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[Paskran]

I am looking to entering national phase in China later.
I know China is one of the most difficult countries to have a license agreement.

But, what if I can make my licensee agree that they will only purchase from the suppliers which have license agreement with me, in case they look for manufacturing abroad?
Then, Chinese manufacturers at least wouldn’t be able to export to USA without contract with me, right?

Stipulating that only my licensees will carry the product of subject in USA, does it make sense?

[dtpater]

Hi Paskran,
                Personally I prefer to deal with Taiwan Manufactures (or Companies that have their Head Office in Taiwan and factories in China), look for trading companies in Taiwan who are more than 10 years old and turnover more than $5,000,000- per year and have different approvals for design from Europe and the USA.

Hong Kong is also another good option, due to the past English influence, many companies in Hong Kong are good at sourcing 

If you go to China, look for a manufacture's who has been in business for more than 20 years and has local government approval, there are many companies in China that vanish over night, so look for long term companies.

Many Inventors have this backwards, if you deal directly with a Asian Manufacture and License to them, then they have control, you get paid directly based on the manufacturing cost and aiming for 8-12% of the FOB Pricing (Manufacturing cost)

Just received a commission purely based on friendship and trust with the owner of a Taiwan Manufacture, then paid me $1.45 per unit instead of the 30 cents I asked for, its all about relationships and friendships.

Look to do a (Brokerage and Development Agreement or a version of a Licensing Agreement)
 

http://www.manufacturers.com.tw/


The above information is on a as is basis and is not a recontamination or guarantee!

[Paskran]

Thank dtpater,

You actually provoked a question I have had.
Say I have patent in both USA and Taiwan and I established a license contract with a manufacturer in Taiwan which then exports the goods to USA distributor..
In such case, do I collect royalty from both companies in USA and Taiwan?

[dtpater]

It would generally be only royalties from the manufacture at the FOB Pricing, but I have organised both royalties and commissions from the Importer for the same new product, but you will need to do all the leg work and create the relationships for all parties.

I have seen greed and mistrust destroy many great new products (4 so far), buyers do tend to give a new product only one chance, if you stuff it up, well its gone.

Also remember Importers need to invest in new products and price point are issues that should be considered, we have a saying here in Australia, better a bird in the Hand, then the 2 birds in the Bush.

Many Inventors talk about the 2 birds in the bush about what could be, I am always going after the one the hand, being more reasonable with deals can turn out better in the end.

due to the relationship with the owner of the small to mid size manufacture in Taiwan.
 
 

[Paskran]

Thank you for great advice!
This helps me really a lot.

[dtpater]

If I can help Inventors reduce their headaches, then its all worth it!

I like this Industry because its never boring and always a very big challenge