Product manufacturing and suppliers
What is product manufacturing?
Manufacturing is the process of making of goods by hand or by machine. Items used in manufacture may be raw materials or component parts of a larger product. Manufacturing is a very simple business; you input raw material or component parts to output a finished product.
How can you manufacture products to sell?
This may be one of the most daunting steps when it comes to launching a business. How do you actually take what is in your brain and create a physical product or an actual experience? You may have a business in which you will be creating the product yourself, like handmade jewelry, home-cooked foods, or artisan goods. You may have the need to outsource some parts of your production, like getting bulk T-shirts for your custom prints. You may need someone to help you fulfill the services you are offering. Figuring out where to get the materials and/or resources you need is challenging, but that’s why we are here to help!
You’re finalized your product design. You’ve done several iterations and improved a couple versions of your product and you’re finally ready to make a version you will sell. Below, we’ve put together some guidelines to help you make your final product. Once you review them, you can use the resources provided to find the right manufacturer for you or you can run a quick search for a manufacturer in your industry.
Decide if you will be making the offering yourself or if you will be using external labor.
Can you buy partial product parts? For example, you can buy t-shirts with a specific cut before printing a design.
Can you or will you be able to make any parts or components of your final product?
If you are not making it yourself, then where will you look for labor?
List all equipment or resources you need to create your product or service.
Is there any special equipment required to create your product?
Is there any special resources required to create your product? For example, if you’re creating a food business, you might have some special ingredients you need to import.
Know your product well enough to explain to suppliers exactly the specifications you need (e.g.. sometimes a millimeter can cost you thousands!)
Research platforms or marketplaces that provide easy, low-cost access to equipment and/or labor.
Time: Consider how long they will take to manufacture your product. Communicate your timeline in advance and share your expectations early. Don’t forget to take shipping into consideration here, as well.
Volume: Consider how much product they can make, are you a small business that needs 1,000 items or 100,000 per month. Make sure they have the ability and manpower to make as much product as you need. most manufacturers have a minimum order quantity, MOQ.
Cost: Consider your manufacturing budget. Can you afford them? Don’t forget to include a little wiggle room for the unexpected.
Payment: When do they expect to be paid? What are your payment options? Most factories require a down payment before production begins. The down payment is usually for tooling: 50% deposit and 50% on completion.
Storage: Consider where you’ll store finished products, can the manufacturer store products? For how long?
Distribution: Consider what the manufacturer can do with finished products. Can they deliver directly to your customer? Can they deliver to you or will you have to pick-up the finished product?
Resources: Consider if your manufacturer can handle the sourcing of materials, or if you will have to provide it.
Location: Explore domestic vs. offshore suppliers. Explore your local suppliers who can typically provide better pricing, locally produced (less shipping costs/time) and ask for references for quality checks. Consider advantages and disadvantages of each: high cost but better quality (domestic); low cost and more suppliers to choose from (offshore)
Choose and commit
Sign and provide any applicable documentation
Be aware of all fees
Be aware of quality assurance steps
Can you visit the facility?
Can they provide recent proof of inspections or third-party audits?
Will they subcontract work to other factories, or is all the work done in-house?
Be flexible: your initial design may need modifications to be produced
Build good relationships with your suppliers: for better pricing, quality, and long term sustainability
Find an expert: cultivate a mentorship with someone in the same industry who can help you with the process; point out negotiation pitfalls, import regulations, taxes
This is a lot of trial and error: always make sure you can get a sample of your product before you commit to a full order
Where do you find manufacturers?
If you’re looking for manufacturers, try…
If you’re looking for marketplaces to find services, try…
Why is product manufacturing important?
Choosing the right manufacturer is a crucial step in your new business. They will control your most important component, your actual product. That includes the quality and a large fraction of your operating budget so make sure you arm yourself with research. Compare as many options as you need and always negotiate.
Many manufacturers will give you a product “sample” or prototype. Make sure you take advantage of this opportunity to further refine your product and to compare product versions. Don’t forget to include your customers and get appropriate customer feedback.