Once you have a product idea in your head, you may immediately want to get started and ship it off to retailers and see how well it sells. Before you get too excited and pump the gas on your idea, it is crucial to find a reliable manufacturer that will craft quality products and ultimately make consumers want to purchase them.
Unless you are a manufacturer yourself, this can be a daunting process. While the pandemic did a decent job of weeding out the unreliable and low-budget producers who could not keep up with the rising demand, it can still be difficult to find the right company who will meet your every need.
- Key Elements to Finding the Right Manufacturer
- Pros & Cons of Finding a Manufacturer Within the U.S.
- Pros & Cons of Finding a Manufacturer Outside of the U.S.
The Key Elements to Finding the Right Manufacturer
According to Krisjanis Ozols, head of Operations and Strategic Partnerships at Printful, there are multiple factors that wholesalers need to consider when choosing the right company to bring their product ideas to life:
Especially with rising inflation and supply chain issues, you need to determine what you can afford in terms of shipping costs. This will help you figure out whether you need to find a company within the U.S., or source from another country.
The manufacturer needs to be reliable in terms of shipping your merchandise on time and communicating properly with you and your team. If the company is unreliable, this can make it extremely difficult to conduct business with them.
The Ability to Produce Quality Products
Both retailers and consumers will only want to buy your products if they are worth their money, especially during a time when prices are rising across the board and making shoppers more conscious of what they purchase. Your success relies solely on the quality of your merchandise.
The Ability to Scale and Adjust to Your Needs
As your business grows, so too will your needs. Going along with finding a reliable manufacturer, you need to be able to communicate to them if you need more products to be made or if you need to order them more frequently. Be sure the company can keep up with your growth and continue to deliver quality merchandise on time.
With inflation rising the prices of just about everything, price is a very important factor to consider when choosing a manufacturer. Even if you can afford the merchandise, you need to think about whether the consumer would want to pay that much. You also need to think about additional shipping and labor costs, and if they increase, if you will still be able to afford to make the product.
Shipping and Fulfillment Speed
Depending on if you choose a producer within the U.S. or outsource to another country, you need to ensure the merchandise can be made and shipped on time to either you or your retail customers. Factor in any possible delays that may happen to let them know just how much time they have to make your product.
“We are in a very difficult period where prices are constantly going up and down, and supply chain issues come into play with higher and longer shipping costs than in the past, so there are a multitude of factors to consider when finding a good manufacturer,” Ozols said. “Typically, even if you get a product at the quality you are after, the world can have other plans and then your shipping stops where you cannot get the merchandise in on time, or maybe the shipping costs all of a sudden jump and eat away at your margins. There are these factors to consider, so it has been a really tricky situation in the industry for the last couple of years.”
The Pros & Cons of Finding a Manufacturer Within the U.S.
Similarly to making any decision, it is important to weigh the pros and cons of choosing a producer within the country. According to Ozols, this is what you can expect with U.S. manufacturers:
Similar Compliance Values
The U.S. has certain practices and standards that manufacturers all need to meet, such as anti-corruption, data protection, and employment laws, just to name a few. Other countries have very different manufacturing compliances, so you will not need to worry about this with domestic producers.
Nothing Gets Lost in Translation
You will not need to worry about language barriers with domestic manufacturers.
Low Shipping Costs
Whether you are shipping to your warehouse or your retail customers, you can expect lower shipping costs and faster delivery speeds since there is no need for overseas distribution.
Higher Labor & Material Costs
Since the U.S. has strict labor laws and practices, it will most likely cost more to make your product than it would be to outsource from another country. In this case, Ozols suggest a hybrid model, where you manufacture what you can as close to home as possible, and then source certain materials from different countries.
“The U.S. has a lot of great talent and manufacturers that we may have been overlooking in the last decade, but the talent is still there and the momentum is still building. There are now more opportunities to partner with U.S. manufacturers, especially with the supply chain issues, but it also comes at a cost,” Ozols said.
The Pros & Cons of Finding a Manufacturer Outside of the U.S.
According to Ozols, this is what you can expect from international producers:
Other countries may be more willing to produce larger quantities of products for a reasonable price.
Depending on the quality you are looking for when creating your merchandise, other countries may be able to still deliver the quality you desire at a more affordable price.
Higher Shipping Costs
Even if the manufacturer can build more affordable merchandise, you also need to factor in the higher shipping costs associated with outsourcing. In the end, it may cost you the same to just produce within the U.S.
It is important for wholesalers to evaluate the reputational aspect of manufacturers and make sure they are treating their employees right as well as sourcing the materials in an ethical manner.
“There are many opportunities and manufacturing capabilities outside of the U.S., but you also have to factor in the cultural differences and language barriers out there, so in some cases it may be harder to operate if you have producers in other parts of the world rather than domestically,” Ozols said.
All other aspects aside, the most important factor when finding a manufacturer is to find a company that understands your needs and is open to communication. No matter who you choose, issues will arise, and you need a partner who can work with you to make any adjustments and still deliver quality products to you on time. Use these tips to help kickstart your journey in creating long-lasting business relationships.