How to Find a Manufacturer or Supplier for Your Product Idea

here are the five steps to finding a manufacturer to get your product made if you've never done this before this video is for you because we're gonna go through this step by step and i'm gonna teach you some secret hacks on how you can save money while you're doing this you're in good hands so let's get started [Music] hi everyone i'm your host michelle bally i have my own ecommerce business where i brought a brand new makeup product to market through trial and error i found my product producer and trust me i made all the mistakes for you so that you don't have to but in any case i love that you're looking to bring a new product to market because this is your first step in a successful business if your product serves a specific problem and you can see that there isn't already a product out there that solves it you're already one step ahead of the game let's hop into the five steps also if after watching this video you want even more help finding a product make sure that you're checking out our free 40-minute webinar that's going to teach you how to find winning product ideas how to validate them and how to get started just click the link in the description box below to get started with this free training now research first you're going to need to do some research here are three ways to do solid research so you can use alibaba directories and you can take it offline by attending conventions let's start with alibaba alibaba is a place where people go to find products that are already existing however this is a bit of a life hack because you can search for a similar product on alibaba and start connecting with manufacturers for your custom request but before we begin let me tell you that vetting manufacturers is extremely important your manufacturer is going to control the cost of your product the quality control the packaging and the shipping and they can really make or break your business also depending on what you're making it can take as long as a year to bring a new product to market so let's do the vetting work up front so that we don't have to backtrack later i lost five months of time working with the wrong partner so here's how you can learn from my mistakes so let's input lunchboxes and then hit search by suppliers first look for the right classifications look for suppliers that are gold suppliers this means that they're paying for their membership make sure that they're assessed meaning someone from a third party or alibaba themselves have been to their factory also look to see that the supplier has trade assurance this is a free service offered by alibaba that allows you to dispute a purchase if the quality isn't there so look for that as well you can continue to search by applying filters filter by certifications to find a manufacturer that meets quality safety and efficiency standards so let's say humane working conditions is a non-negotiable for you you'll want to make sure that they have an sa 8000 certificate i'll link a list of certifications for you in the description box so let's click into one here first thing i see is whether they are a manufacturer or a trading company we want to deal directly with a manufacturer rather than a trading company a trading company is essentially a middleman however if it says manufacturer and trading this is also acceptable as it means they're able to export your products now look to see where they're located if they're claiming to be manufacturer and their address says suite 201 it's unlikely that you're dealing with a manufacturing plant a good sign however is if they are located in an industrial area you want to make sure that the people you're working with are honest business people so if you're noticing any red flags make a note of this and then bring it up to them as the relationship evolves to be a hundred percent sure you can always schedule a video call to see their production floor if they keep putting your meeting off that's going to be a red flag and you're going to want to move on so trust your gut and trust your instincts on this look to see how many years they've been in business this is subjective so for me i look at it as if it were a job interview if a candidate came to me and said i only have one year experience i would not be comfortable putting the fate of my own business in their hands my personal threshold is three years plus because that indicates to me that i'm not going to have to mentor them and potentially pay for their mistakes quick tip is to also look at how niche the manufacturer is if they're creating lunchbox on the one end and then tutus on the other you might want to think twice a manufacturer that focuses on one niche will reflect how much leverage they have on the purchase of their raw materials for one and secondly a niche manufacturer also means that their workers are good workers that focus on this one thing day in and day out will reliably produce quality items consistently if you're keen on using alibaba as a way to find a manufacturer just skip over to the outreach section time stamped in the description box but another way to do research is by using good old directories one of the best ways to find a manufacturer is through free online supplier directories these directories contain hundreds if not thousands of manufacturers wholesalers and suppliers some popular domestic ones are thomasnet makers row mfg and compass some overseas directories are oberlo aliexpress india mart dhgate and sourcify conventions and trade shows and the last way to find a manufacturer is through conventions different industries will have a handful of go-to conventions so right now with kovid actually going is impossible but normally you would want to go in person and meet the right people until we get this covered mess