How to Manage Your Overseas Manufacturing Relationship

Outsourcing manufacturing overseas – especially to China, but also, more recently, countries like Vietnam and Cambodia as well – has become an established way of operations for many American companies. There’s little wonder why – China’s manufacturing companies often offer a key advantage over the domestic ones with regards to the time and volume of production, costs, and at times even quality. In addition, while finding a domestic manufacturer as a small business can be a challenge, many Chinese factories will gladly work with a smaller company. All of these factors make more and more American companies look into outsourcing their manufacturing operations overseas even in the current political climate.

Even though outsourcing manufacturing overseas can provide a key economic and business advantage, it doesn’t come without risk. The key to avoiding these risks, potential loss of money, or even legal disputes is to properly manage the overseas manufacturing relationship. In this article, we present some general advice on how to achieve a relationship with your overseas manufacturer as hassle-free as possible.

Choose the Right Partner

One way to avoid many potential issues and disappointments from the very beginning is to carefully choose the right manufacturer. In order to be able to do this, you first need to accurately define your needs. Before you sit down and research potential manufacturers, you need to have a set of definite criteria that will guide your actions.

Once you’ve defined your needs, take your time and do the research thoroughly. What can be a good indication of a solid manufacturer? You may want to look at the quality of their samples, as well as their willingness to communicate with you and the quality of these exchanges. After shortlisting the candidates that seem to best suit your needs, ask for quotes and references. Before finalizing the deal, you may want to visit the manufacturing company in person. However, if such a trip is not possible for you, you may use a third party’s onsite evaluation or an audit as the key factor in making the final decision.

Carefully Draw Up Final Contracts

In order to avoid any misunderstandings, take care to draw up the final contracts. Your contract or purchase order must be clear for both parties, free of ambiguities, with all terms and conditions clearly stated. It is advisable that you use a translation company that has experience in translating offshore manufacturing contracts and is familiar with the law of the country where the manufacturing will take place.

Appreciate Cultural Differences

Cultural differences go much beyond greetings and ways of eating food. Where business relationships are concerned, cultural differences will play a role in how both parties perceive each other and each other’s actions. When business problems arise, each party may have a different way of communicating the issues, their needs, and potential solutions. Being mindful about such differences can help solve problems quickly and avoid costly legal disputes. Therefore, the importance of developing cultural awareness and the understanding of the needs of your manufacturing partners should not be underestimated.

When in Doubt, Look for Guidance

Maintaining successful and effective business relations with your overseas manufacturing partner will, at times, be challenging. However, even when the situation seems critical, it can be resolved with the help of professionals and entrepreneurs experienced in dealing with overseas business. Use your network of friends and business relations and don’t be afraid to look for counsel from people who may have faced a similar challenge in the past.

Also, consult an attorney experienced in international business law and litigation. BRADFORD, LTD is exactly what you need when looking for guidance or facing a legal issue related to your relationship with an overseas company. If you have any question related to manufacturing, patents, trademarks, or IP rights, do not hesitate to contact us. We offer comprehensive legal assistance for businesses and we are confident that you will benefit from our counsel. Please contact us or call 303.325.5467.

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BRADFORD, LTD

Our national law firm works closely with clients in all sectors of technology, healthcare, and hospitality to develop effective and efficient strategies for dealing with litigation, corporate, regulation, and the competitive market.

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