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 would-be entrepreneurs slip up. They don’t know how to get their products manufactured, or even where to find suitable partners.
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 clear-cut, however. Both domestic and overseas manufacturers have their own pros and cons, as we’ll see below.
Domestic manufacturers
Pros
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 in-person
Easier to get legal recourse in case of conflicts.
Cons
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-types are actually made locally. It is especially difficult to find domestic manufacturers for low-tech products.
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.
Overseas manufacturers
Pros
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-knacks are made in China.
Easy to find good manufacturers on established platforms such as Alibaba.
Cons
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.
Our Recommendation
Despite the risks, it is far more cost-effective to get your product made overseas, especially when you’re new to the market. You can explore other options (including moving to a better, more expensive manufacturer overseas) once you have verifiable demand and cash flow.
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 up-close look at their facilities and samples. This takes a huge amount of risk out of the manufacturing equation.
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 product-type.
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 in-person.
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 time-consuming process is to visit trade shows. You can easily meet hundreds of manufacturers at these shows at the same time, saving you weeks of effort. It is also possible to find some manufacturers at your local trade shows as well.
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.
Search online
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:
China
Alibaba.com
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 Alibaba-verified suppliers with strong performance ratings. You can also take advantage of Alibaba’s trade assurance to reduce risk. Recommended platform for nearly every product category.
GlobalSources.com
Global Sources — or GS – is Alibaba’s closest competitor. There is no trade assurance, but you get extensive ratings and some assistance with your order. Recommended if you can’t find anything on Alibaba (highly unlikely).
Made-in-China.com
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.
Europe
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:
All.biz
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.
EuroPages.com
A Europe-only B2B e-commerce platform for finding manufacturing partners. Best used for finding manufacturers locally, then meeting them in-person.
USA
The US actually remains the world’s second largest manufacturer, accounting for 17.4% of the world’s manufacturing output. If you want to produce in the country, here’s where you can find help:
MakersRow.com
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.
ThomasNet.com
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.
Others
Besides the above, there are a handful of other platforms you can use as well:
IndiaMart.com
India’s version of Alibaba. Best for sourcing apparels, chemicals and medical supplies — product categories India excels at.
TradeKey.com
A large B2B marketplace for connecting suppliers with buyers. Has a strong focus on Asian countries, especially India, China, Pakistan, Taiwan, Malaysia and Bangladesh.
MFG.com
A large directory of manufacturers from over a dozen countries. Boasts strong search features, though there are no strong value-adds like Alibaba trade assurance.
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 low quality candidates and select a partner you can work with in the long-run.
Here’s a step-by-step guide to evaluating manufacturers.
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-million dollar 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 product-type.
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 product-type as yours. Again, most serious suppliers will be happy to send you a handful of samples at no extra cost. A manufacturer who is unwilling to send a few dollars-worth of product(s) won’t make a good long-term partner.
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:
References
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).
Online search
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 in-house designers).
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-unit price, the higher the MOQ.
Finally, 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. Depending on the turnaround time, you might receive your finished product within weeks!
Conclusion
Finding a trusted manufacturer who can deliver high quality products on time is one of the toughest parts of running a business. It is also crucial for success. Invest lots of time in searching for the right manufacturing partner and follow the guidelines above to make your search easier.
Key takeaways:
Best to manufacture product overseas initially, preferably in China.
If you can, travel to China and meet manufacturers in-person.
Use directories such as Alibaba to search for manufacturers online.
Ask detailed business questions and do due diligence before settling on a manufacturing partner.