The hardest part is over. You’ve got your product idea down. That means you have taken the time to conduct market research. You know who would want this product and why. You have an idea of its potential demand. You have a pretty good sense of what it will take to produce it in mass quantities.
Doing all of this isn’t easy, and you’ve succeeded! Well done! The next step is to find manufacturers who can turn your idea into an actual thing that people can buy.
And to do that, you must enter the world of product manufacturing. A world unknown by most people who just go to stores or shop online and buy things. But it’s an exciting world, because you are literally creating things that didn’t exist before.
Here’s where you begin the journey to find a manufacturer for your product.
Before you’re ready to approach product manufacturers, you’re going to need to know your stuff. Many manufacturers get pitched products all the time, and many of those come from new or uncommitted prospectors.
You are ready. You are the real deal. But the manufacturer doesn’t know that, which means you need to show them your dedication, knowledge, and expertise. Here’s some information to compile before engaging any actual manufacturers:
Product designs and specs
Before looking for manufacturers, you should have something to send them. Develop a visual and a written description of the product you want to make. Do this work ahead of time, because it’s common for things like this to take longer than you think.
The visual could be a sketch, a set of instructions, photos of mockup versions, or even a video if that’s helpful for your idea. It could be a digitally-produced image, created through computer aided design (CAD).
If you don’t already have any product designs, you might need to hire an industrial or product designer who can turn your idea into a visual that sells the concept with clarity and detail. You can find people like this on contracting sites if you don’t already know someone who can do it.
For other products, you may want to just build your own prototype or custom mold. If it’s a food product, you may need to make it yourself, or at least parts of it.
Raw material needs
Every product requires a different set of raw materials.
The endless variety of glass, plastic, metal, and other materials that can be molded, shaped, cut, and fashioned leaves only the question of how to use them for your product.
But where will you get these raw materials? If it’s food, do you have a source already for the key ingredients? Does your product have different components that will require several types of materials?
You may not have all the raw material questions worked out yet when you contact manufacturing companies, but you need to be able to speak knowledgeably about it.
You also may not need to manufacture your product from scratch. It’s hard to talk in detail about this because every idea will be different. But there are manufacturers who make components that can be used to make other products. You may be able to save a lot of time and cost by going with something that already exists.
Innovative considerations
There may be some aspect to your product that is unique to you. You are inventing something new here. That may mean doing something that’s never been done.
With factories around the world today, just about anything you can think of can be made somehow, somewhere. Know which component of your idea is the most innovative part — that may be the most challenging one to manufacture.
An early-stage budget and scope
At this early stage, you won’t be able to list out specific costs or budget expectations, but you should have a handle on how much money you can invest in production.
Most manufacturing companies will expect an upfront payment of some sort. Are you ready for that? How much can you confidently invest in your idea? Are you hoping to produce a large amount of inventory or are you starting off on a smaller scale?
You want to know this ahead of time, because most manufacturers will require minimum order quantities (MOQ).
Trademarks, patents, and product testing
Intellectual property theft is sadly a real thing, and not just in the digital world. It can happen with physical products, too. An unscrupulous manufacturer could take your intellectual property (IP), find a way to repackage it as their own, and sell it behind your back.
The good news is, you can protect yourself from this in several ways.
First and foremost, work only with reputable manufacturers. We’ll show you how to identify the good companies in a moment.
Second, if you are worried about IP theft, you can get protection from things like patents, trademarks, copyrights, contracts, and non-disclosure agreements (NDA), which forbid whoever sees your product information from telling anyone else about it.
An NDA, in particular, is a smart thing to have, especially if you intend to look for a product designer outside of your current network.
If your product will face regulatory hurdles, it’s a good idea to get product testing and certifications out of the way ahead of time. This too can drag on for a while in some situations, and you don’t want to find yourself communicating with product manufacturers, only to have to put everything on hold for months while some entity certifies your product.
Like every new endeavor, you face risks with product manufacturing, and these can have a direct impact on the success or failure of your business. Knowing these risks ahead of time enables you to make better decisions in your search for the right partner.
