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If you have wondered exactly how a product travels from a large industrial factory to your kitchen counter, then today’s blog post will help clear that up. Cell phones don’t grow on trees after all. Today we are going to dive into this process with some tangible examples that make it easy to understand. In this article, we will go over the different stops your product makes along the way and the decisions you will need to make on its journey.

First, let’s start with a little roadmap. This is a very common path your product might take after it’s been designed and is ready to make the long trip from a factory overseas to the shelves at a local shop.

Suppliers →  Manufacturer → Distributor → Retailer →  Consumers 

There are a lot of ways the supply chain can look, but today we want to focus on the supply chain in corporate businesses that involve manufacturers. We will look at what happens at each of these stops and the various paths a product takes.

Step 1—Suppliers

Before a product is even put together, you will need supplies. The supplier provides these raw materials which are then assembled and combined in a way to make the product itself. There might also be other suppliers and stages as well, but for now let’s just clump them together as one.

Once you find a factory or manufacturer to work with, you probably won’t be involved in choosing a supplier, but it helps to see the whole picture. For example, if you are selling an umbrella, then it is made up of fabric to keep the rain off and plastic or metal to provide the structure.

Step 2—Manufacturer

After you have made a prototype, you need to look at samples. Factories can send samples much quicker than they can  regular products because a sample isn’t meant to be sold, so there is no need for taxes or tariffs. Import and export laws are designed for large quantities of goods, so that’s why samples can get around this loophole.

You might go through 2 or 3 revisions of the product before you are ready to place your full order. In fact, the samples are likely to be destroyed as they undergo things like testing. These tests might be performed by your own team or a third party to meet certain certification requirements.

If we continue with the example of the umbrella, maybe the fabric wasn’t as waterproof as needed and so in testing it was destroyed as a result. Knowing that flaw, you would make the necessary changes and ask for another sample.

Here is a quick breakdown of how that might look:

Sample→ Tests & Certifications → Revisions→ More Samples → Approval → Place Order

Luckily, because you are only ordering a handful of the product, you can get them quickly to speed up the process. After tweaking it, you’ll eventually get to place your order with the factory, which should take about a month.

Shipping & Logistics

When it comes to logistics, we’ll only be able to scratch the surface. Some people spend years studying this. Once your product is created and packaged, you have to make a decision on how to transport it. Even deciding on the packaging is a complicated process, but we will cover that in another article.

Let’s look at the different ways to ship your product overseas. There are 2 common methods used to transport your goods, by Air Freight or Ocean Freight. Many companies might use both for different products, but what you need to know is each one has its own pros and cons. Both have to follow their own set of rules and regulations that they have to abide by.

Here is a table to compare the two:

VariablesAir FreightOcean Freight
TimeFasterSlower
CostMore ExpensiveLess Expensive
ReliabilityMore unpredictableMore predictable
DestinationsMore Options InlandMust Arrive by Port
How they ChargeBy WeightBy Volume

If you were shipping something small and light, then sending it by air might make sense. By comparison, if you are shipping a larger quantity of something bigger and heavier, then it’s preferable to send it by ocean. Obviously, there are a number of factors that will affect your decision at the end of the day.

As we recently experienced the Suez Canal Crisis, you might end up having to switch methods due to unforeseen circumstances. When shipping things internationally, not everything is in your control, so it is important to ensure you keep this in mind, especially when drafting your budget.

Customs

After it travels by sea or by air, your product will also have to go through customs when it’s crossing international borders. There are 4 basic steps that occur when the products are being imported into a country like Canada:

  1. Entry. The first thing you need to do is determine how your product comes into the country and where.
  2. Examination and valuation. Once it arrives at the border, it’s then looked at to ensure it’s legal and the value is also evaluated so that duties or tariffs can be applied.
  3. Classification. After the cost is calculated, the product is classified and you can then find out the percentage of tax that is going to be charged.
  4. Payment and liquidation. At this stage, you will have to pay any tariffs or duties to bring it into the country.

There are a lot of forms and paperwork at this point, so you can experience delays if things aren’t filled out correctly. As you might expect, there are people who spend years studying this and keeping up with the laws and regulations.

Some companies even find loopholes to avoid paying certain taxes and there are plenty of humorous incidents that have been reported as a result. One Ukrainian importer found it was easier to cut their cars in half and import them as “car parts” instead of cars because the taxes were lower. They then reassembled the cars after they arrived at their destination.

Step 3—Distributors

Now that the product has passed through customers, it will go to a distributor. At this point, it will likely go to a warehouse or a wholesaler. Let’s look at how that looks for both of those scenarios.

