Developing an idea for a product is meaningless if you can't adequately produce it. Properly manufacturing your product requires an understanding of the design, materials and budget.
For most businesses trying to turn ideas and prototypes into a tangible product, you'll need the help of a manufacturing facility, especially if you're trying to produce in bulk. Here's what you need to consider as you search for a factory to produce your product.
Preparing for manufacturing
Before you hire a factory and start producing your product, you need to take care of a few beginning steps.
- Market research. Avoid manufacturing the product if customers aren't willing to buy it. Look at competitors in the industry and understand how your product provides additional value to your customers. If you're creating a worse version of a competitor's product, you're unlikely to be successful.
- Licensing. The next step is to decide whether you want to produce and sell the product yourself or license the idea to a company with the means and experience to handle it. Licensing is sort of like renting your idea. The company handles everything – the manufacturing, marketing, distribution – and then pays you royalties based on sales. No upfront investment is required. Many large corporations license ideas, as do designated licensing companies. For more information about licensing, read this article.
- Build and test a prototype. If you go the solo route, you'll need a sample or prototype to make sure the product can be made to your specifications in a factory. Opinions from experts vary on how to go about this. You can make your own, if possible. This step may take several iterations and many, many months to complete. Learn more about producing a product and testing it here.
- Protect intellectual property. You might also want to protect your intellectual property. You can register for a patent, copyright your work or buy a trademark.
Your job will be easier if you check those boxes before seeking a factory. Once you find answers to those questions, you're ready to bring your product to life.
U.S. factories versus overseas factories
There's no right answer on whether it's better to manufacture in the U.S. or overseas. The decision comes down to personal preference, budget, the type of product and your patience.
Both U.S. and overseas options come with logistical challenges, said Edward Hertzman, founder of Sourcing Journal. Due to globalization and an American factory base that's diminished in the past few decades, it's not always possible to find a U.S. factory that can make the type of product you want, he said.
If your product can be made in the U.S., you should consider that some audiences respond better to products made wholly in the U.S. Another advantage of American factories is that they let you order small batches of a product, whereas overseas factories tend to require large orders, said Tanya Menendez, co-founder and former CMO of Maker's Row and current co-founder of Snowball.
It's also worth considering the facility's proximity to your business. Checking in at your manufacturing plant isn't much of an issue when it's within 100 to 200 miles, but if your plant is on the other side of the world, logistics can prove difficult. This can cause problems if the quality of your good isn't produced to your standards.
"If you have manufacturers outside of the U.S., quality control is definitely something you want to keep an eye on," said Sabrina Hartel, creative director and CEO of Sabrina Hartel Home. "I have known entrepreneurs who had manufacturing facilities in China and quality control was a constant issue. It's very expensive to visit China every few weeks."
Research comes first when deciding whether to manufacture in the U.S. or abroad. Look at your customer base and find out if manufacturing exclusively in the U.S. matters to them. You'll also want to research the price and quality of the goods produced at different manufacturing plants that you're considering using. By conducting extensive research, you'll reduce the chances of getting blindsided by a factory that overpromises and underdelivers.
Resources for finding a factory
Once you're ready to hire a factory, start with these online sources to find a good match for your product.
- Maker's Row. If you're looking to hire a factory in the U.S., you may want to investigate Marker's Row. Menendez and her business partner launched Maker's Row in 2012 after realizing how difficult it was for clothing makers to find American factories. This service connects you with state-side manufacturers. You can also pay for one-on-one guidance through the manufacturing process.
- Global Sourcing Specialists (GSS). This website can match you with an ideal factory or manufacturer from anywhere in the world. GSS works with startups that need mass production or smaller-scaled manufacturing. This is a great resource if you want to hire a factory overseas.
- Alibaba. Alibaba is another excellent resource if you're looking for factories outside the U.S. You can navigate through the website by industry to find a match that's best for your business.
- MFG.com. You can use this resource to not only find a factory anywhere in the world, but also to track the progress of your projects, make lists of parts to use with CAD files and more.
What to look for in a factory
According to the experts we interviewed, when choosing a factory to partner with, you should look for the following attributes:
- Demonstration of knowledge and experience. You want a factory that answers all your questions and guides you through the process. If you're making a food product, can the factory recommend a good food chemist? For clothing, can it offer advice on the sourcing of materials?
- Technical capabilities. The factory should already be producing goods or products that are very similar to your own. This ensures that they understand your market and what it takes to succeed.
- Reputation. Does the factory do work for major brands or retailers? Does it have any sort of regulatory fines or infractions? If it's overseas, what are its labor policies, and how high is the turnover rate? It's paramount to find a factory you can trust.
Marco Perry, founder of strategy, design and engineering firm Pensa, advised looking for a factory that not only has the tools you need, but also operates as a partner to help you make a great product.
"More often than not, the factory is going to assist in many other aspects of production than just making and assembling parts," said Perry, who has more than 20 years of experience as an inventor. "For that reason, as much as possible, you should look for a factory that makes products in the same category. General-purpose factories are not as knowledgeable in the nuances of what makes a product great."
Questions to ask a potential partner
Because so much can go wrong, the vetting process is crucial when you're choosing a factory. Here are some important questions to ask:
- What kind of experience do you have in this industry?
- Who are the clients you're currently working for?
- What is the turnaround time to produce my product?
- What are your minimum order requirements?
- Can you provide recent proof of inspections or third-party audits?
- Do you subcontract work to other factories, or is all the work done in-house?
- What are my payment options? Is a deposit required?
- Do you make materials in-house or outsource?
- Can you handle the sourcing of materials, or do I need to provide my own?
With as much value as you place on your products, it's vital that you find a good manufacturing facility. Doing your research and vetting potential manufacturers to find the facility that's right for you leads to a better finished product.
Additional reporting by Jill Bowers and Ashley Smith. Some source interviews were conducted for a previous version of this article.