Low Priced Corporate Videos, High Priced Look

One of the best ways to generate free marketing potential for your business is to take advantage of video on the internet.

Previous blogs discussed the necessity of high-end photography to use as a means to display your product on your website and others as well as print advertising, tradeshow displays, and for press kits, video is an ever-expanding medium that shouldn't be overlooked.

We have found it useful to have a nice 30 second, 1 minute, and 5 minute piece on each product as well as our company for different purposes from time to time, and include these on our marketing kits that are available for download on our site for press, bloggers, and retail partners who have websites of their own (or may look to do local traditional advertising). An example of what we do, can be found on our site by clicking here.

Creating a video can be daunting if you haven't done this before, and budgets aside, there are plenty of expenses you can rack up if you aren't a do-it-yourself kind of person. Presuming you are like me and want things to look high-end, but don't want to budget the multi-thousand dollars to do a custom video, a lot can be done in the form of a photo montage with a trailer clip that you shoot from a standard video camera.

We already discussed the importance of photography, so this article presumes you have that in place already sitting on one of your computer drives. I use a really great service called Animoto that is basically a Hollywood video editor in a box for dummies. With a simple interface, you upload your videos in the order you want them, and add a music file that they have pre-cleared songs on their site available (or you can upload your own - there are no copyright restrictions limiting your use on the site, but you can still get yourself in trouble if you don't have rights to use a song you upload). When you click the process button it automatically does all of this fantastic yet high-end jazz to your photo montage to perfectly meet the beat of the song and end it at the right place. They also have video options to add up to 10 seconds of video to your montage.

Although regular accounts are free, they are very limiting and for a corporate video you will want to upgrade to the professional option at $40 / month. I basically get all of my video needs together at once along with the song I want to use and then sign up for 1 month and burn them all out at once. This gives you high def downloads, no Animoto watermarks, and a link to your site at the end that will still work in youtube.

As a bonus, the month is unlimited videos so I do a few videos of each of my girls with their best friends as xmas gifts for them and a separate one to the grandparents and close friends as an e-holiday card on steroids.

The formula I like to use is text cards to intro each relevant photo, a promotional video of the product somewhere in the middle (I used our NBC Today Show clip), followed by some more photos telling the rest of the story. Here is an example of one.

I also use this for corporate training videos at bigger box retailers like Babies R Us when helping introduce our product to each of their stores. It's nice to personalize a few slides specific to them (like showing it properly displayed at one of their stores) and a personalized thank you slide. We also add a separate full size video clip from our President and Founder as a personalized touch thanking everyone in the end. You get my point though as to the possibilities for you.

If you are filming video yourself, any video camera will work, but I recommend one that shoots in high definition. The most important thing is a tripod so that you can get the right angle and that there is no shaking on the camera. Test out your shots in different rooms at different times of the day to get the best lighting.

Good luck!

I like the formula

Manufacturing in China

Manufacturing in China is always a unique undertaking. For textile products, the quality can be very high, and costs of about 1/4 of that in the US (including shipping and duty). The biggest obstacles are a) language/communication, b) sourcing quality vs. cost to the right factory, c) financial trust, d) logistics. I will talk about each below.

• Language / Communication: Everyone speaks Chinese, and the time difference is significant, so generally the best way of communicating is through e-mail. Generally, due to this, it is easiest to fully prototype EXACTLY what you are looking to be made so that it can be sent for replication. The less communication needed to allow your Chinese counterpart to understand what you want the less delay and cost for you to have a product ready for production. Time is money.
• Sourcing quality vs. cost to find the right factory: There are thousands of factories all of different qualities and costs. Finding the right one can literally be an impossible task without the help of an agent. Finding an agent is equally as difficult since there are thousands of them vying for your business. Generally working with 3rd party sources such as www.madeinchina.com or www.alibaba.com are good ways of finding agents. Usually they will be the ones that are representing the factory with certain specific types of materials (like foam or cotton or elastic). Simply contact them through these sources and ask if they are an agent or the factory as you have other materials you need to source as well. If they are willing to help you source other materials, they will be an agent, as the factories are very specific and usually only product one type of product. You will get a good idea of the quality of the agent based on the promptness of their e-mail replies, comparative quotes to what other agents you have found are giving you, and the quality of their ability to write in english. I recommend asking them for any US references that he/she has worked with in the past and contacting them. It is a great way of getting a bit more comfort in trusting this person with your mone (which I will get to shortly). Your sourcing agents will be vital in your success manufacturing in China.
  
• Which Factory to select: Once you have an agent you think you can trust, you need to get the names of the factories from him that he is sourcing for you. A good resource to vet these factories is www.panjiva.com which is a free way to see what the volume of product they have been shipping to the US and on behalf of what companies. A factory with small volume could be a major danger flag, as they too will need to be trusted with your money.
  
