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Yucky update: on Costs and China

2010-10-14 22:34:16 (4462 views)

Our main contact, the only serious Chinese vendor we've found so far, man of infinite patience who really enabled us to get to this point, is now comprehensively reevaluating our project and giving us a new (of course higher) price.

He's spent hundreds of hours over a year's period trying motor overmolding, creating sample parts, refining molds, ordering custom screws, brass inserts and more. We still have an agreement that we'll pay him when money starts coming in. But he's just figured out that we're having 7 custom plastic parts, 8 custom rubber parts, rubber and plastic overmolding, custom brass inserts (2 rounds), custom screws (2 rounds), a diamond polished mold, plus there are a bunch of molds for the rubber which were tried and discarded when we were fine tuning waterproofing and the motor - not to talk about favors from other vendors who are his friends, such as testing out the glow in the dark pigments. So he's basically taking a loss with the project ... and he'll need to review his quote...

The most important thing for us is to keep his friendship because he really helped us a lot and followed through until we were satisfied... and it's hard to find someone like him in China where all the vendors screw up all the time and drop our business very quickly when we complain. He deserves not to take a loss with our business, we don't think he's going to go for the jugular but we're looking at a painful price increase since he's the one making most of the parts... we're keeping our fingers crossed.

This is the last mile of this marathon. The PCBs are being produced in panelized version ready for automated assembly. Components are being ordered. Batteries are getting created to go through LVD testing, and within a week of testing we can get a report, slap a CE mark on the product and sell the DL2000 in the EU as well (maybe, there are still a few minor legal loopholes but we'll work them out by that time).

We'll send a final CAD drawing for the foam cutting next week, and after 7 days they'll have foam samples and then we'll go for the box.

As far as living in China is concerned, YUCK! This simply cannot continue. Yucky details follow. Keep reading at your own risk...

We're extremely sleep deprived from constant and ubiquitous construction noise. We sleep and walk outside with earplugs in our ears. Foul odors and trash are everywhere, many times you've got to run to get past certain critical points on the street where trash is dumped and allowed to rot for days and the stench is just beyond anything you've experienced in the so called first world. We're right in the center of a major city, mind you, not some outer suburb or the countryside.

This is specific to our area: people spit on the street all the time, making really loud throat noises. They even spit inside the subway station, on escalators inside the supermarket, and other places you mistakenly think they won't dare do it.

Consequently most pedestrian streets are covered with saliva. Infants are allowed and aided in urinating just about anywhere including clean bus terminals right by people who are waiting in line. This doesn't even scratch the surface of the gap in culture and living conditions.

So as you can guess we are 100% focused on getting the product completed and... leaving! With fingers crossed, hoping the whole system won't break down as soon as we get on the plane.

They say a picture is worth a thousand words, so let us show you the cleanest "Luxury Bus" 1st class seats we were able to find on our latest trip to the EMC lab! (It's not a joke, they are actual 1st class seats as stated on the ticket)





Also note, this was the cleanest seat on that bus (the bus itself being a bit below average as a whole).

This is what we're going through to bring you this product! Can you believe we've been here a whole year? And can you believe the immaculate mirror finish diamond polished parts in the previous post were created here?

By the way, is it interesting for people to see this sort of stuff or is it just yucky? We have a lot more shots we dare not post, after all we don't want it to look like we're bashing China in particular - the third world is the third world, huge clean shopping centers on one side of the street and abject poverty and people living amidst trash on the other... but China packs an extra punch because of the culture and industrial cities have the pollution...

As for the future... we either make enough money to move manufacturing to Korea, or find someone reliable to take care of things here (unlikely), or die trying.

We're ready to pay 10 times the money (if we had it), and we probably will need to and should, in order to get things done right the first time, and worry about the technology, new products and marketing, instead of being in emergency mode every few days and all hands on deck trying to patch things up.

But still coming to China was the only way we could have gotten through a year of manufacturing trials, and so we can't really complain. It was an adventure! Really awesome adventure. Coming home to ever more complete and good looking versions of our product is what keeps us here. Concept to CAD model to parts in our hands... the only difference with magic is in the ejection pin marks :)

Comments

By zapster at 2010-10-15 15:14:20 Reply
hearing about the conditions in China is certainly interesting. It's not useful information in any real sense, but it's very interesting to hear about the differences. There is a certain image of China and the chinese that is portrayed (marketed?) here in the states in which the chinese are just like us except they're better at making stuff. I think most, or at least many Americans inherently distrust this image, but have no real information from which to draw any sort of empiracal conclusion. From the worst ghettos to the deepest darkest reaches of the appalachians, I don't think you would find anyone who thinks it is actually acceptable to hack lung butter up on the floor of the grocery store.

Your accounts also solidify what many people I know in my hobby already understand. While there are lots of good products coming from China, not evey factory is creating products of a desirable quality. Some of the work is high quality if you look long and hard, but a lot of it is total crap.

just to be clear, i'm not trying to paint with too broad a brush here and make sweeping generalizations. I think your experiences that you have shared have done a great job of fairly illustrating both the good and the bad that China has to offer.
By dreamloverlabs at 2010-10-15 23:39:11 Reply
Well we portrayed the good and the bad so it was time for some ugly as well!

More where that came from... lots more ;)
By sbalani at 2010-10-16 04:46:37 Reply
Having lived in asia, dealt with asians my whole life, and being back here, let me say that 80% of what comes out of asia is absolute crap. China is famous for cheap knock-off's and imitations. Yes a lot of high quality things get produced there. By the 20 percent of companies that function well. The rest is all bollocks and sold to the rest of asia, because no one can afford better.

However having said that, I'm assuming you're living in an industrial district. I've only visited factories in Shen-zen, which is one of the more expensive places to have a factory and its quite nice. Cant say much about anything outside of that, although from looking at your images, you might think its quite bad, and from any westerers point of view it certainly is. HOWEVER considering standards in asia its not THAT bad. Try riding public transport in the philippines (Sheesh! my family doesnt even allow me to do that >.<). However Each place has its ups and downs, and I do hope you'll take a chance to make a pit stop in Hong Kong for a few days, or pass by the Philippines (Cebu & Boracay have some of the best beaches in South East Asia, and its hot all year round :D), and its on the way to the US. You guys deserve it! :D. Having said that, I would just like to inquire, that since the items are being produced in china, any chance one could get sent over to the philippines (fully paid of course :D) before you ship the whole stock back to the US (assuming that's the plan). Its considerably cheaper to buy it and have it sent from next door (china) than having it sent back this side from the US xD (unless you're planning to have localised stocks then no prob! :D)
By akw123 at 2010-10-16 10:43:45 Reply
This post will undoubtedly get lost as you add new items to the blog, but I will post none-the-less. It seems that you don't have clear title to what you are producing. What I mean by this is; It would appear especially from this post that you have made arrangements to get things done by promising to pay for them at a latter date. So now the roster has come home to rest.

Any one of your suppliers can either demand more money or hold your parts hostage until you pay. This must be the primary reason for not knowing what you have invested in R&D. Just a bunch of promissory notes with no real value and with no set cost. I would be surprised if this product actually makes it ti market and predict future posts of cost over-runs to the point that the product can't be sold, due to the cost is too high.
By dreamloverlabs at 2010-10-16 11:03:54 Reply
That is a pessimistic prediction. Not everyone has offered to accept delayed payment, only this particular vendor. And he won't hold any parts hostage, he says he will take payment after sales begin.

Manufacturing costs affect us a lot right now because we're bootstrapping. If the business is viable they will become unimportant at some point, hopefully sooner rather than later.
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