Are you excited about a new product concept but don’t know how to make it a reality? Find a manufacturer and learn how to make your idea a reality. Entrepreneurs often hit a wall when it comes to sourcing products. Whether you’re trying to manufacture your own products or find a supplier to buy wholesale, finding a good product isn’t always easy.

The process of finding a supplier for your project involves finding a manufacturer, deciding whether it is better to work with a domestic or overseas manufacturer, and assessing whether the manufacturer is trustworthy. There are also questions you should ask your supplier when developing a product for your e-commerce business.

What is a manufacturer?

A manufacturer is any business that uses raw materials to produce finished goods. They sell their products to consumers, wholesalers, distributors, retailers, and other manufacturers who want to make more complex products. Manufacturers typically focus on one type of product. For example, you might work with a glass manufacturer that makes glass bottles. Or you might work with a manufacturer that makes paper boxes and another manufacturer that makes plastics or natural products.

Retailers often work with multiple manufacturers simultaneously to stock their stores.

Is the manufacturer a supplier?

A supplier is anyone who can provide you with products and inventory, including manufacturers, wholesalers, and distributors. There are many useful online resources that you can find through Google, but there are a few things you need to know and decide before you get started.

Depending on your ecommerce business model, you need to figure out what type of supplier you are looking for. This will help you decide what terminology to use when doing your research. There are several supplier options, the most common of which are:

• Manufacturer that produces product ideas
• A supplier (possibly a manufacturer), wholesaler, or distributor who purchases existing brands and products.
• Dropshipping company that supplies existing brands and products and fulfills orders

Domestic suppliers Overseas suppliers

If you are planning to manufacture or wholesale, you will need to decide whether to source domestically or internationally when looking for suppliers. It is a good idea to have two manufacturers, one domestic and one international. The domestic manufacturer can serve as a backup. If there are delays or errors in international orders, you can resolve the issue with the domestic supplier. Domestic suppliers are often more expensive, but they can be a better option than holding product in stock and waiting for delayed shipments to satisfy your customers.

It is often cheaper to source products overseas, especially in Asian countries such as India, China, and Vietnam, which are ranked as the lowest cost countries for manufacturing, according to U.S. News & World Report .

How to find a manufacturer in 6 steps

Manufacturers can help you turn your product ideas into reality. Follow these six steps to find the best manufacturers and suppliers and run your business successfully.

1. Explore your options

Finding the right manufacturer is key to success. The manufacturer can play a significant role in determining the cost, quality, packaging, and delivery of your product. Take advantage of tools to help you find a supplier:

Google

Do a Google search for "manufacturers near me." Check out their websites, customer reviews, and product expertise.

Many supplier websites are outdated, lacking information, and poorly optimized for search engines. This means that you may need to use a variety of search terms to find what you want. For example, words like “wholesale,” “supplier,” and “distributor” are often used interchangeably, so it’s a good idea to search with all of these terms.

Learning Google's advanced search features can help you improve the quality of your search results.

suggestion

One of the best ways to find the best suppliers is to ask for recommendations. Ask your professional network for supplier recommendations or ask if they know anyone who is involved. Find people who are successful in the field you are interested in pursuing and see if they are willing to share their contact information. Join Facebook groups or other online e-commerce communities to check for helpful reviews.

Even if a supplier isn't a perfect fit for you, ask them if they can point you in the right direction. If they're in the same industry, they'll likely have other contacts who might be a better fit.

NAICS Code

Another way to find a product supplier is to search for the product's code in the North American Industry Classification System ( NAICS ).

NAICS classifies manufacturers and products by code, making some manufacturers and suppliers easier to find in professional directories. Use the NAICS code link for the United States and the NAICS code link for Canada.

You need to evaluate potential manufacturers. Once you have narrowed it down to a few possibilities, do some additional research to make sure they are trustworthy. Check the Better Business Bureau (BBB) ​​to see if there have been any complaints, and check out the manufacturer’s customer reviews.

Alibaba

Alibaba connects you with manufacturers in China. It’s a popular marketplace for finding existing products, but you can also connect with manufacturers who will create custom products through Alibaba. Search for the product you want and browse through a variety of suppliers and manufacturers.

Buying safely on Alibaba is easy. The marketplace allows you to evaluate manufacturers in advance, helping you get the best products at a fair price. When researching manufacturers on Alibaba, make sure they meet the following qualifications:

• Gold Supplier : A supplier who pays for Alibaba membership.
• Verified : This means that a third-party evaluation service company or Alibaba has visited and verified their manufacturing facility.
• Trade Assurance : A free service that protects your order from payment to delivery.

You can apply filters as you continue your search. Sort by certifications (e.g. SA8000, which ensures a humane working environment) to find manufacturers that align with your business values.

