Starting out
Private label and OEM.
Private label usually means your brand on a formulation or design the factory already makes. Development work means a product created for you. Buyers negotiate the first and assume they are getting the second, and the gap between them is where most disappointment sits.
The two deals.
Label only. The factory has a product, you put your brand on it, and the minimum order is low because nothing changes on the line. What you cannot have is exclusivity, because the same product is on ten other shelves under ten other names.
Developed for you. Formulation, tooling or pattern work happens, you pay for it in money or in volume, and you can reasonably ask for exclusivity. Lead times are longer and the first order is bigger.
Most Indonesian offers are the first presented as if it were the second. Asking directly whether other customers buy this exact specification is a fair question and the answer tells you which deal you are in.
What has to be written down.
Six points. None of them is unusual and leaving any of them out is what turns a good factory relationship into an argument.
- 01
Who owns the formulation or design
If you paid for development, say so in writing before development starts. Afterwards it is a negotiation you will lose.
- 02
Exclusivity, if any
Scope it: which markets, which channels, for how long, and against what minimum volume. Unlimited exclusivity for a small order will not be honoured.
- 03
Artwork and who prints it
Files, colours, print method and who approves the proof. Getting this wrong is the most common reason a good production run cannot be sold.
- 04
Tooling and moulds
Who owns them, where they are stored, and what happens if you move factories. A mould you paid for that stays behind is a common and expensive surprise.
- 05
Minimums and reorder terms
Both the first order and the reorder. Some factories quote an attractive first order and a much larger reorder minimum.
- 06
Your brand on their packaging
Whoever is named on the pack carries the legal responsibility in the destination market. That is usually you.
What buyers get wrong.
Assuming a sample equals the production standard. A development sample is made by the best person in the factory with no time pressure. Agree a signed reference sample from a production run, not from the sample room.
Paying for development without a written owner. Formulations walk in this industry, and the ones that walk are the good ones.
Treating artwork as a late step. Labelling requirements for the destination decide what has to appear on the pack, and finding that out after printing means relabelling or scrapping.
Confusing a trading company's private label offer with a factory's. A trader can put your brand on anything, and the factory you never met is the one who decides quality.
Questions buyers ask.
Will an Indonesian factory give me exclusivity?
For a genuinely developed product with real volume behind it, often yes and scoped to markets. For a catalogue product with your label on it, no, and any promise otherwise is worth very little.
Who is legally responsible for the product I sell?
Whoever places it on the market under their name, which is you. The factory made it and the obligations in your destination market attach to your brand, which is exactly why the documentation has to exist.
Should I develop a product on the first order?
Rarely. Buy the catalogue product first, learn how the factory actually performs, and commit to development once you know whether they can hold a specification.
Read next.
Writing a specification suppliers can price
The document that decides what arrives. What belongs in it, what has to be measurable, and the words that cause disputes.
Protecting a design or brand
An NDA with a workshop is worth less than buyers think. What registration does and does not do.
What sets a minimum order
Setup, material lots, the container and attention. Three of them move and one does not, and knowing which is binding beats any tactic.
Approving the first piece
One unit made to your specification, approved in writing before the run starts. The last cheap moment in the process.
Labelling for your market
Printed in Indonesia and judged in your country. What has to appear, and who carries the obligation.
Managing a supplier over years
Quality drifts slowly and nobody announces it. What to measure and when to add a second source.
What duty is calculated on
Duty is charged on a value that is not always the invoice. What gets added and what does not.
When to change supplier
Switching costs more than buyers expect. Which problems to fix and which to move on from.
Product liability
Importing makes you the producer in most legal systems. What that means for your exposure.
Retail or food service
Two channels with different packaging, margins and demands on your supplier.
Sourcing from Indonesia?
Tell us the product, the quantity and the destination. We come back with what it involves before anyone talks about money.