How to manufacture a product, from prototype to first shipment

The steps

1. Prove the idea with a prototype, and protect it first. A rough prototype answers whether the product works; a looks-like, works-like prototype is what a factory can quote from. If the idea may be patentable, a US provisional patent application holds your filing date for 12 months from the date the provisional application is filed^[1], and that period cannot be extended^[1]. Timing matters more if you may want patents outside the US: showing it publicly, offering it for sale or selling it before you file, even where US law forgives it, may preclude patenting in foreign countries^[1]. Use a non-disclosure agreement with every factory that sees the design.
2. Write the specification. List every part and material, the dimensions and tolerances, finishes and colors, how it is assembled, how it is packed and labeled, and how you will test it. For soft goods this becomes a tech pack; for hard goods, drawings and a bill of materials. The more of the product the spec pins down, the less a factory has to guess, and guesses end up in the price.
3. Choose how it will be made. If the design is yours, the route is contract manufacturing: a factory builds to your design and you own the product; put ownership of the design and any tooling in the contract. The alternative is to adapt a design the factory already makes; the OEM and ODM split describes the two. If a part is molded, cast or stamped, ask for the tooling as its own line: what it costs, who owns it, and what happens to it if you move factories.
4. Request quotes overseas-first, and read the shipping terms. Send the same spec to factories in more than one country, plus one at home for comparison, and ask each for the price at two quantities, the MOQ, the sample cost, the lead time and the Incoterms rule. The rule changes what the price includes. Under EXW, the seller delivers when it places the goods at the disposal of the buyer at a named place (like a factory or warehouse)^[2], and it does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export^[2]: pickup, export clearance and the trip to the port are yours. Under FOB, the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment^[3], so those origin costs are in the price and you pay from the ship onward. Ask the domestic factory to quote delivered to your warehouse, so it lines up with the others once they are landed.
5. Sample, then approve a pre-production sample. Budget for more than one sample round. Approve a sample made with production materials and tooling, sign it and keep one: it is the standard the order is judged against. Before the balance is paid, have the goods checked against it in a quality inspection.
6. Meet the product rules before you ship. If a CPSC rule, ban or standard applies to your product, the manufacturer, which the law defines as any person who manufactures or imports a consumer product^[4], must issue a certificate of compliance. For a product not made for children it is issued based on a test of each product or upon a reasonable testing program^[5]; a children's product must first be tested by a third party conformity assessment body accredited^[5] under the Consumer Product Safety Act. If you import, that is you. Unless an exception applies, every imported article must also be marked with the English name of the country of origin^[6], as legibly and permanently as the article allows and in a conspicuous place, on the article itself or, where the law allows, on its container. Put the marking and the testing in the spec so the factory plans for them.
7. Plan the import. For ocean cargo, most importer security filing data, including the manufacturer, the ship-to party, the country of origin and the tariff number, is due no later than 24 hours before the cargo is laden aboard the vessel at the foreign port^[7]; the container stuffing location and the consolidator may follow later, before the ship arrives. A customs broker can file the entry, but as importer of record you are ultimately responsible for the correctness of the entry documentation^[8], and CBP can examine any shipment, in which case the importer must bear the cost of such cargo exams^[8]. Samples and small orders not exceeding $2,500 in value^[9] can use informal entry, which is simpler, except for articles valued in excess of $250 classified in Chapter 99, Subchapters III and IV, HTSUS^[9]. Ask your broker whether your goods fall under that exception before you rely on it; a production order may well be above the line anyway.

What customs charges duty on

For goods entering the United States, the price the duty is based on is exclusive of any charges, costs, or expenses incurred for transportation, insurance, and related services incident to the international shipment^[10]. So the international freight and insurance are not part of the price duty is charged on. Ask any factory that quotes a delivered price to break out those lines on the invoice, so the entry can declare the goods' price without them.

Comparing quotes landed

A lower unit price does not mean a cheaper product. The shipping terms, the freight and the duty can change which quote wins, so line them up the same way.

Line	Factory A, EXW	Factory B, FOB	Domestic factory, delivered
Unit price	$3.20	$3.55	$5.10
Goods, 4,000 units	$12,800	$14,200	$20,400
Pickup, export clearance and trucking to the port	$600	In the price	None
Ocean freight and insurance	$1,400	$1,400	None
Duty at 6.5% (assumed) of the goods price	$832	$923	None
Broker, entry fees and port charges	$450	$450	None
Trucking from the port to your warehouse	$500	$500	In the price
Landed cost	$16,582	$17,473	$20,400
Landed cost per unit	$4.15	$4.37	$5.10

Illustrative figures, not a quote. Real prices depend on the spec, quantity and factory.

In this example Factory A still lands cheapest, but its lead over Factory B shrinks once pickup and export clearance are added, and Factory B's price already covers them. The domestic quote costs more per unit and may still win on lead time, reorder speed or a smaller minimum, which the table does not price. Put every quote you receive through the same rows, with your own broker's duty rate, before you choose.

Getting quotes

We source overseas-first and sell the finished product to you. The price per unit we quote includes our margin and names its Incoterms rule and place, which tells you which rows of the table above it already covers.