After everything arrives at a warehouse, you can start sending the product in 2 different ways. These are both considered examples of the order fulfillment process, which consists of receiving and processing the goods so they can be distributed to customers.

  1. In-House Fulfillment. Fulfilling the orders yourself.
  2. Outsourced Fulfillment. Hiring another company to fulfill orders.

When you ship the products yourself, it’s also referred to as Fulfillment by Merchant (FBM). Conversely, you could work with a large company like Amazon to distribute your products. Fulfillment by Amazon (FBA) is a popular option of outsourced fulfillment by many, but you should know that they will take a percentage of the sales. These types of  fulfillment centres will also charge a storage fee as they have to make space to store your product until it is sold.

Another way to distribute your product is through a wholesaler. People sometimes use the term interchangeably with distributor; however, a wholesaler is a company that acts as an intermediary between the manufacturers and retailers. Wholesalers will buy the products from a manufacturer in bulk, then sell them to the retailers.

There are many different types of distributors and wholesalers out there helping you get your product in the hands of your consumers. Similar to shipping, you need to weigh the costs and choose what is best for you.

Step 4—Retailer & Consumers

Finally, after a few months of sitting in shipping containers traversing the ocean and bumbling around on trucks from warehouses to stores, the product winds up in the hands of your customers. It’s a complicated and convoluted journey, but we hope that we have demystified it for you.

While it might seem daunting, we wanted to show the whole process and the different paths a product can take on its journey after it’s designed and ready to go. You might think you can jump straight from placing the order to marketing, but there are a lot of steps after you’ve ordered your product from the factory.

If you found this article helpful, don’t forget to share it and subscribe to our newsletter for more useful content like this.

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients are proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions or want to discuss going remote, reach out to us through our WebsiteFacebook, or LinkedIn.

Article by Victoria Fraser

So you’ve got an idea for an awesome new product and you’re ready to make it into a reality. You’ve started the product design process and the prototype is looking good. Now you’re ready to start manufacturing it—or so you think. Before you can actually start selling your product, it needs to undergo testing and certification. This process is known as Product Certification and it’s important for a lot of reasons.

First, let’s look at the definition of product certification and why you need it. Then we’ll look at the different markings and how they work. It’s important to certify your products as a sign to people that it is safe, reliable, and of a certain quality.

What is Product Certification?

Product certification is the process by which your product is tested to meet regulatory standards in a specific market or industry. For example, if you were selling a medical device, it would need to meet the minimum standards in the health industry as regulated by governments and businesses.

Beyond that, product certification is often a requirement in particular industries where a failure could have serious consequences. Let’s go back in time to find an example of this.

If you were around in the 1980s, you probably recall that there was a string of murders involving Tylenol. Various packages were tampered with which caused a number of deaths. As a result, packaging requirements changed for over-the-counter pills. The government then passed laws to enforce “Tamper-Resistant Packaging Requirements.” That’s why over-the-counter packaging can seem a bit cumbersome today.

Product Certification exists to prevent events like this from happening again. While that’s a noble cause in itself, there are still other reasons for your products need certification.

Why Does Product Certification Matter?

For one, it helps your product stand out in the eyes of the consumer. Let’s say I’m choosing between two coffee brands at the supermarket. Do I want the ones that have a stamp showing they are ethically sourced and use sustainable business practices? Or do I want the ones without those certifications? There might be a taste difference, sure. However, if my primary concern is safety and sustainability, I could be willing to compromise on the flavour of my morning coffee.

Another important reason for product certification is to indicate safety and reliability. After all, no one wants to buy something of low quality or that is dangerous. Many certifications are used to show that your product passes performance tests as well as quality assurance tests. We’ve actually been doing this for a lot longer than you think.

In ancient Rome, archaeologists discovered ancient loaves of bread with specialized stamps on them. This was because many bakers were cutting costs on flour by adding cheap ingredients like wood shavings. Since it was a common issue, the city started inspecting bakeries. Then they used bread stamps to indicate to customers that particular baker sold bread that wasn’t full of wood shavings. In a way, we could think of those old stamps as an early kind of product certification.

Another reason product certification matters is because governments have purchasing standards that they have to enforce. Businesses and schools will often follow in their steps and recommendations. These days, it’s perhaps easier than it should be to create low-cost products and rush them to market. Because of that, it’s as crucial as ever to ensure your product is certified to outperform your competitors.

Finally, the last reason to have your product certified is to guard against liability. While you aren’t always obligated to have your product be certified, you still should because showing that your product is tested for safety reduces the risk of legal action.

What are the Steps in Product Certification?

Now that you understand the importance of product certifications, here’s a quick overview of how the process generally goes. Don’t feel too overwhelmed, if you’re working with a good product development company they will guide you through this as well.