sorted out check out the convention exhibitor list to start getting in touch with manufacturers online this actually ends up being more time efficient in the long run there are two schools of thought when it comes to how you should present yourself on the one hand you can introduce yourself as a small business introduce yourself as a business owner who is extremely passionate about getting up and running taking that approach leaves you a little bit more vulnerable to being taken advantage of but on the plus side you can also leave yourself open to allowing your manufacturer to be an amazing mentor and growing together the second school of thought is presenting yourself as a large business introduce yourself as a purchasing agent or a chief operations officer rather than the founder this makes your company appear established which gives you leverage in negotiations so when you're negotiating you could pass off blame and say oh sorry my boss didn't approve of those numbers this keeps your relationship with a manufacturer in good standing and they're less likely to take negotiations personally so now you know how to find a manufacturer from alibaba directories and conventions what i would recommend is securing two manufacturers establish an emergency vendor so that if your overseas manufacturer is late or they send you the wrong order you can always use your local manufacturer local might be more expensive but it's important to have a backup option even if it does eat into your profit margins just make sure that you know that they're locally manufacturing because if they're also getting their stuff from overseas then you might run into the same problem twice having a backup manufacturer also gives you leverage in negotiations shopify is offering a free 14-day trial all you have to do is click the link in the description box to take action so that you can level up your ecommerce business so you'll want at least three quotes once you have your manufacturers on your radar you're going to want to ask them these nine important questions so first of all can they accommodate your custom order do they have the resources do they have the skill level to produce what it is that you're looking for secondly what are their moqs so moq stands for minimum order quantity most manufacturers will only fill a certain order over a certain amount so depending on who you talk to this could be a thousand or it could be twenty thousand but you're going to want to make sure that you're negotiating these terms generally speaking it's better to start with less inventory that way you can test the market and you're not going to have to worry about storing or selling an unmanageable amount of products i would also recommend that you don't lead with this question okay don't lead with what are your moq's because this is a tell-tale sign of an amateur what are the lead times find out how long it will take to produce and to ship your items this is important because you don't want to work with a manufacturer that's going to take three months to produce and ship your products that's because long lead times leads to unhappy customers people don't want to have to wait for their order and they don't want to have to wait for products to restock how much does it cost to ship your items so if you're ordering from china for example manufacturers that are closer to the coast will have less expensive shipping costs for most shipping makes up a large portion of a businesses expenses so you want to know this right off the bat so that you can be clear on how it might affect your bottom line and how it will affect the cost of your product number five is what is the cost per unit so as you're negotiating the minimum order quantities you also want to simultaneously negotiate the cost per unit remember that the larger the order the lower the unit cost will be next can they grant you exclusivity if there's tooling involved and you pay for that tooling be sure that they aren't allowing other clients to use the equipment that you've paid for other forms of exclusivity include territorial market and total exclusivity you should also determine who owns the mold and other equipment should you need to switch manufacturers are there any setup fees involved if you're doing injection molding there will often be a setup fee so you want to make sure that you're asking this up front what is their defect policy find out what the terms are if you receive an incorrect or a defective shipment are you eating the cost of replacing the shipment or is the manufacturer accepting responsibility who should pay for the extra shipping and duties you want to make sure that you're getting a general sense of this to start and then once you get more detailed in the contract you can hash these details out is a manufacturer sustainable and ethical find out about the factory working conditions how old are the people working there do they get regular breaks what's your manufacturer's policy on discrimination in addition to your manufacturer being socially ethical you also want to know how they impact the environment how do they manage waste do they safely dispose of dirty water or are they just dumping it back into the ocean each industry will have a unique impact on the environment and humankind so make sure that you're doing your research and asking tons of questions the unfortunate truth is that large manufacturers sometimes see working with small businesses as a burden because they're so used to dealing with large orders of thousands and thousands of units manufacturers see working with small businesses as tedious time consuming and a low return on time investment it's important to keep that in mind so that when you're reaching out you're not discouraged when they turn you down keep in mind that if you're starting out with a smaller