• How to start with any factory: Most Chinese factories will require payment in RMB, which means you will need to either set up a bank account in China (more on this later), or use your agent to wire funds in USD for him to then convert to RMB and pay the factory on your behalf. Time and costs of setting up a China bank account is large, so most will need to start by paying through your sourcing agent. This will take a leap of faith, as it will be nearly impossible for you to reclaim your money if they simply receive your wire and never contact you back again. A legitimate agent that you have researched and vetted will recognize the future business and referral potential and ultimately will result in an acceptable mid-term solution. That said, it is always advisable to start small. Have your agent negotiate the minimum down, the price down, and provide payment terms (at a minimum, 30% advance upon PO and 70% prior to ship after inspection. You should never have to pay your agent, as they get their commission from the factory, but recognize that this could be a conflict of interest, so always have multiple agents aware that they are competing for the business. Prior to production, get a countersample and have it shipped to you and the agent to compare against the product when it is ready to ship, when you should get a second countersample to check for mistakes. Sometimes you will have mistakes, and these will be material evidence in negotiating a solution. Ease into larger orders once you have confidence that your product is quality, that costs are consistent and reliable, and that your agent can be trusted as a way of reducing your risk.
• Logistics: you will need a freight forwarder that is large enough to receive goods in the nearest port to your factory and take them in the nearest port to where your company warehouses the goods. You can either pick the goods up once they clear US customs or have your freight forwarder arrange for a courier service to delivery them locally to your warehouse. Generally, when starting from scratch (i.e. you need to find an agent), and presuming you do not have a difficult product to source (i.e. it is of a standard material like cotton, and does not require special talents to cut and sew) budget a year - yes you heard me - to get to the point where you have your first test shipment of product. 3 month to find an agent, 3 months to vet the factory and receive countersamples, 1 month to negotiate, 1 month in wire delays to go from you to the agent to the factory, 2 months to manufacture, 2 months to receive goods. From there budget 6 months from one order to the next, as you will have each factory you work with re-negotiating rates, and at some point you will need to plan on having an option to leave one factory for another to keep your existing factory honest. There are a lot of holidays, and production delays are frequent (especially toward Jan/Feb during the Chinese New Year when everything stops), so 6 months is a very realistic and wise presumption to prevent having inventory problems. I generally recommend keeping 3 months of raw materials inventory stocked in China (you can usually negotiate this with the factory where you do the cutting and sewing/assembly), 3 months of finished salable inventory warehoused in China (also usually you can negotiate this with your cutting/sewing factory), and 3 months of inventory in the US. Presuming you do international distribution via distributors, you can also negotiate with your cut/sew factory to fulfill large distributor carton shipments drop shipped directly to your distributor through your finished product inventory. This way you have enough inventory available to take into account what will inevitably be the 6 months of re-negotiation haggling with your raw materials factories (which your agent will do on your behalf). Their knowing you have the time to negotiate is the best leverage you have and don't be afraid to pull your business and give it to another factory, as logistics for continued supply for your customers is an ongoing concern.

When you grow to the size where it starts becoming uncomfortable transferring large amounts to your agent, you need to think about setting up a China bank account. This is unfortunately not an easy task or an inexpensive one. Plan on it costing approximately $10,000 to set up a company, file paperwork and establish an account. From there you will also need to enlist someone to file annual returns (although there will not be a tax event in China if all you are doing is transferring money from a US account to your China account for the SOLE purpose of paying China-based vendors. All income should be posted to your US account if you want to steer aware from greater complexities and costs of that China entity. More specific information about this is as follows:

1) In order for you to open an bank account in China, you are required to establish a legal presence. This can be accomplished through the creation of (i) a representative office, (ii) a joint venture or (iii) a wholly foreign owned entity (i.e. a subsidiary). Of these options, the least expensive and least burdensome is the establishment of a representative office.

2) In order to establish a representative office, you will first need to have a lease for office space (which you could arrange through your local manufacturer if it owns the facility) and to appoint a legal representative (no employees required and the legal rep. need not be a Chinese national) before filing for clearance on your business name and registration. The approximate cost to register a representative office (including government filing fees, filing agent fees, attorney fees and preparing corporate consents and resolutions, is approximately $6,000 to $8,500, and takes approximately one month to complete from the date of the filing of your application for registration. There are some post-registration requirements which you can accomplish on your own, or through local counsel or a filing agent at an additional cost of approximately $500. You will then be able to open a bank account. In this regard banks generally require that you produce your business license, a certification from your legal representative and certain seals from the local business). The banks generally charge a fee to open the account and an annual maintenance fee.

3) A representative office will be required to file annual returns. However, you are not taxed for simply wiring money into the country.

Generally, I like HSBC Bank as they have a low cost wiring account in the US for receiving and sending wires, have a very good presence in China, as well as throughout the world, so it is a great bank for your business to grow globally with. US support is limited, but once set up everything can easily be done online, so for me it isn't an issue at all.

You will probably need an attorney to get your corporate structure in place in China and to help you set everything up. Although I haven't used them and cannot specifically recommend them, the firm, Graham Curtin in Morristown, NJ did come to me through my HSBC banker and have been very prompt and helpful in my initial efforts of setting up my China bank account. Simply do a Google search for them to contact them.

Hoping this helps everyone better understand their options in manufacturing in China.