It’s more difficult to answer this question because you’re outsourcing. Were you domestic, I’d advise you to select the contractor based on the standards I described in my book, assuming the service provided the transparency that permitted you to do so. However, since your contractor is in China, you’ll have to rely more heavily on the facilitator and probably gauge the value based on the services-value he/she is providing to you. It is difficult to say what an “all in one” house charges. Most certainly it’ll be governed by the level of complexity of your product. Have you thought of asking the facilitator what they’re charging you? Then Rocio says:

Transparency is a big issue in this business, and it affects all of us….The other side of the coin is that when we have a company referred to us by a colleague, many times they will offer to work with us directly (trying to save themselves the referral fee rightly due to the facilitator after the introduction)

Valerie and I talked about this, you have two things going on here. One, the client is looking for referrals. They way we each do that is that we charge a consulting fee which covers the sourcing of the product or in this case, sourcing of the service, so we’re paid. Perhaps it’s a problem for the service making the introduction in that they should charge in a similar fashion as they should assume the client will go or *should* go around them -eventually. Neither Valerie or me want to be in a situation where there is long term dependency. Valerie avails herself for some hand holding at the outset, to get a line launched and set the DE on firm footing but she’s not encouraging the client to depend on her indefinitely. That service is best provided by a production manager. As Valerie explains it, once she’s established the client with a good pattern maker and production house, those two service providers will work together and as a matter of course, manage the production of the line. Of course, this means the DE is picking up the other duties such as sales and fulfillment.

[amended]
Based on a recent report, I do not recommend S.J. Manufacturing in SF aka S J Private Label for what I’d consider to be exorbitant pricing (he charged one of our members $750) for a two hour consult. The normal price for that is $200-$350. Any contractor I’ve heard of gives you a tour and talk for free, altho not for two hours. To make matters worse, Seymour did not disclose the cost of his time up front but sprung it on her at the close of the meeting. If someone won’t disclose their prices up front, walk away. More on this incident is here. Still worse, he didn’t have any sources she didn’t already know. You can buy three directories for the price of this consult.

I think it’s important to point out (as a service provider myself) that a lot of misunderstandings and problems could be avoided by getting having access to a list of itemised prices with standard rates or requesting a written estimate for any specific projects.

In our case, I started out as a CAD Service provider (patterns, grading, marker, product development) and have sinced embarqued on a joint venture with my mentor (who is like my surrogate dad) and has been a sewing contractor for 30 years.

We always have meetings at the factory together with clients so that he can meet them personally and give them the factory tour, while I explain the pre-production process and answer all questions relevant to it (since that is my area of involvement).

Invoices are always itemised by style number and service, and if the invoice is under $100.00, he prefers that I bill for sample sewing or cutting (so that his accountant doesn’t keep telling him that he shouldn’t bother with small de’s) but is shows up as a purchase to his company…. It never occurred to me that it could leave room for problems.

Transparency is a big issue in this business, and it affects all of us….We deal with so many de’s every week who come to see us with some sort of horror story, so we have to work very hard to deal with the trust issues after a bad expericence with a crook.

The other side of the coin is that when we have a company referred to us by a colleague, many times they will offer to work with us directly (trying to save themselves the referral fee rightly due to the facilitator after the introduction)

The saddest part of the story is, someone else in the neighborhood was using the same contractor. They had purchased the home they grew up in and were in the middle of a huge remodel. Because the contractor screwed them out of so much of their money and it was such a horrible experience, they got a divorce and lost their home!

Though I am talking about homebuilding, it translates to manufacturing and I think helps support K’s argument: pay all subcontractors yourself, and keep an open line of communication with the contractor. Also, NEVER pay the last payment until you have the goods and you have inspected them yourself. Even if that means you are in your office counting every single unit and making sure they sent what you ordered.