Finding the right products for your business can be challenging, whether you’re planning to manufacture your own or to source from wholesale suppliers. A good product isn’t always easy to identify, but with the right approach, you can find the perfect manufacturing partner for your ecommerce venture.
This guide will walk you through finding a manufacturer or supplier for your product, including tips on evaluating manufacturers, deciding between domestic and overseas options, and asking the right questions about supply chains. Let’s get started on sourcing the best products for your ecommerce business.
What is a manufacturer?
A manufacturer is a business that transforms raw materials into finished goods. Manufacturers sell these goods to consumers, wholesalers, distributors, retailers, or other manufacturers, creating more complex products.
Most manufacturers specialize in a specific type of product. For example, you might work with:
- A glassware manufacturer for bottles and jars
- A cardboard box manufacturer for packaging
- A plastic goods manufacturer for containers
Many retailers work with multiple manufacturers to build a diverse inventory for their store. This approach, known as supplier diversity, can help you create a unique product mix and reduce supply chain risks.
Is a manufacturer a supplier?
While all manufacturers are suppliers, not all suppliers are manufacturers. “Supplier” is a broader term that includes anyone who can provide you with products and inventory. This category encompasses manufacturers, wholesalers, and distributors.
Before you start your search, it’s important to determine what type of supplier you need. Your choice may depend on your ecommerce business model. Understanding this will help you use the right terminology in your research.
Common supplier options include:
- Manufacturers that produce your unique product idea
- Suppliers (who may also be manufacturers), wholesalers, or distributors that offer existing brands and products
- Dropshipping companies that supply products and fulfill orders for existing brands
Domestic vs. overseas manufacturing
When planning to manufacture or wholesale products, you’ll need to decide whether to source domestically or from abroad. Each option has its pros and cons, so it’s worth considering both.
A smart strategy is to secure two manufacturers: one domestic and one foreign. Here’s why:
- Your local manufacturer can serve as a backup.
- If international orders are delayed or incorrect, you can rely on your local supplier.
- While domestic suppliers are often more expensive, keeping products in stock and customers happy is worth the investment.
Overseas manufacturing, particularly in countries like India, China, and Vietnam, often offers lower costs. According to U.S. News & World Report, these three countries ranked as having the cheapest overseas manufacturing costs. However, consider factors beyond just price when making your decision.
How to find a manufacturer in 6 steps
Ready to turn your product ideas into reality? Follow these six steps to find the best manufacturers and suppliers for your business.
- Research your options
- Conduct outreach and collect information
- Communicate your designs
- Order samples and compare suppliers
- Negotiate with potential manufacturers
- Place your order
1. Research your options
Finding the right manufacturer is crucial for your success. They influence your product’s cost, quality, packaging, and shipping. Here are some tools to help you in your search:
Google: Start with a simple Google search for “manufacturers near me” to find local options. Review their websites, customer reviews, and product specialties.
Pro tip: Many suppliers’ websites may be outdated or lack robust information. Try various search terms like “wholesale,” “supplier,” and “distributor” to broaden your results. Familiarize yourself with Google’s advanced search features to refine your search.
Referrals: Some of the best leads come from your network. Don’t hesitate to:
- Ask your professional contacts for supplier recommendations
- Reach out to successful entrepreneurs in your field for advice
- Join Facebook groups and online ecommerce communities for reviews and suggestions
Even if a supplier isn’t the right fit, they might point you in the right direction. Industry insiders often have valuable contacts that could be perfect for your needs.
NAICS codes: The North American Industry Classification System (NAICS) classifies manufacturers and products with specific codes. This system can help you find suppliers more easily, especially in professional directories. Check out the NAICS codes for the United States and Canada to streamline your search.
Once you’ve narrowed down your options, vet potential manufacturers thoroughly. Check the Better Business Bureau (BBB) for any complaints and browse customer reviews to ensure credibility.
Alibaba: Alibaba is a popular marketplace connecting you with manufacturers, primarily from China. You can use Alibaba to find existing products or connect with manufacturers for custom creations.
