By Pam Baker, editor at large for Brainyard
⏱ 18-minute read
- As an entrepreneur, finding a manufacturer for your product can be difficult.
- To avoid cold-calling manufacturers of dubious quality, try one or a few of the methods below, which include consulting industry certification lists and searching Instagram hashtags.
- Take into consideration whether you’d be better off with a local manufacturer or one based abroad, and be prepared to do your homework before striking a deal in either case.
It’s an age-old conundrum for innovators, inventors and startups: turning an idea into a tangible product at a cost that can turn a profit. Generally speaking, thinkers aren’t makers, at least not at any appreciable scale, and so a frantic search for a high-quality, low-cost manufacturer quickly ensues.
Most entrepreneurs, like the guys behind Goodr Sunglasses, start cold calling manufacturers in the hopes of making a quick and solid score. But is that the best way to secure a product producer? Here are the stories of successful founders and the lessons they learned on how to find a manufacturer.
Method 1: Brave the big, broad world of Alibaba.
Allan Peretz, co-founder and president of a retail e-commerce consultancy called Bold Retail, recommends searching for manufacturers on established business to business (B2B) platforms like Alibaba.
👉 Alibaba is China’s biggest online commerce company and often referred to as the “Amazon of China,” although it is smaller than Amazon by a significant margin. Alibaba.com is a business to business (B2B) e-commerce website, meaning it contains products and services -- including manufacturing -- offered by businesses that other businesses buy. In short, Alibaba.com is a sourcing platform.
Alibaba and B2B platforms like it can be used in numerous ways to help you research manufacturers and secure a working relationship, Peretz said. It’s what he did when seeking manufacturers for Bold Retail.
“We've worked with manufacturers to make products for three different brands that we sell through [U.S.-based e-commerce] channels, primarily Amazon,” Peretz said. “We started off on Alibaba and used the platform to research suppliers in each category we considered entering. Alibaba makes it easy to get an initial impression of who the players are, their quality and how much they sell in your market.”
👉 A note on the difference between suppliers and manufacturers: Suppliers are companies that supply parts or raw materials for assembly into something larger. For example, if your company makes cars, various suppliers would provide sheet metal, leather, pre-formed steering wheels, etc. Some suppliers can also act as manufacturers, such as a company that both supplies the parts for and assembles cars. Alibaba lists suppliers, manufacturers and companies that act as both.
“Once you've identified your list [of potential suppliers and/or manufacturers], it's also easy to engage manufacturers and negotiate terms for your first order. This can start on [Alibaba’s chat tool], but I recommend quickly going to video or voice once initial contact is made. You want to make sure you know who you're dealing with and establish a personal rapport.”
Alibaba lets you search for and chat with suppliers from a vast database.
Method 2: Comb through industry databases.
Shannon Lohr is the founder of Factory45, which provides an online training course for first-time apparel entrepreneurs. She recommends finding your first manufacturer using industry-specific databases like Factory45’s list of trustworthy suppliers that make sustainable fabric -- which is available only to paying students.
Maker's Row, meanwhile, is an example of a marketplace specifically for apparel manufacturers, making it more industry-specific than Alibaba -- however available only to paying users.
You might also try ThomasNet, a broader database of suppliers that’s perhaps the oldest in the U.S., with over a century of history.
Maker's Row is an example of an industry-specific (apparel) database of manufacturers.
Method 3: Run a Google search.
Hassan Alnassir, the founder and owner of Premium Joy, a toy company selling educational foam playthings for children, advises starting with a simple Google search to identify potential manufacturing candidates that have theoretically been partially vetted by the search giant. He prefers this method to using Alibaba.
“Unless your item will be totally unique, I don't recommend looking for suppliers on Alibaba or similar platforms which are probably used by many other companies, meaning there is high demand for the manufacturer’s work,” Alnassir said.
“To find a manufacturer for the item you want to sell, just search on Google using the product name plus ‘supplier’ or ‘manufacturer’ and look for supplier websites that are ranking on the first 10 pages. Manufacturers ranking on the first 10 results pages are essentially vetted by Google themselves to be high quality. And, I don't think many company founders utilize this method when looking for suppliers for their products,” he added.
