How To Find a Manufacturer for Your Product IdeaSep 3, 2015 by Jesse Ness,
After months of brainstorming and ideating, you finally have a product idea and a business plan to market it. First, give yourself a pat on the back — putting together a product idea is hard work!
Your next step is to turn this idea into reality.
Unfortunately, this is where most
This is why we put together this post to help you find the right manufacturers and suppliers. Once you’ve gone through this, you’ll know exactly where to search for manufacturers, and what questions to ask them.
What manufacturer should you choose — domestic or overseas?
One of the first big decisions you’ll have to make in your manufacturer search is choosing between a domestic or an overseas manufacturer. The definitions are simple enough:
- Domestic: Any manufacturer who produces products within your country would fall in this category.
- Overseas: Manufacturers making products outside the country would be classified as overseas manufacturer.
Until a few years ago, this was an easy choice: most products were not even built locally. If you had to get something made, you had to go overseas, usually to China.
This has changed in the last few years. Local manufacturing activity has picked up, especially in the US. It is now possible to get some products made by domestic manufacturers at relatively affordable prices.
The choice is still not
Depending on your country, picking a domestic manufacturer offers distinct advantages for some businesses:
- Faster and easier communication without cultural issues
- Locally made products might have a higher perceived brand value. For example, consumers are likely to pay more for made in America products
- Shipping is a faster and cheaper
- More payment choices
- No customs payments
- Lower chances of intellectual property theft
- Possible to verify the manufacturer and product quality
- Easier to get legal recourse in case of conflicts.
It’s not all sunshine and roses, however. There are some big disadvantages to choosing domestic manufacturers as well:
- Manufacturing and labor costs are substantially higher
- Very few
product-typesare actually made locally. It is especially difficult to find domestic manufacturers for low-techproducts.
- Might not be possible to reach scale as many domestic manufacturers are not tooled for high volume — shouldn’t be a problem for most entrepreneurs, however.
When you think of overseas manufacturer, you likely think of China. The factory of the world can make your product at extraordinarily low prices with relatively high quality. Some pros of going overseas are:
- Low costs
- Possible to get high quality — provided you are willing to pay the price.
- You can chooses from a large range of manufacturers of varying quality. Both iPhones and flimsy Dollar Store
knick-knacksare made in China.
- Easy to find good manufacturers on established platforms such as Alibaba.
Despite the low costs, getting your product manufactured overseas comes with a laundry list of disadvantages. Some of these are:
- Customers might perceive product as lower quality; can affect your brand value
- High chance of IP theft, especially for innovative products
- Communication problems in terms of language and culture (though the situation is gradually improving)
- Not easy to verify manufacturer or product quality
- Shipping times and costs are substantially higher as compared to domestic manufacturers
- You’ll have to deal with customs (though most experienced manufacturers will be happy to guide you)
- Little to no legal recourse in case of fraud or theft.
Despite the risks, it is far more
That takes care of the domestic vs. overseas debate, but how do you actually find manufacturers? The section below will help you out.
Where to find manufacturers?
There are two ways to go about the manufacturer search: the old school way of meeting manufacturers in person or looking them up online.
We’ll look at both these approaches below.
In-person manufacturer search
This boots on the ground approach is not for everyone — you will have to devote both time and cash to travel to a new country and check out dozens of prospective manufacturers. However, you will get an
That you get to experience another country and culture is just added bonus.
If you’re targeting China, here’s the recommended process for meeting local manufacturers:
- Find manufacturers: Using the sites listed below, make a list of manufacturers who deal with your
- Create a shortlist: Follow the guidelines in the next section to ask manufacturers’ questions and eliminate all but a handful of candidates.
- Setup meetings: Setup appointments to meet these shortlisted manufacturers
- Get help: If the manufacturer does not speak English, hire a trustworthy local translator to guide you through the meeting. Don’t hesitate to pay extra for a recommended contact through LinkedIn.
- Meet, examine, close: Meet the manufacturers and examine their facilities. If you’re satisfied, ask for a few samples before closing the deal.
An alternative to this
- Local trade shows: A number of Chinese manufacturers exhibit their products in local trade shows, especially in the US. This saves you the trouble of traveling all the way to China. You can find local trade shows at a site like TSNN.com
- China trade shows: There are trade shows nearly every day in China. ChinaExhbition.com keeps track of the major shows and their target industry. The Canton Fair, China International Industry Fair, China Electronics Fair, etc. are some of the top trade shows in the country with thousands of exhibitors.
If you can’t make it overseas, don’t worry — there are still plenty of ways to find quality manufacturers online. Thanks to a thriving import scene, there is a huge ecosystem of online directories that will help you search for a manufacturer.
Depending on your target location, here are some sites you can use to get started:
Alibaba is the world’s largest directory of manufacturers and suppliers — a fact that has propelled the company to a $200Bn market cap. There are thousands of
Global Sources — or GS
Made in China deals mostly with larger items and offers quality inspection and reporting facilities. Recommended mostly for industrial products and parts.
Besides the above three sites, there are also a number of LinkedIn groups you can turn to for finding a manufacturer in your industry. A couple you can start with are China Sourcing, and China Sourcing Forum.