1. Production or shipping failures
If a manufacturer fails to deliver your products on time — for any reason — you can lose a ton of business. Customers won’t sit around if they can go to a competitor who has something similar in stock.
Production failures and logistical challenges can happen for all sorts of reasons, some of them not even within the control of the manufacturer — such as natural disasters or wars.
This is why you might want to consider using multiple suppliers. If you can have two, or even three, companies making your products, if one goes down for any amount of time, you can continue delivering to satisfied customers.
2. Financial fraud
Even if a company is reputable, corruption and fraud can imperil your product manufacturing. Government corruption, local unrest or instability, and yes, even corruption from within the company, can cost you in many ways.
If you end up using a manufacturer in a different country than your own, get to know the culture and current events of that nation, and build good relationships with the people there, especially the manufacturing manager.
3. Labor unrest
As mentioned already, labor unrest, crises, or abuse can give your business a black eye in the eyes of your customers. And word travels fast on social media. This is why you want to work with companies that seem to have good leadership, a history of stability and success, and strong reputations.
4. Intellectual property theft
Even a good company can still have bad employees, and there’s always a chance that someone will try to profit off your idea without your consent.
Again, get good contract language in place, and have whatever legal coverage you can from patents, trademarks, and NDAs.
Learn what to look for in product manufacturers
There are thousands of factories and manufacturing companies. How can you vet companies in a field so unknown to most people? What does a good company look like?
There are three primary things to look for in a manufacturing partner:
1. Expertise
The right manufacturer should be able to demonstrate a deep understanding of the production process related to the needs of your product. What would it take to produce your idea? What components does it require? Will they need to partner with other manufacturers to assemble your final product or can they do it all in their own production facility? How many units can they produce and ship, and in how much time?
You have a right to expect a manufacturer to be able to confidently talk about questions like these. And you may not be able to evaluate them until you talk to them. You can only learn so much from a website. And manufacturing company websites aren’t known to be very helpful.
You also may not be sure about all the raw material requirements for your product, but a potential manufacturer should be. They should be able to answer the questions you have with little effort.
And, do they have a quality control process they can speak about knowledgeably? Suitable manufacturers will be able to display expertise in all areas from the procurement and handling of raw goods to the quality control and freight shipping processes.
2. Market understanding
It’s far more preferable to work with a manufacturing partner who has produced other products in your market or industry than a general-purpose factory that does all sorts of things.
You want to find a manufacturer who understands your market, the quality of products customers expect, typical price points, common problems and logistical challenges, and the other details unique to every market sector.
Depending on how new or innovative your product idea is, you might not find a perfect manufacturing partner for this. But whatever industry your product falls into, you can find manufacturers who have successfully tackled new concepts in the past.
3. Professional reputation
Even though it’s not your company, if your product manufacturer ends up having problems that result in bad press, customers won’t distinguish between them and you. They’ll say, “You should have known.”
That’s why you want to find manufacturers with strong, well-earned reputations. How can you tell the reputation of a company that may be halfway around the world? Here are a few ways:
- Look for trouble with regulators. See if they have a history of being fined or penalized. If regulators are already breathing down their necks or they’re constantly having trouble in their manufacturing facilities, you can consider that a red flag — and stay away.
- Examine labor and environmental policies. How well do they treat the employees in their manufacturing facilities? Do they have a lot of turnover, or are people happily employed? Are jobs at this company considered valuable and in demand? What are their environmental safeguards and policies, and how well do they enforce them? Take note of the communities nearby the factory, and assess the company’s reputation among the locals.
- Research other brands. What other brands are using this manufacturer to make their products? If you can’t find this out before you actually talk to the company, that’s okay — make this one of your questions in the vetting process. But if you can find out beforehand, that’s even better. Go look at the products they’re making for other brands. Look at that brand’s reviews, and see what customers say about the products. Again, customers will blame or applaud the brand for quality, but if the product quality is bad, that’s really on the manufacturer, not the brand. You can avoid ending up in this situation by finding manufacturers who seem to have a good history of creating higher quality products.
This may be one of your biggest decisions in choosing which manufacturer to partner with. But remember — you may be able to work with both domestic and overseas manufacturing companies, thus leveraging the advantages of each option.