Some entrepreneurs advise using Google to find a manufacturer for your product.
Method 4: Check industry certification lists.
Calloway Cook, president of dietary supplements maker Illuminate Labs, said he had no guidance nor advisory board to help him find a good manufacturer, so he turned to industry certification listings for recommendations. He chose the NSF’s certification list.
👉 NSF is a public health and safety organization that develops standards and certification programs to “help protect the world’s food, water, consumer products and environment.” A large variety of products in many different industries have NSF certifications.
“If you're not an expert in manufacturing, find an industry-approved certification and only contact manufacturers from that list,” Cook said. “This is a safeguard, because the third-party certification company will have done a lot of the safety testing for you .”
Cook said he contacted only those contract manufacturers which were NSF-certified before choosing to partner with one that offered a competitive price.
Product inspection organizations, like NSF, provide lists of manufacturers that meet their standards.
Method 5: Post and search on social media.
Cook advises using LinkedIn and other professional social media networks to find mentors and manufacturers.
“LinkedIn is your friend! Even if you're not an expert in manufacturing, if you have a decent LinkedIn network you can likely get connected with someone who is,” he said.
He recommends making a quick call with your LinkedIn connection turned mentor-of-the-moment before starting the manufacturing search.
“A call is a great idea because it will save you so much time in the long run. I wasted tons of time arguing specifics with manufacturers to find out days later when their quotes came through that we couldn't afford them anyway. Mistakes like these could be avoided by speaking to an expert beforehand,” Cook said.
Lohr also recommends searching hashtags on Instagram to find a worthy manufacturer. For example, if you wanted to manufacture your designs for a glass water bottle, you could search #glassmanufacturer and #bottlemanufacturer to find suppliers.
Some founders recommend asking your LinkedIn connections for manufacturer referrals.
Method 6: Network in-person, then follow each lead.
Don’t forgo networking at conferences, trade shows and retail association meetings, because that too can render some important manufacturing insights and introductions. It also helps spread your queries and your brand’s visibility via word of mouth.
Julie Austin, the inventor of wrist water bottles called Swiggies and CEO of the consulting firm Creative Innovation Group, says her best manufacturing advice is to “find another person with a similar product and get their factory info.”
So far, she’s used four manufacturers in China, Malaysia and Argentina. Here’s how she found each of them.
Believing she could get solid referrals and reliable insights on manufacturers at conferences and trade shows, Austin first got a booth at a sporting goods trade show and started talking to other vendors.
“I found [a vendor] who made a plastic item, and they turned me on to their manufacturer in Malaysia. I took a chance and sent tens of thousands of dollars to them, and they did a good job with the product. [The vendor and I] even did a licensing deal together since he went to Asian market trade shows I didn't go to. Eventually, he retired,” said Austin.
After her contact and partner retired, she wanted a backup in case something went sideways with the manufacturer in Malaysia.
“So, I found another guy who manufactured a novelty product, and he turned me on to his factory. They didn't speak English, so he became a middleman for me. [The factory] made a great, quality product, and they let me buy lower volume, but having to go through a third party and having a time difference, I was pushed for my deadlines and once had to fly 72,000 units to an event. That seriously ate into my profit,” she said.
But it wasn’t problems with that factory that drove her to get a manufacture in Argentina. It was the need to comply with local law that drove her to find an in-country manufacturer there.
“The factory in Argentina happened because they [Argentina] didn't allow imports, so I didn't have any choice but to have them manufactured there [in order to sell my product in that country]. I delivered my molds and worked out a licensing deal with them,” she said.
Her most recent factory partner, however, actually chose her.
“Believe it or not, my final factory cold emailed me. They had done their homework and knew my name and a lot about my product, so we scheduled a phone call. They were a small family factory and spoke perfect English. They were sticklers on quality, safe materials and getting product out on time. I'm still doing business with them,” Austin explained.
Many entrepreneurs find their first manufacturer through networking at conferences.
Method 7: Go local via incubator programs and industry associations.