The European manufacturing scene is picking up, though it is a far cry from the scale at which China operates. If you’re located in the continent and want to manufacture locally, here’s where you can find some help:
One of the more popular platforms for connecting buyers and sellers. Available in over 24 languages and has a presence in nearly every European country.
The US actually remains the world’s second largest manufacturer with a 2010 industrial output of approximately $1,696.7 billion. If you want to produce in the country, here’s where you can find help:
MakersRow dubs itself the home of American manufacturing. It has a database of over 7,000 factories and neat search tools to find finished products as well as parts.
The online version of a physical publication (Thomas Register), ThomasNet lists over 700,000 suppliers in US and Canada. Also a great place to find industrial designers and CAD modelers. Think of it as yellow pages, but for suppliers.
Besides the above, there are a handful of other platforms you can use as well:
India’s version of Alibaba. Best for sourcing apparels, chemicals and medical supplies — product categories India excels at.
A large B2B marketplace for connecting suppliers with buyers. Has a strong focus on Asian countries, especially India, China, Pakistan, Taiwan, Malaysia and Bangladesh.
A large directory of manufacturers from over a dozen countries. Boasts strong search features, though there are no strong
How to select the right manufacturer?
By now, you should have a large list of prospective manufacturing partners. However, we still haven’t tackled the hardest part yet — selecting the right manufacturer from this list of candidates.
A lot of manufacturers will promise the world but under deliver on the results. It is crucial to weed out
Step 1: Ask the right questions
Start the evaluation process by asking the manufacturer these questions. Do this via email before you do any other due diligence:
- How many employees and machines do they have? What is their annual production output? Any legit manufacturer would be more than happy to provide you with this information.
- What is their manufacturing expertise in? It is best to work with manufacturers who have proven expertise in your product category.
- What is the profile of their typical customers? If they deal only with
multi-milliondollar businesses, they might not give you enough attention.
- Have they ever made any products similar to yours? This gives you an indication of whether they have experience shipping your
- What is their internal quality process? How do they ensure that the products are manufactured to spec?
These are standard questions any quality manufacturer would have answers to. If they are hesitant or refuse to answer them, cross them off your list.
Step 2: Ask for samples
Your next step should be to ask for samples, preferably of a similar
When you ask for samples, it is also a good idea to ask them the following:
- Where is their factory located? This will impact shipping times.
- What is their shipping process? Do they have any partnerships with logistics companies?
- Can they help with clearing customs?
Once you get the samples, examine them for quality and consistency. If they don’t meet your standards, cross the manufacturer off your list. With the manufacturers that get through, proceed to the next step.
Step 3: Due diligence
Before you proceed to the negotiation stage, do your due diligence and find out as much as you can about the company.
Here are some ways you can do this:
Ask the manufacturer for at least 5 references. These should ideally be current customers. If these are businesses of similar size and/or category as yours, it’s all the better.
Call these references and ask them what was good or bad about the manufacturer. If possible, try to buy their product to check their quality for yourself.
Ratings and certifications
Most manufacturers maintain a presence on major B2B platforms. Dig through their online profiles and check their ratings over time. Make note of any excessively negative feedback. Take note of other quality indicators such as years in business, total transactions, and certifications (if any).
Finally, search for the manufacturer by name online. If you see any reports on RipoffReport, any scam warnings or negative reviews, proceed with caution.
Step 4: Review and order
After step #3, you should have just a handful of manufacturers to choose from. It’s now mostly a matter of picking someone who can do the job at the best price. Before starting the negotiation, you need to know the following:
- Documentation requirements: Nearly every manufacturer will ask for a detailed 2D drawing and a 3D CAD model. Ask if they can help you with the design process (many manufacturers have teams of
- Terms and requirements: Ask about their minimum order quantity (MOQ), turnaround time, and payment terms. This will have a big impact on your manufacturer choice. Typically, the lower the
per-unitprice, the higher the MOQ.
How to get a product manufactured?
Now that you have selected the factories to work with, it’s time to start production and see who can make your product at a fair price.
- Send a prototype. By this point, you should know what components you will need, what materials and methods, and market size/demand, as well as the cost of the parts and the retail price. Allow yourself six to 12 months to get the prototype made overseas.
- Have the factory and/or your contact sign a nondisclosure agreement. An NDA is not a guarantee that your product will be completely protected from copycats, but it’s a level of legal protection that sets your level of expectation with the factories you are considering using.
- Ask for a cost quote. Get separate quotes for volumes in excess of and lower than your target volume. This will help you anticipate costs in case of spikes/slumps in sales. Once you have quotes, it’s time to head to the negotiation table and hammer out a deal.
- Finally, place the order. You will have to pay a portion of the balance due before the factory will begin production. Depending on the turnaround time, you might receive your finished product within weeks!
Now you know how to get a product made. Learning how to find a manufacturer who can deliver
- Best to manufacture product overseas initially, preferably in China.
- If you can, travel to China and meet manufacturers
- Use directories such as Alibaba to search for manufacturers online.
- Ask detailed business questions and do due diligence before settling on a manufacturing partner.
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