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I
have invented a great product, and I am concerned that if I share the
blueprints for manufacture, the idea will be stolen. What can I
do to avoid this?
As far as your protection is concerned, the
first thing I suggest you do, if you haven't already, is to take a copy
of your blueprints and every other bit of information you can find
about your product, including a prototype or at least a picture of the
prototype if you have one, take two copies of all that information, and
put them in an envelope posted to yourself, and from yourself and mail
them out. When you receive them, make sure the post mark date is
clear, and put those envelopes in a safe place, one in your home and
one in a safety deposit box at the bank, perhaps. Then take your
designs to a lawyer and start the patent process; then send your
designs to me so I can start the manufacturing process.
I
have heard that piracy is rampant in China. But I would like to
not only manufacture but sell the product in China. Do you have
any advice?
The market that you are worried about in China
is controlled by companies that respect the patent regulations laid
down by the WTO.
In China, like any country, there will be patent infringements, and
there is nothing you can do to avoid it. But, as you are
certainly aware, like most societies, China has its rich and China has
its poor. You generally see patent infringements in shops for the
poor, and those shops aren't making much money, and the people they
serve don't make much money, and you are not concerned about their
business, as even the bosses who make money from these markets do not
make enough to even be considered middle class.
Then there are the
middle class, a group of consumers who shop at stores where they know
the products are not fake, as these consumers are educated about
quality and buy brand names. This is the group that you care
about and, their number exceeding the entire population of the United
States, are an excellent market. They are easily accessible
through distribution networks owned by Chinese and multinational
corporations, who respect patents and through whom you should sell your
product in China.
I
am a small business with a great product. What should I do?
During this process,
you should make sure your idea is protected. If you haven't
started the patent process, be very careful with whom you share your
idea. Right away, you want to post your designs in an envelope to
yourself and from yourself; when you receive your designs, make sure
the post mark date can be clearly read and keep your unopened envelope
in a safe place.
The
first thing that you should do is to get a prototype. Prototypes
can be built yourself or built by a special manufacturing company in
the country where you reside. It is rarely cost-effective to have
a prototype made overseas.
Next,
protect your idea by beginning the patent process.
After
you have consulted a lawyer, whose number you should receive for the
BAR association (in the USA) or equivalent organization (in other
countries), you should send us your designs and a prototype so we can
help you find manufacturing costs.
While
we are finding your manufacturing costs, you should be looking for
distributors for your product. Most of us do not have the
capabilities to reach millions of end-consumers everyday, but there are
retail giants who do. Find retail stores whose product line
should include your product, then contact those stores to learn how to
be one of their suppliers.
The
key is research. Be prepared to read a lot of information from
many different companies so you can begin to understand the process.
Why
shouldn't I manufacture my prototype in China?
Unless your product
is in an industry with very standardized equipment (for example, wood
cutting), it will be very expensive to manufacture a prototype
here. What we do when making your product is design a whole
assembly line, complete with molds (for plastic pieces, etc) and the
capability to mass produce your product. The costs for setting
this up for a single product is astronomical, but when you divide that
cost up into ten thousand pieces or so, your costs per piece are
greatly reduced.
If
we were to produce a prototype for you here, and you were not pleased
with that prototype, you would be left with all the costs of producing
an entire assembly line. It is best that you manufacture your
prototype yourself or with a company specifically set up to manufacture
it, then send us the prototype, and we are certain to produce it
exactly as you want it
I am interested in
selling through major retailers like Home Depot and Dick's Sporting
Goods. What should I do to prepare?
Most retailers are going to mark your product up 20-60%, depending on
the retailer. So, first you need to figure out your retail price
and we will help you to get the manufacturing and shipping cost
down. In some cases, with extremely competitive industries, that
can get tricky, and involves manufacturing when raw material costs are
low, shipping when oil is low, and balancing that with warehousing
costs. Not to worry though, we'll do most the work for you here.
Also, most retailers require two things, which will cost you around
$1,000:
1) a Dunn & Bradstreet number; get more information at www.dnb.com.
2) a UPC number; get more information at www.uc-council.org.
How do taxes work?
We will take care of Chinese taxes for you.
Import taxes are the business of your country's customs department.
The US Customs Department publishes a list of tariffs in what is called
the "Harmonized Tariff Schedule." You can go to the website
http://www.usitc.gov/taffairs.htm to view this list or to classify your
product with an HTSA number.
If you have a new product, you need to get a binding for an HTSA
number. You do this by sending your patent information or product
designs to the
following address:
Director of National Commission Specialist Division
US Customs
ATTN: CIE/Ruling Request
1 Pennsylvania Plaza
10th Floor
New York, NY 10119
They will get back to you with a binding on your product, which will
provide a legal basis for calculating your import taxes.
How much does it
cost to clear customs?
These fees are based on prices in L.A. and are provided only as an
estimate; your particular costs may be much different:
Entry: $85 - $125
Handling: $65
AMS fee: $25
Duties: Import tax based on commodity can be found in the US Customs
Harmonized Tariff Schedule
Merchandise Processing Fee: 0.21% of total commercial invoice
Harbor Maintenance Fee: 0.125% of total commercial invoice
Bond Fee: $3.50/$1000 of total charges
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