One of the hardest parts of starting a business is finding the right manufacturer. With thousands of manufacturers all claiming to manufacture the same products, sorting through the noise can be difficult.
The best way to start is to decide on where you’re willing to manufacture your products. In today’s economy, you can find manufacturers for almost any product, in any part of the world. It used to be that certain products needed to be made in certain countries. With globalization, products are now made across the globe.
As an example, many people manufacture in China for the low cost of labor. This aspect of the Chinese economy is very beneficial to entrepreneurs, as products, like watches that take a lot of time to manufacture, can be made cheaply. However, if you’re planning to market your products as “Made in America,” you cannot manufacture in China or other parts of the world.
Below you will find our three essential questions to ask yourself when figuring out where to manufacture your products:
How Much Does Your Product Weigh?
You don’t have to figure out exactly how much your product will weigh, but you do need to have a ball park idea. This is essential for calculating your total costs, as shipping can add up to a lot if your product is heavy. You don’t want to be paying more than what you’re saving by manufacturing abroad if the shipping cost adds up to more than what you’d pay manufacturing in your home country.
In addition to shipping, your product weight can dictate your distribution model. For example, imagine you’re starting a new home appliance company. Most of these products like dishwashers weigh a ton. That is why they are generally sold in stores, where they are distributed by the store. This product’s weight makes it difficult to ship directly to the consumer, as your shipping costs will cut your margin.
What Laws Do You Need To Abide By?
If you don’t follow the laws, someone will eventually catch up to you. When manufacturing abroad, there are a ton of import laws that you will need to abide by. Luckily for you, if you’re using a third party logistics company, they will help walk you through the process. Laws can seem unusual, especially when importing from other countries. One of the main benefits of manufacturing locally, is that you don’t have to deal with import laws.
As a example, if you’re planning to manufacture sunglasses in China and want to sell them in America, make sure your manufacturer can pass FDA standards, as sunglasses are a medical device according to the United States Federal Drug Administration.
What Sales Channels Are You Planning To Use?
This is often the most overlooked question when figuring out where to find a manufacturer, as your supply chain can dictate your sales channels. As an example, if manufacturing in China means your products will have a four week lead time, you may not be able to ship next day to your customers.
The country where you manufacture your products will also have a big impact on product placement. People are more willing to buy a luxury item from Italy than they are from China because of the reputation of each country. These factors are all significant when deciding where to manufacture your products.
Now that you know essential questions you should ask yourself when deciding where to manufacture your products, it’s time to learn how to go about finding the right manufacturer!