How to find the right manufacturer for your business: Key factors to consider

Choosing or designing the right product is just the first part of building a business. Once you have your big idea, you need to find a manufacturer or supplier to help make it a reality so you can eventually hold that product in your hands and scale production to reach more customers.

What are the different types of manufacturing?

If you’re wondering how to find a manufacturer for your product, you’ll first need to know which type of manufacturer to reach out to. Let's break down the different types of manufacturers your company can choose from:

Manufacturers

Factories that produce products from raw materials. Different types of manufacturing include:

• Discrete manufacturing: Offering the automation and efficiency of assembly line production with flexibility for variations in product size, style, and configuration. Examples: cars or medical devices.

• Process manufacturing: Combining raw materials — such as by boiling or blending — to produce bulk quantities of a final product. Examples: food or pharmaceuticals.

• Repetitive manufacturing: Providing the speed and reliability of assembly lines with little changeover and variation. Examples: clothing or tech devices.

Non-manufacturer suppliers: Alternatives to consider for your business

There are suppliers your business can choose that are not manufacturers. It may be a better fit for your company to choose from one of the following:

• Wholesalers or distributors: Middlepersons who buy products from manufacturers and sell them to retailers in bulk.

• Trading companies: Middlepersons that specialize in buying and selling certain types of products.

• Dropshippers: Manufacturers that produce products and sell them directly to customers on behalf of the merchant. With dropshipping, retailers don't have to be responsible for storing and shipping their inventory. Learn more about how dropshipping works.

• Sourcing agents: A person or company that helps businesses find the right suppliers and manufacturers for their production needs.

Steps to identify suitable manufacturers for your business

Now you can take these steps to evaluate and identify potential manufacturers for your business:

1. Conduct initial research: Check out online platforms, trade magazines, and industry reports to find reputable manufacturers in your industry. Also, consider scouring: online supplier directories, forums and social media groups, Google and NAICS (North American Industry Classification System) code databases.
2. Network: Attend industry events and trade shows and tap into online and in-person professional networks. This can help you gain insights about which manufacturers other businesses are using and what potential have to offer.
3. Gather product samples: If you've identified some prospects, ask for a product sample before jumping into a contract agreement. Remember to request a quote for the sample, as well as a turnaround time and payment terms.
4. Visit manufacturing facilities: Get a first-hand look at a manufacturer's production process by visiting their facility in person, meeting with on-the-ground team members, and asking questions about their fulfillment procedures.
5. Run the numbers: Once you've narrowed down your potential, compare quotes and calculate manufacturing and shipping costs. From here, you can determine your projected profit margins.
6. Negotiate your terms: Finally, work with your new to set favorable terms, including costs, processing fees, order quantities, and shipping timelines.

Key factors to consider when choosing a manufacturer

You'll also want to consider these key factors when researching and deciding on a manufacturer:

• Communication: Delays, errors, and last-minute changes can happen in the production process. It's important for your manufacturer to have clear and efficient communication channels. This way, when any changes do arise, you can stay informed and adjust as needed.
• Production capabilities: Make sure your manufacturer has experience in your industry and the ability to scale production as your business grows.
• Financial stability: Gather records to understand the financial health of your business. You'll want to know that you can build a lasting, long-term relationship.
• Location: You may want to choose a nearby manufacturer for lower shipping costs and easier on-the-ground access.
• Turnaround times: Evaluate lead times to ensure your products will be produced and delivered on schedule.

What risks should you consider when choosing a manufacturer?

As with any big business decision, choosing a manufacturer comes with certain risks. After all, you're bringing a new partner into the fold and trusting them with your product supply.

Before you sign any contracts, consider these potential problem areas:

• Quality consistency: Your manufacturer should be able to maintain product quality over time, even as you increase your orders.
• Communication barriers: Especially with large or overseas manufacturers, you'll want to make sure you can reach them in a timely manner with any questions or concerns.
• Production capacity vs. demand: Say you need to ramp up production or change your orders each season to meet fluctuating demand. Your manufacturer should be able to accommodate your needs.
• Confidentiality concerns: Make sure your product ideas and intellectual property are protected from theft, data breaches, and fraud.

How to position your business as an attractive partner for manufacturers

Remember that you won't just be vetting potential manufacturers. Manufacturers will also evaluate your business to see if you make a good fit — and the last thing you want is to find the perfect manufacturer only to have them turn you down.

How can you let manufacturers know that you're the right for them? Here are some ways to set your company apart:

• Establish a clear business vision and mission.

• Set up structured and reliable communication channels.

• Demonstrate financial stability and transparency. Use these tips to sell products online and grow your customer base.

• Prioritize loyalty and long-term collaboration.

• Adopt eco-friendly and sustainable business practices. Check out these tips for better sustainability.

• Prove your ability to scale and meet future business goals. Learn more about how to set goals for business growth.

How to cultivate a successful relationship with your manufacturer?

Selecting the right manufacturer can take some work, so once you've found your match, you'll want to make an effort to build a lasting, mutually beneficial relationship. Here are some tips to nurture your partnership:

• Provide regular communication: Have regular catch-up meetings and debriefs to stay aligned on progress, spot risks and vulnerabilities ahead of time, and proactively address any issues.
• Offer feedback for continuous improvement: Help each other streamline production by offering timely feedback and recommendations for improvement.

• Maintain trust and transparency: Are you making changes to your mission statement? Thinking about discontinuing a product? Eyeing competitors with lower production costs? Be honest and open with your manufacturer every step of the way. They may be able to help or provide guidance as you continue building your business.