This insightful article is a comprehensive rundown of a brilliant piece originally published on Shopify. It throws light on the tussle entrepreneurial minds go through in their quest to find sources for their products. Be it self-manufacture, or finding suppliers for wholesale purchases, getting hold of high-quality products is certainly not a cake walk.
Bottom Line: This article is a must-read for all e-commerce business owners and managers who are looking to effectively source products or establish meaningful relationships with manufacturers or suppliers. The vital tips, comprehensive steps, and valuable resources provided herein will make the entire process more straightforward and efficient.
As we stroll into the future, the process of finding a manufacturer or supplier will become more technologically driven. In the coming years, we expect to see an increased adoption of advanced search tools, AI-powered manufacturing directories, and digital B2B platforms that effectively connect entrepreneurs with potential manufacturers and suppliers.
What Exactly do you Mean by a Manufacturer?
Fundamentally, a manufacturer represents a business entity that turns raw materials into finished goods. They are the ones who sell these goods to a variety of audiences such as consumers, wholesalers, distributors, retailers, and to other manufacturers who wish to create more intricate products. Most of the time, manufacturers adhere to one category of product. In other words, if your product line includes glass, cardboard, plastic, and natural elements, you may need to collaborate with multiple manufacturers.
Are Suppliers and Manufacturers one and the same?
It is important to understand that while all manufacturers can be suppliers, not all suppliers are manufacturers. A supplier represents anyone who can provide you with products and inventory. Apart from manufacturers, this also includes wholesalers, and distributors. However, before you embark on your hunt for suppliers, it would be sensible to figure out the type of supplier your ecommerce business model actually needs. The most common supplier options are as follows:
– A manufacturer that can produce your product idea
– A supplier (who could also be a manufacturer), wholesaler, or distributor purchasing already-existing brands and products
– A dropshipping company supplying products and fulfilling orders for already-existing brands and products
Choosing Between Domestic and Overseas Suppliers
When it comes to deciding whether you should source domestically or from abroad, it is advisable to secure two manufacturers; a domestic one and a foreign one. Having a local supplier as a backup can be handy if international orders arrive late or incorrect. Though sourcing domestically can be more expensive, it outweighs the long delays and unhappy customers. However, if you are looking to maintain a cost-effective balance, countries like India, China, and Vietnam – which have been ranked as the top three countries with the lowest manufacturing costs by U.S. News & World Report, offer an economical solution.
Finding a Manufacturer: A Step-by-Step Guide
Let’s delve into the systematic process of sourcing the best manufacturers and suppliers for your business.
1. Carry Out a Thorough Research
Picking the apt manufacturer for your product is a key factor in determining your success. The right manufacturer can influence the cost, quality, packaging, and shipping of your product. Thorough research through different platforms can help you find the best-fit suppliers:
Google: Use varied search terms such as “manufacturers near me,” “wholesale suppliers,” “distributors” and more to identify potential manufacturers. Also, using Google’s search shortcuts to execute advanced search commands can improve the quality of your results.
Alibaba: This platform connects businesses with manufacturers from China. It is a common marketplace to find existing products, but you may also use Alibaba to connect with manufacturers to create custom products. Use filters for apply certifications to find manufacturers that align with your business values.
Directories: Free online supplier directories can act as catalogs that contain profiles of hundreds or thousands of manufacturers, wholesalers, and suppliers. You can also look up potential suppliers by their NAICS code.
Referrals: Recommendations from professional networks can lead to some good leads. Join online communities or forums to see if anyone there has a positive review.
2. Outreach and Information Collection
Once you have located potential manufacturers, aim to get a minimum of three quotes from them. Make sure to enquire about their ability to accommodate custom orders, minimum order quantities, cost per unit, shipping costs, setup fees, defect policy, etc. It is crucial that you negotiate payment terms and communicate your intentions succinctly.
3. Communicate Your Designs
Ask your potential manufacturer if they can create your design by sharing sketches, instructions, and reference photos. You could use online platforms like Fiverr or Upwork to hire freelancers to create drawings for you.
4. Order Samples
It is vital to get samples before placing a full order, so as to test the product’s quality before it goes into production. Once the sample is up to par, it can be dated and signed to serve as “control samples.”
Negotiating terms such as payment or MOQ is possible even after a sample order is made. The goal is to strike a mutually beneficial deal that ensures both parties are content and profitable.
6. Place Your Order
Once you are content with the product quality and terms, go ahead and place your order to kickstart the production process!
Scouting a Winning Supply Partner
Finding a reliable supplier is a unique and critical process for your new venture. It is normal to encounter hurdles, but with patience and perseverance, finding the ideal partner for your venture is certainly possible.
Understanding Different Types of Manufacturing
“Manufacturing” refers to the process of converting raw materials into finished products by means of labor, tools, and machinery. Certain types of manufacturing processes include 3D Printing, Repetitive Manufacturing, Discrete Manufacturing, Job Shop Manufacturing, Continuous Process, and Batch Process.
You can use directories and suppliers listed above to find a manufacturer that best suits your needs.+