Analyst: "Margins with private labels are closer to 70 to 75 %"

For many years, and with increasing volume and intensity,  auto manufacturers and large system manufacturers such as Bosch, Teves, ATE, Brembo, and more have been successfully manufacturing in China.  They realized tremendous savings, and received first rate quality. To a large degree, the manufacturers kept the profits to themselves. Now, independent wholesalers can do the same, with the help of Sinamotive.

According to Kyu-min Oh, senior industry analyst for the Automotive & Transportation team with Frost & Sullivan, products manufactured overseas come with a cheaper price tag. Therefore, resellers have been falling back more often on these white-box brands to help boost revenue. "Profit margins when selling name-brand items are typically 30 to 40 percent, while the margins made when selling private labels are closer to 70 to 75 percent," the analyst said.

Successful sourcing of auto parts in China can be complex, requiring your constant on-site presence and attention. With the help of Sinamotive, producing your private label product at high quality and low prices will be easy.  It is a 10-step program that can get addictive.

 Step 1: Register your trademark in China.

Don’t overlook this first step!

Like many manufacturers in the world, you may not even have bothered to register your trademark in your own country.

Rightly so, because most countries follow the “first use” doctrine: If you can prove that you used your trademark longer than the infringer, your trademark is protected.
In most countries, registering your trademark bolsters your case in a dispute, but it isn’t absolutely necessary for trademark protection.

China is different: China is  a “first to file” country. In China, the trademark belongs to whoever files it first with the  China Patent & Trademark Office.  Why would you care if you don’t intend to sell your goods in China?  The holder of  the trademark can block your goods from being exported.
Sounds like extortion?  It can feel like it. Someone who went to the expense to register your trademark probably won’t let you get off cheaply. Protect yourself: Register your trademark in China. Sinamotive works with very competent trademark lawyers in China. The best trademark guns in the Wild East will make registration a painless and low cost affair. 

Step 2: Branding.

If you don’t have your brand or package design, we will do it for you.  We have experts on staff who did branding and packaging design in Europe, the US, and in Japan. We will also optimize the packaging for containerized freight.  

Step 3: Find good and trustworthy suppliers.

This is the easiest step, because you are working with Sinamotive. We know who the best suppliers are, and how to find them. We employ German, KBA accredited testing labs, such as FAKT, for  initial supplier audits, and for an audit of  QA procedures.  We also have a partnership with China’s National Center of Quality Supervision and Inspection of Automobile Parts.

Step 4: Trust, but specify.

Tight and detailed specifications are  essential  to successful manufacture in China.  Don’t leave anything to imagination.  Tight specs are indispensable, from getting the right price, to getting the right product, to receiving justice in the event of a dispute.  Don’t worry about going to court or into arbitration with a Chinese manufacturer:  With Sinamotive, you don’t have to.  You contract is with us, and we’ll deal with the manufacturer, should the need arise. 

Step 5: Get certified.

In many countries,  many if not most automotive parts need an official  certification to make the part legal to be used in a car. To make them legal in Europe and many other countries, brake pads for instance must adhere to ECE Regulation 90, and have an E-Mark.  Brake disks need an “Allgemeine Betriebserlaubnis” (ABE)  to make them legal for use in Germany.  Little known fact: If a Chinese manufacturer has an E-Mark for their product, then your brand name must be registered with the authority that issued the E-Mark.  This is simple, but necessary paperwork.  Sinamotive helps you  navigate the tricky waters of certification, and make sure that the products conform to their respective certifications. You won’t be bothered with testing and the paperwork, it will all be done for you.

Step 6: For your approval.

 You will receive final  samples for you  to approve before production starts. We also often produce small pre-production batches to equip the sales force for sell-in.  “Sealed samples”  are made, inspected, approved, and used as reference for production.

Step 7: Produce,  produce, produce.

During production,  Sinamotive has full-time staff at the factory at all times to oversee production, and to represent your interests.

Step 8: Quality control.

The manufacturer does quality control as agreed and as mandated, for instance by ECE R-90. Our own staff controls the quality control of the manufacturer.  3^rd party  KBA-accredited  labs like FAKT GmbH  perform  audits of quality and COP (conformity of Production.)  They also do Pre Shipment Inspections (PSI.)  Do we sound like control freaks?  Better control now than freaking out later.

Step 9: Ship, ship, hooray!

Your finished product will be shipped directly to you or any destination you specify. Sinamotive takes care of all logistics, documentation, customs clearance, and payment.

Step 10: Make money.

You receive a perfect product with your name on it, delivered to your warehouse, wherever that may be in the world, or it will be directly delivered to your distributors. And you don’t have to lift a finger. All you have to do is sell and make more money than ever.

Remember:

Most likely, the the big name parts you sell are already made in China.  Why leave them the profits?  Contact us for a free consultation.