Some first-time founders have discovered advantages in finding help with the selection process and ultimately choosing a manufacturer closer to home, where they can have greater control over their product and intellectual property, i.e. patents and designs. The best places to look for local manufacturers are often your local incubator programs, industry associations and Chamber of Commerce manufacturing committees.
Jane McKay took this approach. As the editor and co-creator of Zen of Slow Cooking, a brand with its own food blog and spice blend, she joined The Hatchery incubator, which supports food businesses in her city of Chicago, as well as the nationwide Specialty Food Association.
As a member of those organization, McKay’s company has access to resources and approved supplier lists specific to her area.
“Google searches, while a good starting point, do not always turn up all the relevant results,” she said.
The Hatchery is an example of a local (Chicago) incubator that refers its members to manufacturers.
Choosing between local and international manufacturers
Many founders struggle with the decision of whether to manufacture their products locally for better product control or abroad for cheaper costs. While ultimately that decision rests on the founder or other company executives for reasons specific to your company’s goals, there are a few general points to consider.
Finding and using a manufacturer closer to home can provide you with more control at crucial points in your product’s development.
“The best approach is to source locally because you will have a better-quality product and better customer service in the USA than in other countries,” said Kristen Delacruz, founder and CEO of Spectra Cosmetics.
👉 Sourcing a manufacturer locally can give you better quality control.
Delacruz found it difficult to correct problems with her product when it was produced abroad.
“Using China as a supplier for my liquid lipstick tubes was a battle. The samples appeared perfect, and when I got the shipment of 12,000 tubes, I had to sort through them because many of them had my logo all over the place,” she explained. “My logo was supposed to be centered in the peekaboo window. The manufacturer denied replacement, and customer support was not supportive at all.”
Outsourcing to manufacturers abroad can be done successfully, but it requires additional effort and sometimes involves additional costs -- such as for independent product inspectors and your own travel needs -- that may make that cheap price less cheap.
For example, “as we've gotten bigger, we've built deeper relationships with our manufacturers and have made several trips to China to visit facilities and to meet new suppliers,” said Peretz.
Peretz stresses the importance of being exceptionally specific about your product specifications if you are using a manufacturer based in another country and operating in a different language because misunderstandings are common.
“One of our first offshore production projects included a gift card with an envelope. We neglected to mention that the envelope should have glue on the flap so that it could be sealed, and [we] ended up receiving thousands of units that couldn't be sold as-is.
"Every little detail counts,” Peretz said.
👉 Working with international manufacturers often requires being extremely specific about your product specifications.
Ultimately, quality control responsibility lands on you, which is why sourcing a manufacturer locally is likely to be easier than finding one abroad. If you are outsourcing to a factory in another country, plan to take extra steps to increase your control over quality.
One such step is hiring a third-party quality control inspector, whose specific processes vary.
“When dealing with manufacturers offshore, we also rely on independent product inspectors. Read up on the inspection process, set clear standards and make sure you enforce these standards with your factory,” Peretz added.
If you must cold call …
No doubt some founders will cold call manufacturers. That can put a startup in a precarious position, but it also works out occasionally if you take precautions.
“If you do find a manufacturer by cold-calling, the first thing I recommend is asking for references and speaking to some of their past clients. Then of course, you'll want to see a sample of their work [by having them ship a sample to you] to gauge for yourself if the factory is the right fit for your product," advised Lohr.
Doing your homework
Evaluation and vetting manufacturing candidates should be rigorous whether you are cold-calling or using any of the methods above.
“Where possible, conduct onsite visits to see the facilities and evaluate the processes and cleanliness,” said McKay. Also, “margins are important and challenging at every step of the supply chain. Don’t be afraid to negotiate [pricing] once you find the supplier you trust.”
👉 Where possible, conduct onsite visits with manufacturers.
Finally, she advises taking your time vs. scurrying to strike a deal with a manufacturer.
“If something seems rushed or not right, be cautious. Understand your margins and any minimums suppliers may have. Ask a lot of questions, and make sure to understand all compliance and quality check/control procedures,” she added.
Then, your product will yield some quality sales numbers.