You can also check to see if the manufacturer is not a trading company. A trading company is merely an intermediary and cannot manufacture the products themselves.

Directories

Another place to research manufacturers is through online supplier directories. These directories serve as manufacturer catalogs, containing profiles of thousands of manufacturers, wholesalers, and suppliers. Some of the most popular directories for domestic and international suppliers include:

Online domestic directory

• ThomasNet
• Maker's Row
• MFG
• Kompass
• Council of Manufacturing Associations Member Organizations

Online Overseas Directory

• AliExpress
• Indiamart
• Sourcify
• Global Sourcing Specialists
• Dun & Bradstreet

2. Information collection and contact

After you have selected a few manufacturers, get quotes and compare them. It is recommended that you get quotes from at least three manufacturers to compare your options. For domestic manufacturers, you may want to request a tour of their facilities or visit their offices.

In addition to pricing information, you need answers to questions like:

• Is customization possible? Evaluate whether the supplier or equipment manufacturer can produce the product you want. Make sure they have the necessary skills and resources and have automation capabilities.
• How long is the lead time? Find out how long it takes to produce and ship your product. It is important to work with a manufacturer that can ship quickly, so that your customers do not have to wait a long time when the product is out of stock.
• How much does shipping cost? Shipping costs are a major expense for small businesses. Find out what your manufacturer’s shipping costs are and evaluate how they affect your cost structure.
• What is the minimum order quantity (MOQ)? Do not start the conversation with this question, as it may cause the manufacturer to lose interest in working with you. However, you need to know the minimum quantity you need to order before you start production. This quantity is often negotiable.
• How much is the cost per unit? While negotiating the MOQ, negotiate the cost per unit as well. The larger the order quantity, the lower the cost per unit.
• Can you grant exclusivity? If tooling is involved (e.g., you buy tools to manufacture your product), you must ensure that others do not use them. You can also request exclusivity on a regional, market, or full-scale basis. Some service providers may offer their own branded products.
• Are there any setup costs? Sometimes manufacturers may charge additional costs to prepare equipment for production.
• What is the defect policy? Find out who is responsible for paying for defective or faulty products. It is also important to find out who is responsible for shipping and customs.
• Is the manufacturer sustainable and ethical? Investigate factory conditions and understand the impact on the environment and workers. This can be an important factor in corporate social responsibility and brand image.

Minimum Order Quantity (MOQ) Negotiation

If you are looking for a supplier for the first time, you will soon learn about MOQs. Depending on the product and manufacturer, it is common for them to require you to purchase hundreds or thousands of units for your first order.

MOQs can be a challenge if you have limited funds or want to start small and test the market. Fortunately, MOQs are almost always negotiable.

Before entering into negotiations, it is important to understand why the supplier has set a minimum quantity. Is it because they need a lot of upfront work? Or is it because they prefer to work with larger buyers? Understanding the reasons for the minimum quantity will help you better understand the supplier’s position and allow you to negotiate the best counteroffer based on that.

Discuss payment terms

Many suppliers require that the entire order cost be paid up front for new business. This is important because inventory is a major cost in an e-commerce business. It is also a good idea to ask if they offer payment terms for future orders.

Suppliers often receive emails requesting quotes from untrustworthy buyers, so it is not uncommon for them to ignore the requests. Lack of response from suppliers is a common complaint among new e-commerce entrepreneurs.

So how do you avoid being ignored? Here are a few things to do when you first contact a supplier:

• Write a clear email. The first email you send to a manufacturer should be clear and concise. Avoid too much story or background. The first email should focus on assessing the potential fit with the supplier at a high level. Focus on the details that are most important to the supplier, i.e. what you are trying to source.
• Ask for what you need. Asking for prices isn't always easy for suppliers. It's important to ask for prices for a variety of quantities, but don't ask for too many requests or quotes. Ask only for what you absolutely need to assess the fit with the supplier.
• Be prepared. If you are not sure about your request, consider calling the supplier or sending an email with only one question. For example, if you want to know the minimum order quantity of the supplier in advance, you may not get a response if you ask for a quote for a quantity that is significantly less than their minimum order quantity.

A good manufacturer will be open to negotiating payment terms. One payment strategy they may suggest is to pay 50% upfront, with the remaining 50% paid upon delivery. This places responsibility for the order on both sides, without leaving too much risk on either side.

Communication with manufacturers and suppliers

When you start an online business, you probably won’t have a manufacturing manager. You’ll need to communicate directly with your suppliers, and you can do this by phone, email, or text message. If you work with a local manufacturer, you can also meet in person.

Look for a company that is responsive and eager to work with you. If they are slow to respond to emails or delay in sending out samples, you may want to avoid giving them your business.