Still, it’s very helpful to know the advantages and disadvantages of working with both domestic and foreign manufacturers. Here are some of the main considerations:
Cost vs convenience
If a manufacturing partner in another country can offer lower prices, you may lean heavily towards choosing to work with them. However, you also have to factor in the cost of shipping, which will be much higher if you’re crossing borders. And that’s before considering all the laws and red tape around imports.
But assuming that lower costs are an advantage of using a foreign manufacturer, one benefit on the flip side is convenience.
It’s far more convenient to work with a company that’s, at most, just a couple thousand miles away and on the same land mass as you. You can drive there. You can hire someone who lives in that town to work with them.
It’s just easier to work with companies in the same country as you.
Product quality
It’s not necessarily true that products manufactured somewhere else will have lower quality than ones made in your own country. But in general, you get what you pay for. And the lowest-priced manufacturer may not be the best choice for your products.
If you’re selling and marketing your items as high-quality products, make sure they actually are. And that may mean paying more for the manufacturing process.
Reliability
A company that’s close by will typically be more reliable, simply because there are fewer things that can get in the way.
Infrastructure can be impacted by natural disasters or civil unrest. Ports can close. Airports can be inaccessible.
If you manufacture domestically, you won’t have to worry about ports — unless your chosen manufacturing partner gets some of its raw materials or components from overseas.
Ease of monitoring and access
If you can find a manufacturer for your product who can produce domestically, you can go visit their production facility much more easily. If you have a question about their process, a product defect, their labor or environmental situation, or their leadership, you can very easily go visit local manufacturers in person.
With overseas manufacturing companies, not only do you have the greater difficulty of traveling there, but you may also have a language and cultural barrier. It’s also a different government and regulatory system with different laws that may cause confusion or serious misunderstandings.
There are firms that specialize in dealing with these kinds of foreign manufacturing barriers. Look for a sourcing agent who works with manufacturers in the country you’re considering.
Distance
Being farther away just makes it harder. If you ever need to travel to visit overseas factories, it will be far more costly than traveling domestically. And more time-consuming.
And, even if you don’t travel overseas, communicating with the manufacturer can be difficult with varying zone differences. One of you may have to get up at two in the morning to have a call.
Number of choices
While you can see there are several advantages of working with a domestic manufacturer, cost isn’t the only reason to consider going with a foreign business partner (if that’s actually an advantage in your case).
One of the biggest advantages of international manufacturers is the sheer number of them you have to choose from. Depending on your product, you may have a difficult time finding a domestic or local manufacturer who can make your product. And even if you do find one, they may need to adjust or innovate their production process to make your product work, and this will drive up your costs even more.
When you open up your mind to the rest of the world, you’ll likely have far more choices. Every region has specialties in terms of talent and education, experience, and even proximity to raw goods and infrastructure.
So, you will probably have a lot of choices if you go beyond your own borders. Choices are good. That means you can find the best manufacturing partner for your product. And because the costs will probably also be lower, this is why a lot of companies decide to work with overseas manufacturers.
So, you’ve got your product information and designs. You have a good idea of what to look for in a company that can manufacture products like yours. You’ve probably decided whether you’ll be looking domestically, overseas, or both.
Now, it’s time to start doing some thorough research to find manufacturers for your product. Here are some places to search:
Online directories
You can find and pre-vet some manufacturers on online directories that specialize in listing manufacturing companies.
Here are a few of the main ones:
- Maker’s Row. This U.S.-based manufacturing directory specializes in clothing, apparel, and furniture. If it has fabric, U.S. manufacturers that can make it will probably be found here.
- ThomasNet. For custom products that may require raw material sourcing, this U.S.-based directory features manufacturing companies in the commercial and industrial supply sector. Over half a million suppliers are listed.
- MFG. This directory includes both foreign and domestic companies. It also features ratings and reviews from other companies, so this is a great site to use in vetting the reliability and professionalism of manufacturers you’re considering.
- IndustryNet. Industrial supply manufacturers can be found here in great number across the entire supply chain. It’s a great place to get all the varying components required to manufacture products in a variety of industries.
