Written by Stephanie Chan, Jan 5, 2021
Having a great product idea is only the first step in making a great product. As a retailer, looking for reliable manufacturers and suppliers is an ongoing and sometimes tiring process. In this article we will outline the process in a simplified way to help you find manufacturers and suppliers for your organization. The process will be broken into finer pieces as well so that you can find what you need no matter where you are in the process.
- What are Manufacturers and Suppliers – Understand the Different Types of Manufacturers and Suppliers Based on Your Needs
- How to Find a Manufacturer or Supplier for Your Product – Understand the Considerations, Risks, and Tips for Your Research
- Where to Find Manufacturers and Suppliers for Your Product – Understand the Merits of Different Platforms, Things to Consider When You Choose a Products Manufacturer, and Questions You May Have for Them
What are Manufacturers and Suppliers?
So, how do you figure out how to get something manufactured? Typically, you will look for 3rd party trading companies or sometimes factories to get your products made based on your design. Depending on who you find, the cost, flexibility and quality may be very different. To ensure you get the best products, it is important to first clarify the definitions of some most commonly used terms to describe those who supply goods and services.
A supplier is an entity that provides goods or services to another business. They are who retailers rely on to get high quality products at a good price to sell to their customers. The term supplier or in some cases, vendor, is an umbrella term that encompasses different types of suppliers, including manufacturers, distributors, wholesalers, and trading companies. Understanding the difference between each one will allow you to find the suppliers and manufacturers you want.
A products manufacturer produces finished goods from raw materials, and then sells the goods to either consumers, wholesalers, distributors, retailers, or to other manufacturers to produce other goods. A products manufacturer generally works with sourcing agents, distributors or trading companies to help them find customers to sell goods to. It is generally easier to connect to suppliers through sourcing 3rd parties, but working directly with factories helps lower the overall cost and increases profit margin for the retailer. The goal is always for factories to directly produce your goods, and we will talk more in detail about how and where you can do that in the later sections. TradeBeyond for example, is a collaborative sourcing app that lets you not only connect to suppliers around the world, but work with them directly on the platform as well.
Distributors are the intermediate parties between the product producer and another party in the supply chain, such as wholesalers or retailers. They generally have business relationships with manufacturers they represent. They are the direct point of contact for manufacturers to reach prospective buyers and for retailers to find manufacturers to produce their products. While the sourcing process is expedited, working with distributors cuts into the profit of margins for the retailers and suppliers. If you are a retailer finding a manufacturer for your product and you are looking for a highly customized and detailed product, then a distributor may not be your ideal choice.
Wholesalers buy large quantities of products directly from distributors and resell them to retailers and or sell to consumers directly. They are usually not involved with the manufacturing of the product, and instead focus on distributing the product. Therefore, wholesalers work more closely with retailers to match their needs. Bear in mind that wholesalers deal with mostly standardized products and don’t have a lot of ability in terms of customization. If you are finding a manufacturer for your product with customized design, look elsewhere.
Trading companies are specialists buying a variety of products in one country and selling them in different countries. They mostly work with high production volumes of products and deal with a wider array of product categories. They make money by adding a margin to the cost of the actual product costs, so more professional buyers will want to buy from the factories directly.
One advantage of trading companies is that they usually have lower order quantity requirements, making it easier to source for seasonal or event-based products. The problem when you deal with trading companies is that you may not know who is manufacturing the product, thus making it difficult to ensure the quality.
How to Find a Manufacturer or Supplier for Your Product
Before you start finding a manufacturer for your product, there are few things you need to consider, and one of them is deciding whether you want to use a local manufacturer in the U.Ss or overseas. Many people will automatically assume that they need to go to China to find a supplier because it is probably the cheapest option. In reality, it is not always the best choice and it depends on the type of product you are going to manufacture, among other factors.
It is true that in recent years many retailers and businesses have turned to suppliers in China to source products. As the trade war between China and the United States intensifies, many businesses have looked to re-shore their manufacturing to minimize potential risks. More retailers turn to local manufacturers or suppliers from other countries such as India or Vietnam to produce their products. Besides the re-shoring trend, here is a comparative chart showing the respective advantage of sourcing locally or overseas.
|Branding||Some consumers respond better to locally made product||May not echo well with your brand|
|Minimum Order Size||You can often order a smaller quantity of product since shipping is done locally||Generally more comfortable with large volume of products, but may not accept smaller quantity orders|
|Verification / Auditing||It is easier to verify a supplier who is located in the same country. There is no language barrier and the process is much smoother||It may be difficult to verify a supplier’s authenticity and auditing is more time consuming|
|Shipping||It takes less time to ship the products since everything is located in the same country||Shipping takes longer and there are higher risks associated with the logistics|
|Cost||Generally more expensive due to local labor costs||Labor and material costs are much cheaper, resulting in lower overall product cost|
|Communication||Both language and culture, making it much easier to communicate and build relationships||Language may become a problem when it comes to communicating about complex designs and issues.|
It is important to make sure the company you work with reflects your values and goals. There are potential risks that you should keep in mind when you are finding a manufacturer for your product.
Unethical Labor Practice
Conducting social auditing on your supplier is crucial to ensure they treat their employees properly and according to the law. Failure to do so will risk damage to your brand.
It is imperative to investigate and understand your manufacturers’ financial situation to ensure they are in good shape. Look for suppliers with good reviews and references to avoid risks of fraud.
