QC in China before shipping. If you are concerned about a tiny spend of £100, I have great doubts about your knowledge and resources to deal with this project. This is meant to be a helpful warning!

I have been importing for 20 years.

You have visited the factory?

G

 

[MattArnold]

Yes, the above comments are all spot on!

As pointed out, a UK contract means nothing in China when push comes to shove. They will only pay lip service to any document like this at best. Better is to have a good company to work with, and have a good relationship with them.

My business is product development, supply chain management and production in Asia.

As such, I am careful about the companies that I do business with and vet them first before working together.

Having a spec and confirmed BOM (Bill of materials) in place, plus a full technical file that the factory understands is key. If there are any testing procedures that need to be followed then you must satisfy yourself that these are being followed.

Do you have a technical file for the product? Who designed and developed it? Yourself? Or the factory there? Or do you just have a sample?

Of course in manufacturing, there will always be products that fail for reasons that you didn't expect. You need to monitor these and adjust the QA if needed.

Again, are these products certified and tested to standards for sale in Europe? CE marking, RoHS compliance and the like? Do you have copies of the test reports for any approvals etc? Are the test done by a reputable test house over there? Etc etc.

As a retailer of these products, you will need to agree with the factory how defects will be handled. Since you will not be able to send them back - in most cases China customs won't allow the goods to be returned.

Payment terms need to be discussed and agreed. It you want something out of their norm, don't be surprised if the cost goes up to finance it...

Have you been to see the factory/supplier? Do you know what they have in place? Would you be able to determine if their systems are robust?

If you want to discuss more, PM me and we can take a call. Might be easier than typing war and peace here! I am happy to give advice and help if I can.

Welcome to doing business in Asia!

 

[Moneyman]

GET AN AGENT OUT THERE TO CHECK THE PRODUCTS. They also check the company as there are loads of one guy and a phone factories. They might even save you more than their fee.

Total waste of time trying to tie someone down to a contract out there. They all have a habit of changing the specs at will if they can get away with it. Once the cash is in their bank you will find that suddenly they don't speak English anymore if you have problems. There are exceptions but spending upto 20% on having every item checked prior to shipping is well worth it. Much cheaper than dealing with returns in the UK and angry customers.Especially for the third and fourth order.
Order 1 normally good. mistakes taken out
Order 2 small mistakes left in
Order 3 All mistakes left in
Order 4 All mistakes left in plus the mistakes from 1 and 2
With south America they often jump to stage 3 on the first order. Pakistan, Tunisia and turkey are normally very good.
BUT still get an agent out there or their agent in the UK.
Lastly get everything in plain white boxes and then have outer box printed in Europe. All countries tend to drop the packing quality quickly as they don't tend to worry about marketing and presentation in non eu countries.
been there done that learnt my lessons.

 

[keepcalm]

Thank you for your replies and points noted.

I have not visited the factory or have the spare funds currently to do so.

The samples I have received are of a good standard. I have received all the test reports and CE certificates for the product itself as well as all the components used within it. I will compile a technical file with these documents.

It is currently being tested here in the UK by the Lighting Association Lab and I hope this will be compleated in a couple of weeks.

I'm certainly willing to spend the money on having an agent to oversee the quality assurance and control. I'd be grateful of any recommendations please. The factory is in Fushun.

Thanks

Mark