- Council of Manufacturing Associations. This alphabetized site lists associations for just about every industry you can imagine. You can use this site to get some industry perspective on companies you may be considering, as well as get recommendations for potential manufacturing partners, and much more.
- Alibaba. One of the most well-known online supplier directories for finding overseas manufacturers, Alibaba is another great place to vet companies and find a manufacturer regardless of product category. They have a process that enables you to contact companies, and a rating system that verifies quality. ‘Gold suppliers’ pay for their Alibaba membership. ‘Verified’ means that either Alibaba or a third-party company has visited the manufacturing facility in person and evaluated its authenticity. And they also offer free ‘trade assurance’, which protects any orders you place until they get delivered to you.
- Dun & Bradstreet. This site lists companies from numerous nations and shows you some of their financial data. Companies with strong revenue are typically more reputable, so this is another great place to vet manufacturers you’re considering working with.
- Kompass International. This directory lists international manufacturers from over 70 countries.
- IndiaMart. India has over a billion people, and is becoming one of the leading international suppliers. This directory lists manufacturers based in India specializing in a wide range of industries and products.
Search engines
You can also look for manufacturers on traditional search engines. Just keep in mind that digital marketing isn’t their specialty and finding quality results may be more difficult than you’re used to. This is one case where you may want to look well past the first page of search results (or the second).
Still, if you get creative and persistent, you may be able to find something. You can also try combining various search terms including country names, and with advanced search practices such as using quotes, the + symbol, and various other advanced search strategies.
You can also look for what are known as sourcing agents for specific countries.
A sourcing agent is someone who specializes in working with companies from a particular country. They know the culture, the business climate, the key players, the regulations, and other information unique to that country that can help you find potential manufacturers to work with.
An agent can also help you communicate and negotiate with the companies you find.
So, you could search for ‘Vietnam sourcing agents’ or ‘China sourcing agents’, and you may find someone who can help you. Keep in mind that such a person will, of course, charge a fee, so you’ll have to factor that in.
NAICS
This stands for North American Industry Classification System. Every product and manufacturer in North America should, in theory, have an NAICS code, and you can use this to find companies who may be able to produce your products.
The NAICS website has a searchable directory, broken down by industry. And here’s the United States NAICS code guide and the codes for Canada and Mexico.
Your professional network
Lastly, if you’ve met other businesses in your industry, some of them may work with the manufacturers you’re considering. Think about the people you’ve met. See if you can actually make use of that pile of business cards you’ve stashed somewhere. Browse your contacts and past email communications.
You might just know someone who can connect you with a great manufacturing company.
Some manufacturers get a lot of product requests, and many turn out to be from uncommitted or highly speculative entrepreneurs who are reaching out way too early in the process. So, some manufacturers aren’t very responsive at first.
Because you’ve gathered your information and know what you want, you should be able to stand out from that group and get a response. And when you do, you’re going to want to ask some questions to help decide which company or companies to work with. Here are some questions you may want to ask, depending on your product, budget, industry, and other considerations.
Do you make custom orders?
Find out how much your order can be customized to fit your specific needs. Some manufacturers make components and parts that get used in other finished products, and they only make these components in one or two ways.
What is your lead time?
Get an estimate of how long you’ll have to wait for the finished products or components you need to be manufactured and delivered.
What are your shipping costs?
Shipping tends to be determined by weight, size, and quantity. Explore your options with regard to how many units you might decide to order from the manufacturer for your product.
What is your minimum order quantity (MOQ)?
You should probably ask this question in your initial communication, because if their MOQ is far above what you’re willing to invest in at this point in your business development, there’s no reason to waste the company’s time.
What is your cost per unit?
This will often depend on how many units you order. Find out your options and consider how many sales you can realistically expect to make. You do not want to be saddled with piles of inventory you can’t sell.
Can I get exclusivity?
You may or may not need this. But if you want to be the only company in your industry or niche that works with this manufacturer so you can prevent competition from being able to make comparable claims about quality, source, or other differentiators, find out if you can get on the same page and strike an exclusive deal.
