We often see the following scenario playing out:

• An importer pays a plastic injection supplier to develop a mold and make a batch of products.
• At one point, the importer is fed up with the supplier for reasons related to attitude, quality, delays, and/or price.
• The importer finds and qualifies a second supplier, but does not want to pay for a mold again.

Transferring any tooling from one manufacturer to another can be quite sensitive in China. Yes you may be the owner, but the original supplier’s behavior is a bit unpredictable — they see they are losing your business and there is little incentive for them to be ethical.

The situation is even more unpredictable if the original supplier likes the mold, can use it for other customers, or (as is sometimes the case) is already using it for other customers in your back.

There is no “one right way” that works in all situations, but we laid out 10 tips that should be helpful.

1. Factory direct

This is one situation where trading companies usually cause issues. They seldom have contracts with the manufacturer. So, even if they promise you own the tooling, the manufacturer might believe otherwise.

2. Contract

Set up a contract with your current supplier before they start making the tooling. It should be clear who owns the mold. And the supplier should have an obligation to return it at your request, without extra fees. For more details, read this article on the China Law Blog.

Some non-legal tactics (e.g. having your company name engraved on the mold) are helpful too, but they are not sufficient.

3. Record information about the mold

Make sure you have the mold 3D files, and you know the mold size as well as the injection parameters and the type of plastic used.

4. Build inventory

When the transfer takes place, there might be no production for some time. The transfer itself can take between 1 week and 3 months depending on the situation. Make sure your inventory can cover the worst case scenario.

5. New supplier qualification

Evaluate your new supplier to ensure they can meet your target. It includes factory audit, contract setup, and basic due diligence. Spend the time to do this right. Hopefully you can find a reliable manufacturer that can support your business into the future.

6. Announce the transfer to the current supplier

Justify the reasons for transferring the mold. If they had performance issues, list them out. If you decided to launch production in your home country, explain your plans. Keep the conversation focused — it is usually smart to avoid saying “your prices are too high” even if that’s true.

7. Agree on the last financial exchange

No matter what the contract stipulates, the current supplier with try to benefit from the transfer in any way they can. For example you might hear “the mold cost more than we invoiced”, “you need to pay for storage and maintenance”, or “the transfer will take us time and resources”.

It might be smart to agree on a small payment rather than playing hardball at this point.

8. Mold pickup

We have written an entire procedure for moving tooling/molds. Even if you don’t follow it, there is one thing you need to keep in mind.

If the new supplier arranges the mold pick up, make sure they are doing so anonymously. You don’t want your current supplier to change their mind at the last minute!

9. New supplier’s fees

The new supplier will often claim a trial cost, generally 300-500 USD, for evaluating the mold and, if needed, suggest improvements. This cost is reasonable.

10. Control the first samples

A different supplier often means a different plastic brand and different injection parameters. These might affect the product’s quality and dimensions. At that stage we typically conduct a “first article inspection”. The new factory makes a few samples for confirmation of quality.

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Any other tips?