project there will be someone that's going to want to work with you you just have to find them once you collect your three quotes choose the best fit obviously don't use the most expensive option but also be cautious about going with the cheapest quote you get what you pay for so try going with the middle option here communicate your designs you've done your research you've found the manufacturer that you want to engage with and now it's time to get into the nitty-gritty about your design requirements start by asking your manufacturer if they can create your designs these people are smart well-equipped professionals that can often handle the design of your products as well communicate your ideas through sketches written instructions and reference photos if a manufacturer has done something similar to what you need you should also be referencing those in the case of the design aspect is beyond their capabilities you can visit fiverr.com or upwork to find freelance professionals search for industrial designers product designers and cad experts let them know that the deliverable you require is a 3d rendering of your product for my packaging design i went to a local 3d print shop and i worked with the designer there this was useful because he not only made me the 3d file that i could send to my manufacturer but he also did a 3d print this made me feel confident before going into production because i could see that the design and the dimensions were correct so you might want to consider doing this as well order samples before placing an order you're going to want to get your manufacturer to send you samples that way you can test the product before going into full production so there might be a bit of back and forth on this but once the sample comes out right you'll date and you'll sign the sample i recommend you keep two for you and send two back to them do this so that if they send you a batch and the color or the size isn't right you can both refer to the approved sample this is what's called a control sample i made the mistake of not doing this what happened with me is that my manufacturer sent me a shipment that wasn't what i wanted but it was still close enough the next batch again was similar but now even further away from our first approved sample by the time i got my fourth batch the colors and the dimensions were completely different from the approved sample and then before i knew it i was buying green packaging instead of blue what i should have done was issued a product approval waiver a waiver or conditional acceptance is an email or a document which communicates that there is a discrepancy with the order that should be fixed next time but it's still acceptable now it states what's wrong with the batch and also notes that if there's any further deviation the order will not be accepted this is a record of acknowledgement that the order wasn't what you wanted but it's still usable negotiation between the time that you get your sample and place your final order there's time to negotiate the terms here are some tips when it comes to negotiation so first of all have everything in writing having a record and contract eliminates any room for he said she said secondly make sure you put yourself in the other person's shoes when negotiating this will ensure that the deal is fair for both parties the point of your relationship isn't to see how much you can squeeze out of your partner but rather how do you mutually benefit a mutually beneficial business relationship is a long-term healthy choice place your order the final step is to place your order so here are a couple of tips to make sure that this goes smoothly at the beginning you're going to want to do a 100 quality control inspection what i mean by this is you're going to want to look at every single item that they ship to you to ensure that it meets your standards after you know them for about a year you can start relaxing the quality control at that point you're going to pick out say 50 from each box and if they're all good then you accept the order if there are one or two that are off then you're going to have to inspect the whole thing now if you have a huge order and there's a massive amount that are bad you're going to want to ship it back entirely so not to waste your time here's my final piece of advice and it might be the most important piece when you're starting out you might be thinking to yourself i don't really know what i'm doing should i be negotiating i'm confused i'm unsure but i want to tell you this you're going to make mistakes it's not a question of whether you will or won't it's guaranteed that you will make mistakes but the most important part is that you enjoy of course you want to keep your eyes open and you want to perform as best as you can but if we take a minute to enjoy what it is that we're actually involved in and be present for the journey we'll find that the opportunities and the success actually comes to us if you thought that this video was packed with tons of value make sure that you're giving it a thumbs up that's going to help our channel and the community grow thank you so much for watching i'm your host michelle bally and i will see you in the next one

Channel: Learn With Shopify

Views: 164,274

Keywords: learn with shopify, ecommerce tutorials, shopify store, ecommerce business, online business, how to make money on shopify, alibaba suppliers, how to find a supplier on alibaba, how to find a supplier, how to find a manufacturer, private label, how to find a supplier in china, how to negotiate with alibaba suppliers, side hustles 2021, how to find a supplier for amazon fba, online business essentials, dropshipping suppliers, how to find a supplier for your product, amazon fba

Id: L05VyO_q7CU

Length: 15min 55sec (955 seconds)

Published: Tue Feb 16 2021