When researching manufacturers on Alibaba, look for these qualifications:
- Gold supplier status (they pay for Alibaba membership)
- Verified status (a third-party evaluation services company or Alibaba has visited their facility)
- Trade assurance (free service protecting your orders from payment to delivery)
Use filters to sort by certifications (like SA8000 for humane working conditions) to find manufacturers aligned with your business values. Also, ensure you’re dealing directly with manufacturers, not trading companies acting as middlemen.
“What I ideally wanted was to deal with a manufacturer and not a trading company since I didn’t want to pay extra to deal with a middleman,” says entrepreneur Corey Ferreira on his experience shortlisting glasses manufacturers on Alibaba.
“I wanted to work with a supplier that was at least five years active. Any business that was around on eyear seemed like a risk to me. There are of course always exceptions to this but I wanted to be safe.”
Manufacturing directories: Online supplier directories are another valuable resource. These catalogs contain profiles for thousands of manufacturers, wholesalers, and suppliers. Here are some popular options:
Online domestic directories:
Online overseas directories:
- AliExpress (Check out our ultimate guide on AliExpress)
- Indiamart
- Sourcify
- Global Sourcing Specialists
- Dun & Bradstreet
2. Conduct outreach and collect information
After identifying potential manufacturers, it’s time to gather quotes. Aim to get at least three quotes to compare your options. For local manufacturers, consider arranging a facilities tour or office visit to get a firsthand look at their operations.
Beyond pricing, here are key questions to ask:
- Can they handle custom orders? Assess whether they have the skills, resources, and automation features to create your specific product.
- What are their lead times? Ensure they can deliver products quickly enough to keep your customers happy and your inventory stocked.
- What are the shipping costs? Shipping is a significant expense for small businesses. Understanding shipping costs helps you determine their impact on your bottom line.
- What are their minimum order quantities (MOQs)? While it’s best not to lead with this question, you’ll need to know the minimum number of items required for production. Remember, this is often negotiable.
- What’s the cost per unit? Negotiate this alongside MOQs. Generally, larger orders can lead to lower per-unit costs.
- Can they offer exclusivity? If you’re investing in tooling, ensure they won’t allow others to use it. You might also explore territorial, market, or total exclusivity options, or even private label goods.
- Are there setup fees? Some manufacturers charge fees to prepare equipment for your production run.
- What’s their defect policy? Clarify who covers the cost for incorrect or defective items, including shipping and duties.
- Is the manufacturer sustainable and ethical? Inquire about factory conditions and their impact on workers and the environment.
Negotiating minimum order quantities: As a first-time buyer, you’ll quickly become familiar with “minimum order quantity.” Manufacturers often require commitments to purchase hundreds or even thousands of units for initial orders. MOQs are almost always negotiable.
To negotiate effectively:
- Understand the reason behind the supplier’s minimum. Is it due to upfront work? Do they prefer larger buyers?
- Use this understanding to propose a compelling counter-offer.
Discussing payment terms: Many suppliers require new businesses to pay for full orders upfront. This is crucial to know, as inventory is a major cost for ecommerce businesses. Ask about payment terms for future orders as well.
Getting responses from suppliers: Suppliers often receive numerous quote requests, which can lead to slow responses or even ignored emails. Do the following to increase your chances of a response:
- Keep emails focused: Your first email should be clear and concise, assessing potential fit at a high level. Focus on what suppliers care about most, like sourcing details.
- Ask for what you need: While it’s important to ask about pricing for multiple quantities, avoid overwhelming suppliers with too many questions. Stick to essential information.
- Prepare: If you’re unsure about your request, consider a quick phone call or a single-question email to clarify before sending a full inquiry.
Many reputable manufacturers are open to negotiating payment terms. One strategy to consider is proposing a 50/50 split: 50% upfront and 50% after receiving the shipment. This approach balances risk for both parties.
Communicating with manufacturers and suppliers: When starting your online business, you’ll likely handle manufacturer communication yourself. You can do this via phone, email, or text. For local manufacturers, you can also arrange in-person meetings.
Look for trading companies that are responsive and eager to work with you. If a potential partner is slow to respond or send samples, they may not be the best fit for your business.
