You've had a brainstorm for a new product. You've done your due diligence. You've got your startup business formed, hired a designer to make a prototype, registered a patent, have financing lined up, and now you just need to get it manufactured.
Well, that's sometimes easier said than done. How to source the right manufacturer who can produce or provide your product with the requisite quality at a reasonable pricing can take a bit of time and effort. So, here's some help to get your assembly line started, and turn your product idea into a marketable one.
What Is a Manufacturer?
A manufacturer can be a person but more often a company that produces finished goods from raw materials. Using different manufacturing tools, equipment, and manufacturing processes, the manufacturer sells the goods to consumers, wholesalers, distributors, retailers or other manufacturers to produce = more complex goods.
A manufacturer most often makes a certain type of product, such as ceramic coffee mugs. Retailers usually work with a variety of manufacturers as part of a supply chain to get inventory for their stores.
Types of Manufacturers
Manufacturers can be suppliers, but not all suppliers are manufacturers. But for the purposes of this article, we'll mix the two together to increase your chances of finding who you need to make or provide your product. A manufacturer could be a:
- Factory: This is typically what people mean when they think of manufacturing — a building or group of buildings where goods are manufactured or assembled, usually by machinery.
- Wholesaler: While wholesalers don't manufacture products, they do buy and sell them in bulk. So if you want a pre-existing product ordered in bulk from a local wholesaler, you can get quick delivery. However, the price per unit will be more than having it made in a factory, and it won't help you if you want to make something completely original.
- Trading company: Trading companies are like wholesalers but deal in smaller quantities of goods but with a wider variety. But again, they act as middlemen between the buyer and the actual manufacturer, driving up costs. These companies also try to dodge responsibility if any of their items have manufacturing defects.
Domestic vs. Overseas Manufacturing
When dealing with manufacturers, you will be faced with a decision of sourcing your supplier domestically or overseas. While there are certain practical considerations to take into account, there's also an emotional one. "Made in the U.S." is an increasingly important factor in many people's buying habits in this country. Depending on what you're selling and where you're selling it, domestic manufacture could be an important selling point.
Generally speaking, businesses look for overseas manufacturers in Asian countries, such as China, Taiwan, or India, or in other international locales, including Latin America, Africa and Eastern Europe, to get cheaper costs and a large selection of potential suppliers.
People often get goods made in the U.S. because they are looking for high-quality products, easier shipping, lower shipping costs, and sometimes greater security when it comes to payments and intellectual property. More importantly, you don't have to work across language barriers or deal with a lot of time zones. Because the manufacturers are domestic, it's also easier to arrange on-site visits, to verify the qualifications of the supplier, and to ensure acceptable labor, ethical, and environmental standards are in place.
It is simpler, as well, to order smaller batches of goods from North American manufacturers than overseas, where typically a large minimum order quantity is required.
Preparing for Manufacturing
Before you decide how to find a manufacturing company for your product in the U.S., turning your business idea into concrete reality, you usually need to take care of:
- Market research: There's no point making something if people aren't going to buy it. Do research to find out if your product meets a real need and offers advantages over competitors.
- Licensing: Do you actually want to produce the product yourself or license the rights for someone with the means to do it for you? They handle the manufacturing, marketing, distribution, and then you will pay royalties based on sales.
- Creating a prototype: You would go through the process of designing and building a prototype to ensure that the product could be made to your specifications in a factory. An actual prototype is also a good, concrete selling point if you are looking for investors or financing.
- Protecting intellectual property: To protect your intellectual property you might want to register for a patent, copyright your work or register a trademark.
How to Find a U.S. Manufacturer for Your Product
Whether you go to online listings of suppliers, use Google, work by referrals or search by NAICS codes, you have a variety of ways to source a manufacturer, wholesaler or trade company that can produce or provide your finished product.
Online Directories for Manufacturers
A fast and easy way to find domestic manufacturers for your product is through online manufacturer directories. Typically, they contain hundreds or thousands of listings for manufacturing suppliers (at least one boasts more than 500,000 industrial suppliers). Some of these are domestic only, and others include international suppliers as well. The manufacturers cited have usually been vetted and reviewed. They include:
Search Engines
Most things can be found through a major search engine such as Google. However, beware that many manufacturers haven't kept up to date when it comes to websites that embrace search engine optimization (SEO) practices to get high page rankings. So, you may need to search further down in the results to find what you want, or use various search phrases, such as "manufacturer," "supplier" or "factory," in conjunction with the name of your product or its source materials.
NAICS Code
Another way to source potential manufacturers for your product in the U.S. is to refer to the NAICS (North American Industry Classification System) directory. This federal standard for business classification collects, analyzes and posts statistical data related to the U.S. business economy. Through the NAICS code of a similar product you may be able to find its manufacturer, who might be able to handle your order. The quality of the product they already made would be a good indication of their usefulness to you.
Referrals
Sometimes a recommendation is the best way to find potential partners for your product development. Reach out to your professional network to see if they can give you referrals or at least point you in the right direction.
Social media may be another good source for this. Ecommerce business owner groups on platforms such as Facebook and LinkedIn may provide recommendations for you after you post a query. If you find a manufacturing partner that can't supply what you need, don't be shy. Ask them if they can suggest another supplier to handle the job. You might be surprised by the professional camaraderie among manufacturers.
Let Skynova Help You Run Your Small Business
While you are caught up in the excitement of getting your product into production and onto the market — and ringing up huge sales — don't forget about the basics of running a business and getting paid in a timely manner.
Skynova is a friend to small businesses like yours. Our invoicing and accounting products make it easy to keep track of your financial picture, and to prepare and send out professionally branded invoices, estimates, purchase orders, bills of sales and more to keep your business running and cash flowing in the right direction.
Skynova will help keep the assembly line for your new business up and running.
Notice to the Reader
The content within this article is a general guide and may not apply to your specific situation. Always consult with the appropriate legal, accounting and business consulting professionals to ensure you're meeting standards for the business you are trying to launch and run.