How to find the best manufacturer or supplier for your product idea?
Finding the best manufacturer and sourcing process is hard for almost anyone starting a business online. Normally you get to know the do’s and don’ts but you do your own set of mistakes and learn.
If your product serves a specific problem, and you don’t see any other product in the market, you are already one step ahead of the game.
In this blog post, you will get to know ‘how to do research?’, ‘asking basic questions from a supplier’, ‘communicating design’, and ‘ordering sample’.
A marketplace where most people go for searching the already selling products. You can search for similar products and start connecting with the manufacturers there.
Vetting manufacturers is important and they can make or break your business. They control the cost of your product, quality, packaging, and shipping.
Choose suppliers from the search field and add your query e.g., lunch box.
Look for the right classifications like ‘Gold Suppliers’ (means they are paying for their membership) and are ‘verified’.
Right next to ‘verified’, there is ‘Trade Assurance’ which allows you to dispute a purchase if the quality isn’t there. Also, on the left side, you can see the menu where you can also find ‘Mgmt Certifications’ you can apply filters as you wish.
Now let’s move on to the product page.
Look for ‘Manufacturer’ rather than ‘Trading Company’. Always deal with the manufacturer because a trading company is like a middleman. However, if you can find a direct manufacturer for the product you are choosing or you want to rely more on the availability of stock that a trading company has, you can go with them as well.
Next look into their location. A good sign is if they are located in an industrial area. If you notice any red flags, ask for a video meeting and ask for their production area/floor. If they keep your meeting off, you can assume that they don’t have their production.
Now, do notice the number of years of experience. This is subjective, you should keep a threshold of 3 years. You don’t want to put the fate of your business in the hand of a manufacturer with only 1 year of experience.
One of the best ways to find the manufacturers is through directories. These directories contain hundreds of manufacturers, wholesalers, and suppliers.
Some popular directories are:
- Thomas net
- Makers row
Conventions and Tradeshows
Different industries have a handful of go-to conventions.
Go in person and get in touch with the right manufacturers.
Check out the convention exhibitors list and start getting in touch with the manufacturers online.
How to present yourself?
The first school of thought says to present yourself as a small business. Introduce yourself as a passionate business owner which may be vulnerable and put you at risk but on the plus side, some Manufacturers are interested to work with startups as they are keen to grow and it’s a mutually beneficial relationship.
The second school of thought says to present yourself as a large business purchase agent rather than the founder. This makes your company look established and gives leverage in negotiations. Also, your manufacturer would be less likely to take negotiations personally.
Secure 2 manufacturers, the main and local/backup manufacturer
Establish an emergency or local or backup manufacturer. So that if your overseas manufacturer is late or short on stock or has sent the wrong stuff, you can ask your local manufacturer for support.
Local might be more expensive but this is important to keep the orders streamlined and more efficient. However, do look into your local manufacturer if they are getting the stuff from the same overseas manufacturer, you might run into the same problem.
Once you have your manufacturers on board ask them these important questions.
Ask these 8 important questions from a manufacturer/ supplier
1-Can they manage/accommodate your custom order?
Do they have the resources and the skillset you are required to produce and what you are looking for?
2-What are their minimum order quantities (MOQs)?
Mostly manufacturers fill some quantities over a certain amount of time. Generally, start with ‘less inventory’ so that you could test the market for selling and storing a manageable amount of products.
Tip: Don’t lead with this question, this shows immaturity.
3-What are the lead times?
Find out how long would it take for a manufacturer to produce and ship items. You don’t want someone to produce items in 3 months’ time meaning long lead times which leads to unhappy customers.
4-What are shipping costs?
Shipping costs take a large portion of the business expenses and affect the final cost of the product.
5-What is the cost per unit?
Larger order meaning lower the cost per unit.
6-Is there any setup fees involved?
7-What is the defect policy?
Who would take responsibility for the defective items? You or the manufacturer? Who would pay for the extra shipping and duties?
8-Is the manufacturer sustainable?
Factory working conditions, how old is the workforce, are they getting regular breaks, how they impact the environment and how do they manage their waste?
Communicate designs and order sample
You have done your research and have found the manufacturer. Start with asking for the designs if they can create them. They are often professionals and can produce your designs.
However, if your product design is beyond their capabilities, you can hire from freelancing sources like Fiverr and Upwork.
Prepare sketches, written instructions, and reference photos so that you can communicate what you are looking for.
You need a 3D rendering of your product. This is useful for sending it to the manufacturer but also this makes you feel confident before going into production.
Order samples from your manufacturer. Keep 2 samples for yourself and send 2 to them.
So that you both could refer to the sample design once they send you the product. This is known as ‘Control Sample’.
Also, do consider ‘Product Approval Waiver’ which is a conditional acceptance. If there is a discrepancy in the batch, you can say for change but you accept the current batch.
Negotiation – keep a contract. Put yourself in other’s shoes and don’t try to squeeze the other party. Maintain a healthy balance. Think of mutual benefit.
The final piece of advice. It is guaranteed that you will make mistakes. Not a question here if you will or not, but you will learn and evolve as the years’ pass.
If you think this blog post is packed with tons of value, and you want some brainstorming, we can help you kickstart your business by researching potential product ideas, sourcing the manufacturers and handling all of your IT. Just let us know.
Get in touch.
Here is another post we wrote on finding the right products for your store? Be sure to check this one out as well. : 10 Best Shopify Dropshipping Products to Sell in 2021