Quality Rating Systems – Single A through 5A

There is still a stigma in many peoples’ minds about the quality of goods produced in China. With recent events leading to news about toys, it is understandably a very important topic. What you need to know is that many manufacturers utilize a rating system for their products. This rating system can give you a gauge for your products’ quality and also give you a better understanding of reasons for product cost. This is very important when comparing similar products from various sources.

While this system, for the most part, is governed on the “honor” system, you can inquire with the manufacturer about what makes a particular product fall into a specific rated category. There isn’t a standard rating system in place and the manufacturer typically determines what qualifies a product for each level. Some of the differences between ratings involve levels of material quality (plastics construction/thickness), life of the product, number of uses, thickness of coatings/finishes and components. On a side note, this does not mean that Mattel (the toy company) has been selecting a lower quality rated product that includes utilizing lead paint. This issue is caused when the factory isn’t properly informed of where or how they sourced their raw materials (or in the worst circumstances didn’t know or care).

Single “A” though “5A”
The rating system is comprised of “A” rating indicators, the more of them, the higher the quality and cost. Every country typically has a particular acceptable “A” rating for a product and the manufacturer is usually familiar with the details of each country’s requirements.

Let us use kitchen and bath faucets to explain this point further. “AAAA” and “AAAAA” are acceptable quality grades for faucets utilized in the US. The differences in these two grades are great and so is the cost. The “AAAA” product might have a typical lifespan of 10,000 uses (turning the faucet on/off), is constructed with a plastic valve and has a lower quality finish. In comparison, the “AAAAA” product has a lifetime warranty, includes a ceramic valve and high quality finish. Many times you can mix components from different grades to match the requirements of your market, consumer, or grade.

Do not always go for the higher rated product just because of the higher rating. Just as any smart consumer would do, get all the specifications and ask the right questions. Working with a manufacturer that has implemented a rating system like this means they are organized. Organization is key when there are so many variables that can mean the difference of having a profitable landed cost or not.

The time of China only producing cheap knock-off goods, toys or furniture has long since passed. This is an era where high quality goods are available if you look in the right places. As an example, I was able to source an identical “waterfall” roman tub style faucet/fixture to that of an item sold at Home Depot Expo ($1,200) for 7% of retail (FOB) with a “AAAA” rating.

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dylan@sourcejuice.com

December 21, 2007 | Filed Under Quality Control, Sourcing Guides | 1 Comment

Private Labeling & Criteria for Selecting the Right Manufacturer

“Private label products or services are typically those manufactured or provided by one company for offer under another company’s brand.” –Wikipedia. This is the name of the game for China and for the most part, the products you buy here in the United States are not really manufactured by the name on the label. In some instances most of the big box or clothing stores you frequent have an inventory almost entirely made up of their own products under their own brand or multiple unaffiliated brands. This is not just a game for the big boys, this can be accomplished with the same everyday products under your own company’s label. Welcome to the club, we are about to pull back the curtain to reveal what you need to know in developing your own private labeled line of products.

Take notice that every manufacturer has its own guidelines, requirements and procedures for producing a private label product. Not all manufacturers offer this service or have the capability to laser-etch/carve logos etc. The first step is to source the product you like and then follow-up with the manufacturer opening a dialog about private label opportunities.

Lets get off on the right foot by stating that selecting the right manufacturer to work with may be the quintessential most important decision to make. Over the next few paragraphs we will detail some choice areas for consideration so that you can ask the key questions that will determine your success. You may find that this article is just as much of a primer for selecting the right manufacturer to work with as it is about developing a private labeled product.

Quality Assurance Testing
When you evaluate a brand you think most importantly about quality. It is important to court your prospective manufacturer inquiring about any quality assurance or rigorous testing that may be performed prior to shipping the products to you. You don’t want to damage the brand’s integrity with poor workmanship. Find out if your manufacturer implements or maintains any manufacturing certifications, process controls, quality management or assurance systems. Depending on the manufacturer this might be a free service that might put one manufacturer above all the rest. In my experience with private labeling kitchen and bath faucets, Globe Union offered unparalleled testing measures while keeping the price competitive. What else do you expect from the largest faucet manufacturer in the world. Are you familiar with the “Premier” faucets at Home Depot? They are made by Globe Union and if you only knew that Home Depot was making over 80% profit margins on them…

