Killing the number one myth about finding and working with manufacturers overseas
One important question I get a lot is about finding suppliers to manufacture your product line. After being in business for many years, I would say the manufacturing part is, for sure, one of the most intimidating aspects of running a design or any product based business (the second is logistics and stock keeping, but hey – let’s leave it for now)
So how do you find great manufacturers, create business relationships that last, and manufacture products that actually look and work like you wanted in the first place?
First, I’d love to kill a number one myth that I hear, a lot.
Manufacturers don’t want to work with small businesses
Finding manufacturers is hard. Any product-based company owner is going to run into a long, arduous hunt for manufacturers who can meet the requirements, time schedule, material, and volumes of the new business. Even if manufacturers generally like to deal with large buyers, I’ve learned that they do cater small companies too, only at a different price point.
So let’s kill this myth.
You have to find the factories that work with smaller customers and build great relationships with them. I’ve found that manufacturers in India are more likely to work with small companies that manufacturers in China. Maybe because China is the largest manufacturing country in just about any industry.
Obviously, the price is higher for small production, but that shouldn’t be your main concern. Once you grow your business and buy larger volumes, the prices will go down and you will enjoy better profit margins for your products.
Manufacturers overseas produce low-quality products
This is just not true. Look at any brand you love, most of their products are manufactured in China, Vietnam, India or other low-cost countries. Because let’s face it, when you go for the large production rounds, the profit margins that you can achieve by working with low-cost countries are unbeatable. Factories in these countries have just the same machines (if not better!?) as the ones in your local factory, and they handle customers like yo all time time. So, as a starting point,
Factories in these countries have just the same machines (if not better!?) as the ones in your local factory, and they handle customers like you all time time. So, as a starting point, expect that the quality is just as good as it would have been manufactured close by.
Manufacturers overseas are difficult to work with
Well, yes and no. I personally have great relationships with our manufacturers so I don’t experience them to be difficult to work with, but of course, you cannot remove the fact that you are in totally different countries, communicating in different languages and that the way of working is just different. Just make sure you have a plan for quality assurance and you’ll be fine.
If you are just getting started, here are a few ways to go about it:
Find a local manufacturer – then move your production once you start getting momentum
You can quite fast receive your samples and start marketing and selling! Generally, local manufacturers can offer you very small production volumes but at a cost. But, there are a few important things you should consider: building the relationships with manufacturers require a lot of time, so every time you change a manufacturer, you need to establish new contacts, agreements, and relationships.
This is not done in a heart beat.
And if you are totally new to manufacturing and your aim is to get greater profit margins (i.e. lower manufacturing costs) I think it’s better to start practicing the art of international business sooner rather than later.
Also, keep in mind that the quality probably is different. Again, I’m not saying it’s lower by any means, it’s just different every time you change the manufacturing partners.
So where do you find great overseas manufacturing partners?
+ Ask your branch colleagues where they found their suppliers and whether they would be kind to share? Probably not though…
+ Visit the embassies and trade councils close to you – they are happy to help!
+ Go online and start looking for suppliers. Alibaba.com is a great place to source just about anything you need.
+ Visit trade fairs and meet the suppliers. Prepare with comfortable shoes and business cards (yes, you those small pieces of paper that are used to share your contact details, those!)
When approaching manufacturers you should share your long-term vision with them, even if you just started. This could help them to respond positively to your request.
Want to create a solid strategy for manufacturing your goods?