Are there any setup fees?
Know all your costs in addition to shipping and manufacturing. Don’t get surprised by any unexpected fees.
What is your defect policy?
Quality control is a critical component of manufacturing. Ask about their policy for defective products, especially if you get a whole shipment of unsellable finished goods, or customers begin complaining in great numbers.
Can you share your policies on sustainability?
Know ahead of time what your chosen manufacturer is doing with regard to environmental responsibility. This matters more in some industries than others. But many customers care about this, and again, you don’t want to end up getting bad press because of your manufacturer.
How are your employees treated?
Like sustainability, make it clear up front that you care about the ethical practices of the manufacturer for your product. Obviously, asking this question could lead to a dishonest answer.
No company will just come out and admit they treat their employees badly at their manufacturing facility. But by asking the question, you’re making it clear that this and other ethical issues matter to you. It begins the conversation.
Once you’ve collected a good handful of potential companies, reach out to them using whatever channel makes the most sense based on how you found them.
If you’re using Alibaba or a similar type of platform, they may already have an existing system through which you can reach out. If you found them through the internet or NAICS, communicate using whatever channels are available, be it phone, email, or otherwise. If you found them through your network, maybe mention the person already doing business with them to bolster your credibility.
When you reach out, you want to come across as a serious business owner with an idea you are ready to launch.
This is where you’ll use all that information you gathered regarding your product idea back at the start of this guide.
Share your product designs and specs. Discuss the quantities you anticipate needing. Ask about mockups and product samples.
For each manufacturer you’re considering partnering with, request a quote. And do your best to get quotes for similar quantities. Also, don’t look only at the overall price. Focus on the cost per unit and any variations in shipping (especially if you’re comparing both foreign and domestic providers).
With each quote you get, remember to consider all the costs of manufacturing. Not all of these will show up on the actual quote. Remember — the whole point of this is for you to make a profit. You can’t determine your profit margins, and know what prices to set when you begin selling, if you don’t have a clear and specific grasp on all costs associated with the manufacturing of your product.
Here are the costs you need to know in addition to the manufacturer’s stated cost per unit:
Customer service and product quality resolutions
The more returns, complaints, and defects you have to deal with, the more your costs go up. A manufacturer with a good quality control process and defect policy will positively affect your ultimate cost per unit.
Try to get some of their history with other products they manufacture with regard to defects and how they handle them so you can put a price on this as an anticipated expense. In other words, if you order 1000 units, and five of them are bad, that means you can only sell 995 of those for a profit.
Payment flexibility
Some manufacturers have different policies on payment. Some will want the whole price paid up front for your shipment. Others will let you make a partial upfront payment. Others will put you on a payment plan of some sort. There may be interest charged. There may be late fees.
Find out what each potential manufacturer offers in various scenarios.
Shipping
It may depend on how many units you order, how fast you want it shipped, the method of shipping, and other factors. See what you can do to get the lowest possible shipping cost.
Warehouse storage
Where will you put all these products when your shipment arrives? If you’ll have to pay for storage, that too is a cost to factor in. And this is another reason to not order too much until you’re sure you can sell it at a reasonable pace. But, you also don’t want to run out of inventory before you can get the next shipment.
Raw material processing
This again is highly dependent on your product and industry. Raw materials may be procured from several different places around the world. They may come from local sources. Who is doing this, and how much variation in costs might there be depending on which manufacturer you use?
Design and engineering
You have invested money in the development of your product already, to some degree. But once you begin the mass production process, there will likely be additional design and engineering costs required. This could include packaging as well as the product itself.
You may reach a point when you are done with design, and can just produce and sell. But whatever you spend before that point is part of your costs that must be recovered through sales.
Market price
All of the above costs help you determine the price to set for your products. How much will you charge? How quickly do you want to recover your initial investment in all this? What must you charge to ensure you stay well ahead of all your other costs? How low can your prices go for situations when you want to offer discounts or special deals?
You can’t answer this until you go through the careful planning process outlined in this guide.
Your price per unit
When you know your price per unit, you can answer your questions about market pricing. Selling for anything less than your price per unit means you are losing money. This is your bare minimum. The more you can charge above it, the faster you’ll become profitable and can grow your business.