  1. Application – This involves the testing of the product and sending an application to the agency responsible for provided certification.
  2. Evaluation – At this point, you look at the test data to see if it indicates that the product meets qualification criteria.
  3. Decision – After it’s tested, there is a second review of the product application to ensure the Evaluation is accurate.
  4. Surveillance – Once in the marketplace, it’s important to continue monitoring your product’s performance to ensure it still meets qualification criteria, especially since it’s hard to test out every possible scenario in a lab.

Once you’ve passed these steps, your product will proudly bear the certification mark and your consumers will know it has met those standards. Now, let’s explore some of the different types of product certification out there.

What are UL, CSA, CE, WEEE, RoHS, and FCC?

There are a lot of different markings out there and they all mean different things. Often it’s because different countries have different requirements. That said, it’s also due to other factors like the process surrounding manufacturing as you’ll read later. Let’s look at a few and see where they come from.

UL Certification

Origin: U.S. and Canada

Acronym: Underwriter Laboratories

Explanation: This is a third-party certification company that has been around for over 100 years. Their mark indicates products are safe for workers and customers to use. Think of them as a safety organization that establishes standards for new products across various industries. For example, electronic components are often UL certified to show that they can handle safe levels of electrical current as promised.

There are some differences in requirements in the U.S. and in Canada, sp if there is “c” on the left the product meets Canadian standards, but it might not meet American standards.

CSA Certification

Origin: International Certification

Acronym: Canadian Standards Association

Explanation: The CSA Group is another certification company that was founded 100 years ago in Canada; however, it is now respected internationally to indicate a product’s been dependently tested and certified. It shows consumers your product meets recognized standards for safety or performance in many different countries.

Unlike the UL certification, CSA is widely regarded and respected around the world. This means you could more easily sell your product in new markets.

CE Mark

Origin: European Union

Acronym: Conformitè Europëenne

Explanation: Since 1985, the CE mark has been used on products. It indicates a product conforms with health, safety, and environmental protection standards across different industries. It’s often a requirement for many products sold in the EU. When applying for this marking, you’ll need to be able to provide the paperwork and documents supporting that your product met the standards.

One confusing aspect here is that it’s not an indication of quality, it’s actually just an indication that you have the supporting documents to show you met certain standards. There is no testing done by a third-party that approves the CE marking, and in some cases, you can actually certify a product yourself.

WEEE Compliance

Origin: European Union

Acronym: Waste Electrical & Electronic Equipment

Explanation: This European Community Directive was created in 2002 to combat the excessive amount of dangerous and toxic waste created by electric products in landfills. Electronic waste is extremely hazardous and difficult to dispose of, so this directive places the responsibility of reducing that waste on companies and manufacturers.

It basically indicates your product meets the standards for the separate collection, treatment, recycling, and recovery of electronic waste. This mark safeguards human health in the long term by reducing environmental contaminants.

RoHS Compliance

Origin: European Union

Acronym: Restriction of Hazardous Substances

Explanation: Similar to the WEEE compliance, this mark indicates the compliance with restricted use of specific hazardous materials found in electrical and electronic products. The RoHS Directive imposes a set of restrictions on European manufacturers in regards to the material content of new electronic equipment placed on the market.

Both the WEEE and RoHS compliance relate to electronic waste, but RoHS focuses on the safety of the material components in the product whereas WEEE focuses on recycling and reducing electronic waste processes surrounding a product.

FCC Certification

Origin: US and Canada

Acronym: Federal Communications Commission

Explanation: Finally, there is FCC which is the most common certification as it is mandatory for most electronic components in order to enforce communications laws and regulations. In essence, it makes sure your product doesn’t interfere with existing communication frequencies.

While the FCC regulates certification in the US and Canada, they are referred to EMC/EMI certifications more broadly.


Summary

Product certification can be intimidating, but it’s an important step in the process of product design and development. It can be easy to get bogged down by jargon, but the important thing to note is the common theme of safety. Many of these markings demonstrate your product is safe. For your consumers, it’s important that you meet the ethical requirements created by governments and highly respectable certification companies.

To stand out on the shelves, your product doesn’t just have to be useful and practical, it also has to be reliable. Consumer decisions are guided by that in almost every industry you can think of, which is why this is such a fundamental aspect of product development.

Hopefully, you found this article helped demystify product certification! If you liked this blog post, don’t forget to share it and subscribe to our newsletter for more useful content like this. You can also check out our article on Prototyping in Product Development Today or 5 Common Mistakes in Product Development!

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions or want to discuss going remote, reach out to us through our WebsiteFacebook, or LinkedIn.

Article by Victoria Fraser