If you are trying to find suppliers to produce an original product for you, make sure you find trustworthy companies with credible reviews, and ensure your patents, legal contracts and trademarks are all in place to prevent any abusive use of your IP.
Where to Find Manufacturers and Suppliers for Your Product
When you have an amazing product idea to execute, the next thing that comes to your mind is usually “I need a manufacturer to make my product” and “Where to find manufacturers?” We have provided you a list of online resources for you to get started quickly.
Online Sourcing Platform – TradeBeyond
One of the easiest places to jump start your research is to sign up on a sourcing platform like TradeBeyond to find suppliers and manufacturers from around the world. The platform supports suppliers in various product categories, from pet supplies, toys, sports, tech, home, to apparel, you can find almost anything you need here.
The good thing about TradeBeyond is that with just a simple app, you can look up the supplier directory to find suppliers and check all their verification documents right there. The marketplace allows you to browse all the products the suppliers have to offer and see if there is anything that matches your need. The best part is that TradeBeyond is built for collaboration so that you can work with your newly connected supplier to develop new products directly on the platform. From the app you can directly export your projects and integrate it back to your own sourcing process.
Learn more about TradeBeyond’s features and how they can help you find suppliers for your upcoming products.
Alibaba is a good place to look for overseas manufacturers based in countries like China and India. Although a lot of suppliers on Alibaba are wholesalers and distributors, some do manufacture as well. Make sure you ask about the nature of their businesses before going any further with your discussion. Keep in mind also that there may be language barriers since many of the suppliers are from foreign countries.
This is a marketplace that pairs you with manufacturers that you need and creates RFQs and competitive bids right on the platform. They are more technical based and have clients like Nissan, GM, and Space X using this platform to source technical components. If you are an industrial retailer then MFG is a good choice for you to get started.
This is a free directory with both commercial and industrial suppliers. You can assess and look for suppliers or specific products on this platform easily. When you search, the manufacturers list will show up along with company information, certifications and products after you type in the keywords.
When you are looking for manufacturers or suppliers, there are few things to consider before you settle on one. Below are the list of considerations and tips for each one.
Know that they have the expertise, equipment and production capacity for your product idea.
Do they have previous experience producing a similar kind of product?
Do they demonstrate knowledge of the product category you want to produce your product in?
Do they answer all your questions and guide you through the development process?
If the product requires certifications or special approvals, can they help to certify your products?
What is their annual production capacity? And their current capacity? Will they be able to meet your needs?
It is important that the manufacturer shows confidence in their ability to produce your product and is patient to work with you through the process so you can be reassured about the outcome of the product.
Ask for References
Ask for samples of products the manufacturers have produced for other clients. They should also be able to show other produced goods to demonstrate capabilities. Photos are not a reliable source to determine whether the manufacturer is good or not.
You should also be prepared to show manufacturers what you need them to produce with a set of documentation of your products so that they can evaluate it and see if it is something they are capable of producing. Having a clear set of documents will also help them quote you fairly, eliminate chances of future dispute over costs and other issues.
Having a set of documentation also helps them give you advice on ways to optimize the design to save materials and costs etc. Even if the manufacturer you asked cannot produce the product for you in the end, the advice they give you may help you improve the design and make it easier for the next manufacturer who is going to be producing the product.
Does the manufacturer you find work for any major or notable retailers? Before you choose a manufacturer, do research on their background, including history of the business, previous clients and their reviews of the manufacturer. If the manufacturer is relatively new and does not have a lot of information, you risk getting scammed, receiving faulty products, and other issues. In this case, you can still choose the manufacturer but you need to make sure everything is transparent. Besides external reputation, having an understanding of the labor policies such as employee benefits will help. You want to find a trustworthy factory that you can rely on and also align with your goals.
To make sure any of the above information is accurate from your suppliers, you should conduct a cross reference check on their online presence, trade shows, and other forms of business license and or certificates they have.
You can first look to see if they have their own website. That’s a good sign of a legitimate business, although not always true. Continue your research by checking online databases such as Alibaba and Global Sources. On TradeBeyond, Suppliers who are verified are distinguishable through an icon on their profile picture. For other suppliers, you can check to see which part of the verifying process they are currently doing at the moment. Ask your suppliers if they are part of any trade organizations and past trade shows they have attended. This will further solidify their authenticity. Check for any potential fraud by looking them up on search engines such as Google and Baidu (depending on the location of the supplier) and see if they are related to any fraud cases.
How to find a manufacturer for your product ideas is a question often asked even by experienced buyers. While every retailer has a different method and process for finding suppliers, this article is meant to provide additional options and information to fill in any gap you may have in your current process.
There are many different types of suppliers, and going straight to the factory gives you the best bargain. On sourcing platforms such as TradeBeyond, we allow you to browse through the supplier directory and find manufacturers to produce your custom design. Even better, you can work with your suppliers on developing the product directly on the platform!
Before looking for a manufacturer, consider your objectives and needs to ensure you find the right fit. Factors such as geographic location, branding, order volume, lead time, and costs will influence where and who you choose to produce your products.
In order to prevent risks of poor labor practices, fraud, Ip theft and faulty products, you should conduct a series of research and cross references to ensure the authenticity and reliability of your suppliers. In the end, there is no 100% guarantee that you will find the perfect manufacturer when you are doing solo research. It is more reliable to work with sourcing platforms such as TradeBeyond since suppliers are required to verify their business before becoming an official partner. Check out our guide on sourcing products for further details.