This is a guest blog post by Rich Mokuolu, CEO at Inventaprint
Inventing and producing a product – from conception to completion – is a long, but exciting and rewarding process. One of the trickiest parts of this process is finding a manufacturer to produce your product. This process might take a lot of time, patience and research. Luckily, our interconnected online world makes it relatively easy to research manufacturers and find information. You could also hire an agent or someone with expertise in assessing manufacturing operations. If you’re running a start-up, or if you’re an established business, this professional assistance can be incredibly useful.
Before looking for a manufacturer, take time to research and think about your product development needs. Your research will help answer the critical questions that manufacturers are bound to ask about your product.
Here are some things to consider to guide you in selecting a manufacturer, and how to look for one that can make your idea a fully-functional product.
Finding your manufacturer
One of the first things to think about is whether you want a domestic or international manufacturer.
While it may be cheaper to source your products overseas, it’s worth remembering that there’s more to your decision than the upfront investment and cost per unit – you should also keep in mind landed costs and delivery lead times. Consider that both domestic and international manufacturing have their own pros and cons.
Advantages of using domestic manufacturers
– Shipping is faster and cheaper. Depending on the scenario, your landed cost (i.e. total product cost upon delivery) is cheaper when sourced domestically.
– There are more payment choices and you’re less likely to incur costly fees because of conversion and international bank charges.
– Since it’s easier to travel within your own country, it’s easier to meet with the manufacturer and verify the product quality in person. This is especially important when you need to conduct product changes/updates.
– Easier to get legal recourse in case of conflicts.
Disadvantages of using domestic manufacturers
– Manufacturing and labor costs could be higher.
– It might be difficult to find a manufacturer to reach scale production since many domestic manufacturers are not tooled for high volume productions – shouldn’t be a problem for most entrepreneurs, however.
Advantages of using overseas manufacturers
– The costs could be lower depending on the location and size of the manufacturer.
– You can choose from a large range of manufacturers of varying quality.
Disadvantages of using overseas manufacturers
– There’s a higher chance of intellectual property theft, especially for innovative products.
– Depending on your language proficiency and that of your manufacturer, there could be communication problems.
– It’s less 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 which could include costly taxes.
Searching online for your manufacturer
Some ways to find manufacturers involve visiting prospective factories or using referrals. You might also consider finding a manufacturer online. Check out , a hardware product development platform which connects Inventors and businesses to a vetted network of top manufacturers to bring ideas to life. You may also find it helpful to acquaint yourself with Google’s search shortcuts to improve the quality of your searches and the subsequent results.
For best results, narrow your search down to a handful of potential manufacturers. That way, if their quotes are too expensive or if they aren’t able to produce your product, you can try another.
Requesting a quote
Once you’ve found a suitable manufacturer, how do you approach them?
Before sending a request for quotation (RFQ), there are a few questions you need to ask. Do this and you’re likely to get an informative response and an accurate quotation.
Here are a few important questions to consider before approaching a manufacturer:
– What is your minimum order quantity (MOQ)? This question will help you ensure that the manufacturer’s MOQ is manageable and affordable. MOQs tend to vary wildly depending on the product and the manufacturer so it’s a good idea to be clear from the start.
– What is your sample pricing? You’ll likely want samples to inspect before making a full order. Sample pricing varies depending on the product and manufacturer. Manufacturers who receive many requests may charge full retail pricing while others may offer discounted or even free samples.
– What is your production pricing? You will need to know how much your products will cost. You might also want to ask for pricing for several quantities to ascertain whether they do discounted pricing at higher quantity levels.
– What is your turnaround time? How long will it take before your product lands up in your hands?
– What are your payment terms? Many manufacturers will require new businesses to pay for the full order upfront. You may want to also ask if they provide payment terms on future orders.
If you contact an international manufacturer, note that they may be using translating programs to translate your email as well as their reply. It helps to keep your emails short, clear, well-formatted and free of spelling errors. This will not only help the manufacturer but it will ultimately provide you with better responses. Also, it’s best to number your questions, so that they can easily reply to each number, keeping the questions and communication clean and organized.
Important note – Make sure to do your due diligence on manufacturers prior to making contact. You do not want your idea to end up like the many stolen ideas in the hardware space. You’ve put in a lot of time, money, and effort into your idea. Do not let it go to waste!
Negotiating a minimum order quantity (MOQ)
It’s not uncommon for a manufacturer to require a commitment to purchase a specified number of units for your first order depending on the product. This is known as a minimum order quantity or MOQ. Thankfully, MOQs are often negotiable.
Before you begin negotiating, first understand why the supplier has imposed a minimum. Is it because there is a lot of work upfront? Is it because they prefer to work with larger buyers? Understanding the reasons behind the minimum will help you better understand their position and allow you to negotiate and propose to best counter offer.
When you have a better understanding of your manufacturer’s position, you can offer a lower order quantity. Compromises can include giving the supplier a deposit for a larger order, but just producing small amounts at a time or paying a higher price per unit.
Getting your product manufactured
Now that you have selected the manufacturers to work with, it’s time to start production and see who can make your product at a fair price.
– Have the factory and/or your contact sign a nondisclosure agreement. An NDA can’t guarantee that your product will be completely protected from plagiarism, but it offers you a degree of legal protection. If your intellectual property is stolen, an NDA will help you seek legal recourse.
– 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.
– Finally, place the order. You will have to pay a portion of the balance due before the manufacturer will begin production. Depending on the turnaround time, you might receive your finished product within weeks.
Finding a manufacturer that’s reliable, skilled, and communicative is essential to your product’s success. After all, your idea can be brilliant – but if it’s not produced properly, it won’t be usable. While finding a manufacturer can be a difficult process, it’s worth taking your time and researching the best manufacturer to make product idea a reality.
Inventaprint is a marketplace that connects businesses with vetted high-quality manufacturers to simplify the creative process and achieve lower manufacturing costs.
Our network of vetted high-quality manufacturers service clients in industries such as nanotechnology, medical devices, military products, and more. Clients who use us have saved over 30% in manufacturing costs with shorter lead times!