3. Communicate your designs
After initial discussions with potential manufacturers, it’s time to share your product design. While some manufacturers offer product development services with prototyping and 3D modeling, they can be costly. Consider these alternative ways to communicate your ideas:
- Sketches
- Written instructions
- Reference photos
If your chosen manufacturer doesn’t offer design services, you can find freelancers on platforms like Fiverr or Upwork to create professional drawings. Look for:
- Industrustial designers
- Product designers
- Computer-aided design (CAD) experts
Another option is to work with a local designer to develop prototypes and custom molds. This approach could be more cost-effective than going through a manufacturer.
4. Order samples and compare suppliers
Before moving to full production, always get product samples to test. Once you’re satisfied with a sample:
- Date and sign it
- Keep one or two for yourself as control samples
These control samples serve as a quality assurance tool and help maintain consistency in your products. For example, if you receive a shipment with incorrect colors, you can reference the control sample to show the discrepancy.
5. Negotiate with potential manufacturers
Even after receiving samples, there’s still room to negotiate terms on payment or MOQ. When negotiating:
- Consider the manufacturer’s perspective
- Aim for a win-win situation where both parties profit
- Focus on building a long-term, healthy supplier relationship
Remember, the goal isn’t to exploit your manufacturing partner for the lowest price, but to create a mutually beneficial partnership.
6. Place your order
Once you’ve completed quality control checks and ensured every product meets your standards, you’re ready to place your order and kickstart the production process.
Evaluating cost vs. quality
The impact of material quality on pricing
Higher quality materials often come with additional fees. For example, switching from cotton for cashmere when manufacturing apparel will increase costs. While premium materials can boost a product’s perceived value, there’s a short-term trade-off:
- Higher upfront investment in inventory
- Longer wait to recoup costs through sales
Balancing cost savings with product durability
Consider the following when deciding between durable and less durable products:
- Non-durable products may impact customer satisfaction but can lead to repeat business
- Durable products last longer and can command premium prices, but are more expensive to source
Conduct market research to determine how important product durability is to your target audience. For example:
- Budget-conscious customers might prefer a $5 umbrella that lasts one season
- High-income clients may invest in premium, long-lasting items
Identifying hidden costs in manufacturing
The initial quote from your supplier isn’t always the final figure. Be aware of potential additional costs, especially when working with overseas manufacturing partners or wholesale suppliers, including:
- International shipping, including customs duties and tariffs
- Currency exchange rates
- Third-party quality control or inspection checks
- Rework and defect costs if the original sample isn’t up to standard
- Tooling expenses for custom molds or machines
Moving forward with your supply partners
Sourcing suppliers and manufacturers is one of the biggest costs of starting a business. Finding partners that are a good fit and that meet quality control standards is crucial for your new venture, even though it can be challenging.
Don’t get discouraged if you hit roadblocks along the way. In most cases, finding the perfect partner just requires a little more patience and perseverance. Keep at it, and you’ll find the right match for your business.
Illustration by Pete Ryan
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How to find a manufacturer FAQ
What does manufacturing mean?
Manufacturing is the process of transforming raw materials into finished products using tools, labor, and machinery. It’s an industrial process that enables mass production of goods through advanced technologies and assembly processes.
What are the types of manufacturing?
Common types of manufacturing include:
- 3D printing
- Repetitive manufacturing
- Discrete manufacturing
- Job shop manufacturing
- Continuous process
- Batch process
What is an example of manufacturing?
The clothing industry is a great example of various manufacturing processes. A typical clothing manufacturer’s process might include:
- Fabric receiving and relaxing
- Form layout
- Laying
- Marking
- Cutting
- Screen printing
- Sewing
- Quality checks
All these steps contribute to creating a single garment.
How do I find a manufacturer?
You can find manufacturers via various channels, including:
- Alibaba
- Free online directories
- Google searches
- Referrals from industry contacts
- NAICS codes
How do I reach out to a manufacturer?
Once you’ve shortlisted potential manufacturers, reach out via email. Some suppliers also offer online contact forms to request more information about their manufacturing process. Keep your initial communication clear, concise, and focused on your specific needs.
How do I determine if a manufacturer is reputable?
- Check for spelling errors on their website and communications.
- Verify that the business is properly registered.
- Confirm their registered address.
- Find and verify their contact number.
- Ask for references from current or past clients.
- Look for online reviews and testimonials.
- Check their presence on social media platforms.
