What's the best way to find top-quality engineering and sourcing partners in China?

Full Question I've been watching a number of your videos and you hit on many points that I will need to address in building my products.

I am an entrepreneur who has designed luxury machines that run with a smartphone app. I'm producing the casings in the US and want to source the components from China. These components are, in general: • Digital display •Touch sensor • LEDs • Speaker driver - currently looking at Japanese Flat Panel Speakers • Internet radio chip w/basic app - currently talking to SMSC (Smart Mixed-Signal Connectivity), Keystone Semiconductor, Frontier Silicon

I'm currently seeking funding and an engineering partner. I see my engineering partner as someone who will source the components 'off-the-shelf' from China and have them shipped to the USA to be assembled on a PCB (Printed Circuit Board) and inserted into the casings. However, after watching your videos I would like to ask your advice on your thoughts on how to work with Chinese suppliers.

Since I'm a small startup, I would like to find a quality sourcing partner that will: • Research suppliers for each component needed based on input from my engineer • Negotiate price and payment schedule • Provide Intellectual Property (IP) protection • Oversee production • Ensure quality control • Ensure on time delivery.

Can you recommend a partner that would provide all of these services or various partners that provide each important service?

Answer Many agents claim to be a one-stop shop providing in-house inspection, engineering, logistics and sourcing. But I have found these skills are highly specialized and it saves money and time to bring together various partners who are the best in their individual fields. Granted, these partners may be coordinated by one primary partner or central agent, but I like to have control over who is involved and how they are compensated.

For example, let's look at engineering.

I think you are wise to separate engineering from production partners as you have serious IP to protect. For example, if your sourcing partner is providing engineering support as well as selecting the sub suppliers who will get the order, there may be a conflict of interest if a) you don't know who the sub suppliers are and/or b) there is compensation from the sub suppliers to the engineering partner. Here is why: Non-Disclosure/ Non-Compete agreements are very hard to monitor and enforce with partners who don't disclose the identity of the suppliers, as is usually the case with engineering firms who also conduct trading.

There is also a concern about design/engineering bias. If the engineering firm is being compensated by the seller's side anyway, then there is a risk they will engineer the product as they see fit in a way that benefits them (trader and hidden supplier), rather than you, the most. For example, the engineering may be tailored to the production methods of that particular factory partner of the engineering/trading company, which may or may not be the design, which leverages the best production efficiencies and technologies available in China at a national level.