Top 10 Things Every First Time Entrepreneurs Should Know about Manufacturing in China

Finding the right factory in China can cut months off your go to market timeline and save you from manufacturing headaches. The checklist below was built for first time entrepreneurs who are sketching their idea or have an early prototype. You will learn where to search, how to vet factories, what to put in an RFQ, how quotes are structured, how to protect your IP, and what compliance looks like when you import into the USA, Canada, the EU, the UK, Australia, and New Zealand. Use this as your field guide before you share drawings or send money.

1) Define exactly what you want a factory to make

Factories are great at building to spec, not at guessing. Before outreach, assemble an RFQ pack that includes drawings with tolerances, materials and finishes, a simple BOM, expected order quantity, packaging requirements, performance or safety standards, quality criteria, and target delivery terms. This lets suppliers quote apples to apples and keeps your purchase order consistent with what you asked for.

What to do

• Prepare a one page overview, CAD or dimensioned drawings, BOM, quality criteria, packaging callouts, and sample photos.

• State your target Incoterm, for example FOB or FCA, so every quote uses the same cost and risk split.

2) Find suppliers in the right places

Combine online directories with trade fairs and referrals. Trade shows like Canton Fair or HKTDC help you meet vetted exhibitors by category, see product depth, and understand a supplier’s focus. Online platforms are useful for building an initial list, then you validate.

What to do

• Shortlist 10 to 20 suppliers across fairs and directories, then filter to 5 to 8 for detailed RFQs.

• Favor suppliers with product families that match yours, export experience, and recent models in your category.

3) Vet the business before you share details

Confirm the company is real and that its business scope covers your product. Ask for a copy of the Chinese business license and make sure the legal name matches the bank account on invoices. Basic checks early can prevent expensive problems later.

What to do

• Verify registration, address, legal representative, and business scope.

• Ask for ISO 9001 or relevant certifications and any recent third party audit summaries.

4) Write RFQs that get comparable quotes

Your RFQ should specify materials and grades, finishes, color callouts, dimensions and tolerances, packaging specs, test methods, quality criteria, sample requirements, tooling ownership, target quantities, and preferred Incoterm. Quotes vary if one supplier includes packaging or inland freight and another does not, so be explicit.

What to do

• Request unit pricing across quantity tiers, tooling charges, sample fees, lead time, payment terms, and monthly capacity.

• Require quotes under the same Incoterm, for example FOB Shenzhen or FCA Guangzhou, so comparison is simple.

5) Protect your IP the China appropriate way

Western NDAs often fail in Chinese courts. Use a China specific NNN agreement, non use, non disclosure, non circumvention, in Chinese, governed by Chinese law, and enforceable in China. Register your trademark in China through the national system. File early to avoid brand squatters.

What to do

• Sign an NNN before you share drawings or pricing, then use a manufacturing agreement at production.

• Start your China trademark filing so your brand and packaging are protected.

Need help right now? If you want expert eyes on your RFQ pack or supplier list, subscribe to Factory Library. Members can speak to experts and download the exact guides and templates needed to explore manufacturing overseas, including RFQ templates, BOM examples, supplier scorecards, and inspection checklists.

6) Know your market’s compliance rules before you build

Your destination market drives design choices, labeling, and testing. In the EU you may need CE marking for applicable categories. In the UK many products need UKCA. In the USA, importers are responsible for meeting all applicable rules, and many categories require specific testing and documents. Australia and New Zealand have mandatory standards for some products. Build these requirements into your RFQ and PO so the factory knows what to design and test for.

What to do

• List the exact directives or regulations that apply, define the tests, and name acceptable accredited labs.

• Keep reports and certificates tied to your SKU and packaging artwork.

7) Set a concrete quality plan with inspections

Quality is a process, not a promise. Define a golden sample, acceptance criteria, AQL sampling levels, and inspection points. At a minimum, plan an on site pre shipment inspection against your criteria and include packaging checks. Use accredited labs for safety or performance testing when needed.

What to do

• Include inspection rights and AQL tables in your purchase order.

• Require corrective action plans for any major defects before shipment authorization.

8) Choose the right trade terms and understand landed cost

Incoterms affect price, risk, and paperwork. Beginners often use FOB for sea freight or FCA for other modes, since costs and risks hand over at a clear point. Your landed cost also depends on tariff classification, freight, insurance, customs fees, and local taxes. Set your Incoterm during quoting so suppliers price consistently.

What to do

• Pick an Incoterm before quoting, then confirm it on your invoice and PO.

• Ask your forwarder or customs broker to classify the product and estimate total landed cost.

9) Screen supply chains for forced labor risk

Shipments linked to high risk regions or inputs can be detained in the USA or other markets. Ask suppliers to map upstream materials and keep documentation that proves origin and labor conditions. Avoid inputs you cannot verify.

What to do

• Obtain supplier declarations and supply chain maps, then review for gaps.

• Keep traceability records that match your commercial documents.

10) Use China specific contracts and bilingual POs

Make your manufacturing agreement and purchase orders specific, in Chinese and English with one controlling language, governed by Chinese law, and enforceable in a Chinese court or arbitration body as advised by counsel. Spell out quality criteria, inspection rights, acceptance and rejection, payment stages, tooling ownership, confidentiality, and penalties for late delivery or failed inspections.

What to do

• Attach golden sample photos, drawings, AQL, and packaging specs as exhibits to your PO.

• Pay only to the registered company’s bank account that matches the business license.

Red flags to walk away from

• Quotes that are 20 percent below the pack with vague specs

• Refusal to show a business license or to put Chinese legal entities on documents

• Personal bank accounts or mismatched company names

• No willingness to accept inspections or to fix major defects before shipment

Ready to move forward

If you need help getting started, subscribe to Factory Library. Members can speak to experts and download the guides and templates necessary to explore manufacturing overseas, including RFQ packs, BOMs, supplier evaluation checklists, AQL tables, and inspection plans.

Important note: This article is practical guidance, not legal advice. For contracts, IP, and market specific compliance, consult qualified counsel and accredited testing bodies.