Manufacturer Sourcing: Sourcing reliable, cost-competitive manufacturers to support your company’s supply chain can be an incredibly important and challenging task. How do you go about sourcing to reduce your overall costs? How do you assure consistent quality with the manufacturers you’ve sourced?
Leverage our experience and ability to locate, qualify, and manage manufacturers that are appropriate for your product and company. Our sourcing methodology takes risk out of the sourcing process by employing cutting-edge best practices. Receive manufacturing quotations, analyses, and product samples from manufacturers before you make critical factory sourcing decisions. We visit every factory that we work with to ensure that your company and product are on track for successful manufacturing.
Retailers often work with multiple manufacturers at once to create an inventory for their store.
How to Find a Manufacturer or Supplier for Your Product Idea?
If you’ve been thinking about starting a business, you may have brainstormed some ideas of your own, like capitalizing on one of the many in-demand products already on the market.
However, many entrepreneurs find themselves hitting a brick wall when it comes time to actually source products. Whether you plan on manufacturing something of your own or finding suppliers to purchase from wholesale, good products aren’t always easy to find.
In this post, we’ll look at the basics of sourcing a supplier for your next project. We’ll give you ideas for some places to search, and examine how you should approach suppliers and what to ask them when developing a product for your ecommerce business.
Is A Manufacturer A Supplier?
Suppliers and manufacturers are pretty much synonyms. For the purpose of this post, when we refer to suppliers, we’re referring to anyone who has the capability to provide you with products and inventory. This encompasses manufacturers, wholesalers, and distributors.
There are a ton of helpful resources online that you can find through Google. But before you begin, there are a few things you need to know and decide.
First, you should figure out what type of supplier you’re looking for. This will help determine the terminology you need to use in your research. Check out our post on ecommerce business models to help you get started. There are several supplier options, the most common being:
- A manufacturer who produces your own product idea
- A supplier (who may also be a manufacturer), wholesaler, or distributor who purchases already-existing brands and products
- A dropshipper who supplies products and fulfills orders of already-existing brands and products
Domestic Vs. Overseas Suppliers
If you plan to manufacture or wholesale, when looking for suppliers you’ll need to decide whether you want to source domestically or from overseas. Overseas can refer to any location abroad.
It’s a good idea to secure two manufacturers: one domestic and one overseas. Your local manufacturer can be used as a backup. So, if orders from overseas are late or incorrect, you can fall back on your local supplier. They are often more expensive, but it’s better to keep products stocked and customers happy than having them wait for overseas shipments.
It’s often cheaper to source your products overseas, especially in Asian countries, like China, India, and Taiwan because of lower labor costs. But there’s a lot more to the decision than just the upfront investment and cost per unit.
Both domestic and overseas sourcing have their advantages and disadvantages.
Higher manufacturing quality and labor standards
Easier communication with no language barrier
Marketing appeal of being made in North America
Easier to verify reputable manufacturers
Faster shipping time
High intellectual property right protection
Greater payment security and recourse
Higher manufacturing costs
Less product choice (there are many items that just aren’t made in North America anymore)
Lower manufacturing costs
High number of manufacturers to choose from
One-stop services like Alibaba have made it easy to navigate suppliers
Lower perceived quality from customers
(Usually) lower manufacturing and labor standards
Little intellectual property protection
Language, communication, and time-zone barriers can be difficult to navigate
Difficult/costly to verify manufacturer and visit on-site
Longer shipping time
Cultural differences in business practices
Product importation and customs clearance
- Less payment security and recourse
When working with overseas manufacturers and suppliers, it’s a good idea to hire a manufacturing manager. These contractors are locals who live near your manufacturers and handle negotiations, orders, and managing your partners. They can also be the in between for your business and freight companies. Think of them as the central hub for your overseas supply chain.
If there’s an issue, the manager will work directly with the manufacturer to solve it. Managers also speak the local language, which helps improve communication and make production smooth for your business.