Investing in an Injection Mold: What Is Best Practice in China?

Many importers are puzzled. They ask quotations for a plastic part, and Chinese suppliers quote wildly different amounts for the injection mold.

One reason, obviously, is the nature of the mold:

• Is it in hard metal (e.g. H13 steel), ready to make hundreds of thousands of pieces? Or in soft metal (e.g. aluminium), for making a few prototypes only?
• Is it a single cavity mold (requiring more machine time and more labor)? Or multi cavity (more expensive, but more efficient for large production runs)?
• There are other considerations, of course, but these are just 2 examples of things to specify. See a list of design mistakes and a list of common defects to have an idea of what can go wrong…

And another reason is the business approach of the supplier. What game do they want to play? I listed the main 3 options:

1. You let the supplier make the mold at their cost, the mold is theirs. They include it in the price of the finished product, but you don’t know by how much. This is more expensive in the long run, and you have no control over the supplier (they own the molds you need for your production).
2. The supplier partially subsidizes the mold, the mold is theirs, and again they plan to amortize over time in the price of the plastic parts. This is also expensive in the long run, and you also have no control over the supplier.
3. You pay the full price of the mold, you have a contract (enforceable in China) that says all the tooling is yours and you can get it back, and then you can use the forces of competition to keep the injection molding job affordable over the long term. This is also the safest option when it comes to IP protection.

If you plan to make small production runs and you don’t mind if your competitors get access to the same mold, then all the best if a Chinese manufacturer is ready to subsidize it!

In, on the other hand, you plan to make relatively large series of that plastic part, and if you want to keep control over who uses the tooling, go for option 3.

There are a few things most buyers don’t think of.

First, you need to have an agreement with the supplier that they maintain the mold. They should not store it in a dusty or humid place. They should re-make it if they damage it. And so forth.

Second, what happens when the tooling gets to the end of its useful life?

There are two options:

1. Let’s say your order volume is very high. Supplier might accept to make new tooling for free in order to continue production, without raising the unit cost of the plastic parts.
2. Supplier makes the new tooling in order to continue production, and the full price is paid by the customer (same as option 3 as outlined above).

Overall, in the long run, investing to own and control the tooling is usually the cheapest proposition. One notable exception is the prototyping stage, where having a supplier make cheap tooling on their own can make good sense.