Manufacturing Contracts

As industry professionals, we’ve been around the bicycle manufacturing world for a while. One thing that tends to be continually overlooked and perhaps purposefully ignored by both brands and suppliers are manufacturing contracts. People from outside the industry might be surprised, but yes - manufacturing contracts are seldomly utilized. In fact, from our years of experience working with different manufacturers in Taiwan and China, we’ve only seen one contract that was drawn and enforced, precisely because the brand was part of a publicly listed company based in Europe.

Why we encourage manufacturing contracts? Simply because it protects the interests of brands and suppliers. Contracts are designed to keep each party to meet its obligations and commitments. Another valuable aspect if included in manufacturing contracts for bicycle production is schedules. The bike manufacturing industry is infamous for lead time disruptions and production delays. A constructive manufacturing contract with target time schedules and appropriate penalties can have positive effects.

Manufacturing contracts can also protect suppliers from customers. Sometimes, certain customers are able to take advantage of the lack in contracts to haggle prices, push deadlines, and withhold payment. Contracts have the power to ensure that all parties have their best interests protected.

As mentioned, manufacturing contracts are not common in the bike industry. Most suppliers probably would rather not accept the order than to enter into a manufacturing agreement. This is why Oerus has been working with both suppliers and their customers to start using contracts to foster a more professional workflow. Contact Oerus today if you wish to implement a manufacturing contract with your supplier base. We work with reputable legal offices to draft manufacturing contracts in both Chinese and English.