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How to Find a Manufacturer for Your Product Idea

If you’ve been thinking about starting a business, you may have brainstormed some ideas of your own. Making the transition from idea to physical product is not necessarily quick. Properly manufacturing your product requires an understanding of the design, materials and budget. For most businesses to turn ideas and prototypes into a tangible product, they will need the help of a manufacturing facility. 

Finding the right product manufacturer, in today’s global economy, requires a lot of research. At this point, many would-be entrepreneurs lose traction and give up on their business idea because they don’t know how to get their products manufactured, or where to even begin looking for one. Although this process might feel overwhelming, there are many versatile resources and best practices available to help you find the right manufacturing partner for your product concept. 

This post will 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.

Learn the Different Types of Manufacturing Partners

Before you get started, it’s important to understand that there are a few different types of suppliers who can help bring your product to market. These are:1

  • Manufacturers: the actual factory that produces your product.
  • Wholesalers or distributors: middlemen who buy pre-made products in bulk and add their margin to the total cost.
  • Trading companies: these middlemen have relationships with factories that produce a certain product category. They make money by adding a margin to the cost of the actual product costs.
  • Drop-shippers: these companies supply products and fulfill orders of already-existing brands.
  • Source agents: these middlemen may actually work with a wholesaler or trading company and perform a very similar role.

Choosing a Manufacturer: Domestic or Overseas

As a next step, entrepreneurs need to decide whether to produce locally or abroad. While domestic factories tend to be relatively easier to communicate with, they may also charge higher rates and offer fewer options. Especially in the US, buyers are faced with a challenging business question of whether to outsource or insource manufacturing capacity.

Until a few years ago, this was an easy choice: most products were not built locally. The default option was to outsource overseas to China. This has changed in the last few years as manufacturing and economic activity has picked up in different regions of the world – most notably, Latin America. It is now possible to get some products made by domestic manufacturers at relatively affordable prices.

As with most business decisions, there are trade-offs to manufacturing domestically or abroad. Below is a list of pros and cons that you should consider based on your business’ individual needs.2

Domestic Manufacturers

Pros

Cons

  • Faster and easier communication
  • Higher manufacturing costs
  • Shipping is faster and often cheaper
  • More limited product offering set
  • No customs payments
  • More difficult to reach scale
  • More payment choices
  • Higher labor costs
  • Lower chances of IP theft
  • Potentially lower quality

Overseas Manufacturers

Pros

Cons

  • Lower costs
  • Potential brand value impact
  • Possible to get high quality
  • Higher chance of IP theft
  • Wide diversity and range of choices
  • Language barriers
  • Global platforms provide access
  • Not easy to verify manufacturer
  • Quickly scale up capacity
  • Additional costs due to customs

Where to Find Manufacturers

There are two ways to go about the manufacturer search: meeting manufacturers in person or looking them up online. We will take a look at both approaches below.

In-person manufacturer search

This approach of “boots on the ground” is not for everyone. Entrepreneurs will have to devote both time and money to travel to a new country and vet dozens of prospective manufacturers. Most businesses don’t have this type of luxury to get a close-up look at manufacturing facilities and samples, but those that do can remove a significant amount of risk from their manufacturing operations.

If entrepreneurs choose this approach, we recommend taking the following steps for meeting local entrepreneurs:3

  1. Create a shortlist: Make a list of manufacturers who deal with your product-type to narrow down the list of potential suppliers you plan to visit
  2. Set up meetings: Make appointments weeks or months in advance in order to meet with these shortlisted manufacturers
  3. Clear the language barrier: If a manufacturer does not speak English, hire a trustworthy local translator to guide you through the meeting.
  4. Meet, Try Samples, Order: Meet the manufacturers and examine their facilities. Ask for samples before you make a purchase order

In addition to this manual-intensive process of meeting local suppliers in their home country, it would serve entrepreneurs well to attend trade shows. These events provide you the opportunity to meet hundreds of manufacturers at the same time, saving you weeks of effort. For example try finding a local trade show on a site like tsnn.com.

Online Search

For entrepreneurs who can’t afford to take the time or spend the money to travel overseas and inspect manufacturing facilities, there are still plenty of ways to find quality manufacturers online. At Exporta, we are committed to serving the businesses that fall into this category. 

Exporta Wholesale is the largest marketplace connecting suppliers in Latin America with buyers in North America. Today, we have a network of over 5,000 Latin American suppliers serving a variety of consumer goods and product categories in the United States. Using our proprietary matching technology, all you need to do is submit an RFQ specifying your product needs, and Exporta will take care of the rest – from finding you suppliers who can meet your purchase requirements, to ensuring high quality materials and an extensive vetting process for manufacturers who have been accepted into the Exporta network

Conclusions

Choosing the right manufacturing partner is a core part of any business’ ambitions to serve a growing number of customers. Entrepreneurs and businesses at this due diligence stage should seek out available resources and start asking the right questions, especially before signing a contract, like:

  • What is your minimum order quantity?
  • What is your sample pricing and production pricing?
  • What is your turnaround time?
  • What are your payment terms?

These questions should give you a good start toward understanding whether or not a particular manufacturing partner is well-equipped to handle your business’ needs. While there are several considerations to manufacturing locally vs. abroad, we believe it is far more cost-effective to get your product made overseas, despite the risks, especially when you’re new to the market. Exporta removes many of the pain points that entrepreneurs experience when vetting a potential supplier because we’ve asked these questions, visited the facilities, and sampled products from all of our supplier partners. Please visit Exporta Wholesale to learn more.

About Exporta Technologies

Exporta Wholesale is the largest marketplace connecting suppliers in Latin America with buyers in North America. Today, we have a network of over 5,000 Latin American suppliers serving a variety of consumer goods and product categories in the United States. 

Exporta’s marketplace offers buyers a full service experience in the origination, sourcing and managing of products. The platform was founded on the idea that curation and service are the most important elements in the buyer’s journey. Exporta’s marketplace is building technology that addresses the pains of sourcing products internationally at attractive prices.


References

  1. https://www.uschamber.com/co/start/strategy/finding-factory-manufacturing-partner
  2. https://www.wix.com/blog/ecommerce/2020/10/find-manufacturers
  3. https://www.ecwid.com/blog/how-to-find-a-manufacturer-for-your-product-idea.html

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