With quotes in hand, you want to also ask for samples of the product you want them to make. This confirms the manufacturer understands your product and can produce it correctly. You can also use samples to help pass any regulatory hurdles or approvals that may be necessary.
And, the samples may reveal problems with your idea you couldn’t anticipate ahead of time. You can work through those with the right manufacturer to ensure your final product meets all of your expectations.
As mentioned earlier, you may find it wise to work with multiple manufacturers, if you can afford the minimum quantities for both companies. Or, you may want to just start off with one, and perhaps add others on as your product proves itself and your business grows.
With quotes, samples, and all the other information at hand, make a final decision about the number of manufacturers you want to work with at this point in the process.
Then, decide on the ones who will ultimately get a contract.
With your decision made, you can finalize the deal with the company you’ve selected, and work out all the details to start producing products.
The final deal should formalize all the issues raised throughout this guide, from costs, to shipping, to product defects, trademarks, NDAs, codes, regulations, cost per unit, payment terms, business license needs, and everything else that led you to choose this manufacturer. Get it all in the deal, and you’re ready to go.
Alternatives to traditional product manufacturers
There’s one other thing to consider before you start gathering information about your product and researching manufacturers.
There are other types of companies you may be able to use to meet your manufacturing needs, but with a lot less work. Some of these options may offer favorable opportunities that cost less and can get moving faster, with less risk.
Dropshippers
Some manufacturers will actually ship products directly to the customer on your behalf. This approach requires no inventory and is much faster to set up. Typically, dropshippers sell existing brands or white label products you can package under your own brand.
This means you don’t actually need a whole new idea and manufacturing process to start selling. You can bypass large portions of what you just read in this guide.
Print on demand
With print on demand companies, you create a product design or idea, and the company creates the product using a pre-existing, unbranded item. For example, you could create a t-shirt or other clothing design, and the print-on-demand company uses existing blank slate clothing in their inventory, and customizes it to feature your designs. Typically, they will then ship it directly to the customer on your behalf.
You can employ a print-on-demand model with all sorts of products.
And many such companies will also let you order a smaller supply of inventory that you can ship to customers as they place orders. Printify, Printful, and Scalable Press all offer this option. So, it’s like a mini-version of a manufacturer, producing a much smaller inventory. This allows a small business to get a product manufactured, test your idea before committing to a large purchase, and pivot more easily.
Suppliers
Some of these terms are interchangeable, and a supplier can also be a manufacturer. But, it can also be a wholesaler. Not all suppliers use the same business mode. Suppliers might sell to any of these types of companies as well, and to manufacturers, and also straight to retailers.
So it’s kind of a catch-all term.
Wholesalers
A wholesaler buys products from manufacturers or suppliers and then holds them in warehouses so they can sell them in bulk, typically to retailers. This is an intermediary company.
But depending on your product, you may be able to buy from a wholesaler, who has already done the work of getting a product made and bought large quantities of it. Then, you just buy from them and use it to create whatever product you have in mind.
This approach doesn’t necessarily allow for as much innovation, so it may not work in your situation. But don’t write it off, because if your product also relies on various components, there could be wholesalers who sell those components already, reducing the number of actual manufacturers you need to work with.
Learn more about choosing the right wholesaler.
Trading companies
A trading company resembles wholesalers in some ways, but they typically have a much greater variety of products, and sell them in smaller quantities. So you’ll find a lot more choices with trading companies.
Typically, trading companies have little to do with product quality. A trading company is, again, just an intermediary, and oftentimes don’t even know the real manufacturer because they bought the product from a wholesaler or other supplier.
This is a lot of information, but manufacturing your own products is not a small endeavor. That’s why many online businesses are using dropshipping or the print on demand business model. They’re easier to get started.
But to chart your own course and make something new, you can build a much bigger legacy and make a real impact in business and commerce that alters what people buy and what they value.
So if manufacturing a product is what you’re motivated to do, now you have a good guide and all the steps and resources you need to embark on the journey of making and selling a new product.
About
Kathryn Marr
