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HELP! Competitor is trying to source my product from my manufacturer

by lisah4788
4 replies
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Hi Warrior Nation,
I could really use some guidance from people who have more experience (I'm still green), so I thought I'd post my situation to this forum.

I sell my own branded items online (ebay) and source them from a manufacturer in China. The item that is sell is growing in popularity and there is one other person who sells the exact same product.


I’ve worked with my particular manufacturer for a few years and I (or so I thought) introduced this item to them when we first started working together. This was the first item they manufactured for me.



They reached out to me this morning with an urgent message because there is an American ecommerce retailer who is trying to source my product from them. My manufacturer reached out to me to ask if this person was a distributor of mine (and he isn’t) and if so, they wouldn’t sell to him.

I guess I have a few questions…

  • I don’t want to lie to my manufacturer, but I also don’t want them to sell to this person. I asked in the past that my manufacturer not sell this item to other people and they responded at that time that it was a common item throughout Europe (this was when I was working with a different person than the person I’m working with now…. I really like and trust my new contact (as much as one can)). That didn’t seem quite right because I was the person who introduced the item to them. However, I let it go. What should I say to my manufacturer to dissuade them from making this sale? I think it’s really impressive, overall, that they’ve even made me aware that this is going on.


  • How did this person (the potential competitor) figure out that this was my manufacturer? He contacted them through globalsource.com. In his message to them (which my manufacturer shared with me), he said that he was in the process of sourcing the item from several other factories and he wanted to confirm that they were my supplier. If they can give him a competitive price, he’ll go with them. Since I have that email, I actually have his name, email address, and website address. I've gone through my records and now see that he bought one of these items from me and that he's using his images of it to source a supplier in China.


  • Over the past several months, I’ve been working with them to manufacturer a number of other new products. What sort of agreement can I put in place that would prevent them from selling these items to other people, down the road? None of these items can be patented, so that isn’t an option.


I greatly appreciate everyone's input! Thanks for taking the time...
#competitor #manufacturer #product #source
  • Profile picture of the author Trinipirate
    Originally Posted by lisah4788 View Post

    Hi Warrior Nation,
    I could really use some guidance from people who have more experience (I'm still green), so I thought I'd post my situation to this forum.

    I sell my own branded items online (ebay) and source them from a manufacturer in China. The item that is sell is growing in popularity and there is one other person who sells the exact same product.


    I've worked with my particular manufacturer for a few years and I (or so I thought) introduced this item to them when we first started working together. This was the first item they manufactured for me.



    They reached out to me this morning with an urgent message because there is an American ecommerce retailer who is trying to source my product from them. My manufacturer reached out to me to ask if this person was a distributor of mine (and he isn't) and if so, they wouldn't sell to him.

    I guess I have a few questions...

    • I don't want to lie to my manufacturer, but I also don't want them to sell to this person. I asked in the past that my manufacturer not sell this item to other people and they responded at that time that it was a common item throughout Europe (this was when I was working with a different person than the person I'm working with now.... I really like and trust my new contact (as much as one can)). That didn't seem quite right because I was the person who introduced the item to them. However, I let it go. What should I say to my manufacturer to dissuade them from making this sale? I think it's really impressive, overall, that they've even made me aware that this is going on.

    • How did this person (the potential competitor) figure out that this was my manufacturer? He contacted them through globalsource.com. In his message to them (which my manufacturer shared with me), he said that he was in the process of sourcing the item from several other factories and he wanted to confirm that they were my supplier. If they can give him a competitive price, he'll go with them. Since I have that email, I actually have his name, email address, and website address. I've gone through my records and now see that he bought one of these items from me and that he's using his images of it to source a supplier in China.

    • Over the past several months, I've been working with them to manufacturer a number of other new products. What sort of agreement can I put in place that would prevent them from selling these items to other people, down the road? None of these items can be patented, so that isn't an option.

    I greatly appreciate everyone's input! Thanks for taking the time...
    If you don't hold a patent there's nothing you can do. I assume the competitor will have the manufacturer brand it differently. Even if you don't have a trademark they can print and sell the exact same product to them. In fact, I don't see anything stopping them from doing that whether you have a trademark or not. Manufacturers will do anything to make money especially. Either way, no patent= no protection. The only other thing you can consider doing is paying for an exclusivity deal w/ the manufacturer but that may not work either. Sorry to sound negative but the competitor would probably stop at nothing to source start selling it if you have no IP rights.
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  • Profile picture of the author ZanyZebra
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    • Profile picture of the author Importexport
      ZanyZebra is quite right when s/he says that agreements with Chinese manufacturers are almost worthless.

      Your only protection is a good relationship, but money talks and it is rare for a Chinese manufacturer to maintain exclusivity with or without an exclusive agreement.

      My first response would be to thank them for their high ethical standards in letting you know what is happening. The fact that they have said that if this person is not your distributor they won't supply is a good start, but you must build on that.

      I suggest that in your email, after reference to their high ethical standards, you add that such an approach to business will benefit them in the long run because: The total market is limited. You are successful in that market. If a competitor was to buy from them, they would have to deal with smaller orders from 2 buyers instead of gradually larger orders from you.

      It is worth also mentioning the new products you are wanting them to make for you.

      Regarding relationships, make all your emails friendly, including non-business matters. When special days in China come around, send them greetings or just say you hope they have a happy holiday.

      A calendar of Chinese holidays could be helpful to you. Here is one of the best: Public Holidays in China in 2015 | Office Holidays Note that the Dragon Boat Festival is coming soon.
      Signature
      Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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      • Profile picture of the author lisah4788
        Thank you, Importexport! I wanted to give you an update on how the conversation went.

        I literally said everything you recommended that I say. I thanked him for bringing this to my attention. I complimented him for his high ethical standards. I explained that I do very well in this market and explained how it's in both of our best interests that I submit larger and larger orders and that by selling to this other person, it would cause both of us to submit smaller orders (instead of receiving gradually larger orders from me).

        And he responded and said that they've agreed not to sell to this other potential buyer. I'd say that's a big win... THANK YOU so much for your amazing advice!! It was spot on.

        I see that you have a book on exporting. I'll be purchasing a copy for sure

        Thanks again for your advice!
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        • Profile picture of the author Importexport
          Originally Posted by lisah4788 View Post

          Thank you, Importexport! I wanted to give you an update on how the conversation went.

          I literally said everything you recommended that I say. I thanked him for bringing this to my attention. I complimented him for his high ethical standards. I explained that I do very well in this market and explained how it's in both of our best interests that I submit larger and larger orders and that by selling to this other person, it would cause both of us to submit smaller orders (instead of receiving gradually larger orders from me).

          And he responded and said that they've agreed not to sell to this other potential buyer. I'd say that's a big win... THANK YOU so much for your amazing advice!! It was spot on.

          I see that you have a book on exporting. I'll be purchasing a copy for sure

          Thanks again for your advice!
          @lisah4788 I am delighted that it worked out for you. It might even be worth starting to look now for a back up supplier.

          One item of advice in my book suggests that you should not keep all your eggs in one basket, and even if you have never bought from them it is a good idea to have other suppliers that you know you could turn to.
          Signature
          Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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