by Fredrik Grönkvist
In this guide we explain what you must know about importing watches from China. Keep reading, and learn how your Startup or Small Business can develop custom designed and private label wristwatches. Also learn about customization options, tooling costs, regulations and quality assurance.
The biggest price factor is the watch case material. You have two options: Stainless steel or Zinc alloy. The latter is only used in low quality watches, retailing for less than $50. Watches sold for above that price are almost always made of Stainless Steel, if exclude other less common watch case materials, such as plastic and silicon.
As for the case design, you also have two options, as explained below:
Most Watch manufacturers can provide an extensive list of existing ODM products, which can also be modified (i.e., custom logo, back case engraving, custom designed hands and crown). However, if you intend to have an entirely new case design made, you need to provide one, or more, of the following:
The movement is the essential component in a watch. Most Chinese manufacturers offer both low cost Chinese made movements, and the more common, Citizen Miyota movements. Some Watch brands prefer other movements, for example Ronda movements. However, it tends to be quite hard to find suppliers that can provide such high end movements, thereby forcing the buyer to arranging the movement purchase from the maker itself. That being said, most movement makers have representative offices in Hong Kong or in Mainland China.
Buyers based in the European Union must also ensure compliance with RoHS (Restriction of Hazardous Substances Directive), which restricts heavy metals in electrical components. Quartz movements are electrical components, hence covered by the RoHS scope. Most brand name movements, including Citizen Miyota movements, which are RoHS compliant, thereby making it easier to ensure compliance. I am, however, not aware of the same applies to low cost movements, from smaller manufacturers.
When importing watches from China, OEM refers to custom designed watch cases. ODM, on the other hand, refers to factory standard watch cases (i.e., cases for which a mold is already made). In addition the watch case, there are various design elements and components, that can be customized:
However, customized components require additional tooling (i.e., injection molds), which are without exception paid for by the buyer.
Most watch suppliers don’t manufacture straps ‘in house’, but purchase wristbands from specialized subcontractors. The Minimum Order Quantity (MOQ) requirement (50 to 200 pcs) for straps tend to be lower than the Watch MOQ, when buying factory standard straps. However, custom designed (OEM) straps results in a higher MOQ, often set at 500 to 1000 pcs. If you intend to purchase OEM wristbands, you need to prepare the following to the supplier:
Product packaging is also subcontracted to specialized packaging suppliers. Not manufactured by the Watch supplier. ODM packaging, i.e., a standard gift box with the buyer logo, tends to be offered with a lower MOQ (500 – 1000 pcs per design) while OEM packaging requires the buyer to purchase 2000 to 3000 pcs per design. The Watch manufacturer can mostly offer a number of standard ODM designs for the buyer to select, thereby reducing the need for OEM packaging.
The tooling cost is based on the number of custom designed components. Every custom designed component, be it the watch case or the hands, require new tooling, which is, with very few exceptions, paid for by the importer. Below follows a few reference prices:
The tooling cost for OEM watches is, in relative terms, very low. However, the tooling production time must also be factored into the cost calculation. The waiting time for new tooling can be up to 45 days, and that’s only for the first batch. When considering the, very likely, revisions, the total prototype development time can easily run up to 2 to 3 months.
However, customization has a small impact on the unit cost, which largely depend on the materials and components, rather than specific design elements:
There’s no right or wrong when selecting materials and components. However, most Watch manufacturers consider it unwise, and rightly so, to combine a Stainless steel case with a low cost movement – or even vice versa. Zinc alloy watches rarely retail for more than $50, while a Stainless Steel watch, costing just a few dollars more, can retail for $200 to $300. Hence, a small investment in quality can vastly improve your profit margins. That being said, in the end, it’s all about the price segment your company wants to target.
The role of the watch supplier is to purchase and assemble components, not to assist with design. It’s your job to ask ‘the right questions’, concerning the suppliers’ production capabilities and customization options, and to provide the information required by the supplier to produce an OEM or ODM sample:
1. ODM SKU
|One (or more) of the following:|
1. CAD file
3. Logo file (.ai)
3. Logo file (.ai)
|Back Plate||Engraving Logo File (.ai)||Engraving Logo File (.ai)|
|Strap||1. ODM SKU|
1. Bill of Materials
2. Design Draft (ANSI or ISO)
(standard crown on selected SKU)
|Hands||Select from cataloge||Design file (.ai)|
As in every industry, it’s critical that you provide the supplier with clear, and consistent, product specifications and files. Don’t assume that the supplier will spot errors, fill unspecified gaps or report conflicting information. Vague information on the product specification can result in misunderstandings, and thereby cause severe quality issues later in the process.
Lead times are, as mentioned, another critical factor to consider whether to custom design the watch case and other components. Below follows a basic lead time comparison:
|Tooling||0||30 – 45*|
|Sample||10 – 15||10 – 15|
|Production||25 – 45||25 – 45|
|Total||35 – 60||65 – 105*|
*Excluding additional mold revisions.
Buyers based in the United States and the European Union must ensure compliance with various product safety standards and directives. Below follows an overview:
|US||CA Prop 65||Regulates more than 800 substances in consumer goods. Compliance is when selling in, or to consumers in, California.|
|US||CPSIA||CPSIA compliance is mandatory for Children’s products sold in the United States. Hence, CPSIA applies to children’s watches.|
|EU||RoHS||RoHS restricts heavy metals in electronic components, and metallic parts in contact with said components. Hence, RoHS compliance is mandatory for both the watch case and the movement.|
|EU||REACH||REACH regulates substances in consumer goods. Compliance is mandatory in all EU states.|
|EU||EMC Directive||The EMC (Electromagnetic Compatibility) Directive is applicable to all electronics products.|
|EU||EN 71||EN 71 is mandatory for toys and certain children’s products sold in the EU.|
Compliance testing can be carried out in China, by a third party company, such as SGS, Asiainspection or Bureau Veritas. However, I advise you to hire a quality inspector to collect batch samples, rather than letting the supplier do it for you. There’s always a risk that they send a ‘compliant sample’, in order to pass the test.
A Quality Inspector can offer much more than just batch sample collection. The only way to avoid high defect rates is by inspecting the cargo on site, prior to balance payment and shipment. Below follows a standard Quality Inspection Protocol, for watches:
|I. Visual inspection|
|II. Dimensions||1. Case Diameter|
2. Case Thickness
3. Strap Width
4. Strap Leangth
|III. Functional||1. Movement|
|IV. Packaging||1. Logo print|
3. Material Weight
4. Damages / Dirt
5. Export Packing
|V. Physical Properties|
1. Water Resistance
Fredrik Grönkvist is the co-founder of ScandinAsian Enterprise in Shanghai. Since 2010, he and his team have helped hundreds of companies worldwide, primarily in the EU and US, to develop and manufacture products in China. He is also the main contributor on www.chinaimportal.com, a leading knowledge base for small- to medium-sized enterprises importing from Asia. For further questions, you can contact him on www.chinaimportal.com/contact-us/.