Designs, Legal Issues, Copyright & US Umbrellas
Most of the smart private labelers have already submitted for legal protection for their products under US copyright or other umbrellas. The manufacturer may have other customers, which may have invested large amounts of time and development monies into a particular design. Though some manufacturers will allow it, it is not a good idea to use someone else’s design. Fear not, in some cases this leaves an opportunity to design your own product. If there isn’t much of an artisan in you, then many times there will be some kind of stock/standard item that you can just slightly modify. This is all industry specific information, but it is something you should inquire about. Just because there aren’t any laws to prevent the manufacture of a protected product in China, there are in the US when you try to sell it.

Retail Packaging
One of the main selling points to a private labeled product is the opportunity for premium packaging. Obviously it is nice to have the logo on the product, but the packaging is where the consumer will first identify with the brand. Typical packaging for products that come out of China will come in a standard white/brown box or packaging with a marketing scheme that makes it obvious that it came from another country. This is one of the first places to incur an additional landed cost for your item. This amount can vary depending on the packaging material and the number of colors printed on the retail box. Remember that in the eye of the consumer, the better the packaging the more solid the brand.

Support/Defective Products/Warranty
Be prepared for defective products, this is inevitable, but less likely depending on the amount of quality assurance measures your factory implements. It is too costly to ship your product back to China for a refund, but you need to be able to accept returns, as this would hurt your brand’s reputation if you did not. You should combat this problem by building in an additional 3% of extra product into your order. You should handle warranty issues in the same way. Confirm this is the case, but the manufacturer will likely give you a credit on the backend transaction of your next order. Unless you have invested more money into a AAAA+ rated product, it is best to offer a short or limited warranty. Do not expect a lot of support from the manufacturer. It is a good idea to do your due diligence in the beginning, learning as much as you possibly can about the product before launching your line.

The Cost Comparison for Private Label
This is an area you will have to explore for yourself as it can vary entirely on the product category, quantity of order and manufacturer. In the case of Globe Union’s private label plan for kitchen and bath faucets, all the costs for the private label were built into their pricing schedule, which was very competitive with non-private labeled products. In terms of having logos laser-etched onto stainless steel kitchen sinks I have seen this raise the price $5-$10 per sink depending on the order size and use of premium packaging.

Branding Development Ramp-Up Time
There are two main elements that can determine ramp up time for having your private labeled product produced: manufacturer preparation and your own preparation. From your end, you may outsource the design of your retail packaging, which may take several weeks. In addition, if you have any design changes to the product other than imprinting logos, this is also on you. The manufacturer will have to prepare to source the required materials, create moulds, implement changes to their production line, QA, etc. It is important to inquire about the ramp-up time as it will vary depending on the factory, its staff and the specifics of your order. After everything has been decided, pricing agreed upon and detailed to the manufacturer, you will want to receive a sample of the final product before authorizing production. Remember, you will of course need to make changes to your own schedules for completing work to meet deadline/timelines. Get started early, I have seen manufacturing ramp-up timelines requiring up to 6 months!

Minimum Orders
Minimum orders should not be an issue if you are already importing. It is standard to purchase at-least a container of goods while importing from China, but many times you must commit to purchasing a certain quantity of containers annually to obtain a private label item.

Certifications, Licenses and Incorporating
Many times licenses and certifications must be registered, applied and obtained by the branding company and not the manufacturer. It is best to do your due diligence to find out what if any requirements that your brand should have. Do not take the manufacturer’s word on it, check into it yourself as it will not be them who will have to deal with the ramifications. This will also affect some decisions you may have to make during the pre-manufacturing and deal-making phase of your import venture. Try locating similar already imported products in the US and reviewing the packaging for identifying marks of their certifications. Depending on your product and scale for distribution, you should also consider incorporating.

Expanding the Product Line
Leave room for expansion; make sure that the manufacturer you select has accessory items or a variety of other styles to incorporate into your line. If you purchase the various products for your line from different vendors you will have to start from scratch with each one. This way all your packaging and logos retain their continuity throughout the line.

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dylan@sourcejuice.com