Starting a business or growing your existing business can be an exciting prospect, especially when you're interested in creating your own products. But if you don't have the manufacturing capabilities to do it yourself, you may need to find a manufacturer to manage the production for you.
Choosing a manufacturer is going to be one of the most important decisions you make in this new venture. The manufacturer you choose and the quality/quantity of their production will help you determine the cost of your product, as well as the quality and reliability you want to offer to your customers.
In this guide, we’ll cover how to find a manufacturer that will best fit your business, how to secure a manufacturing contract, and common mistakes to avoid during this process.
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Is it best for you to work with a manufacturer or a supplier?
Before we start looking for a manufacturer, we should discuss the difference between a manufacturer and a supplier. Many new ecommerce business owners confuse the terms, which can lead to mistakes and unexpected costs when sourcing your products.
A manufacturer is a company that produces your products from raw materials or components. They produce or assemble it and package it up to ship to your chosen destination, like a warehouse or retail outlet. They can produce durable goods, like cars, appliances, and electronics, or even food products for grocery stores or restaurants. Manufacturers can either create products under their own name or work with businesses to make white-label products.
That means if you want to build a custom product with your own branding but lack the capabilities or machinery, you need to work with a contract manufacturer who will build your product for you.
A supplier is the broader term for any company that provides products to another business. This can include manufacturers, wholesalers, and distributors. Some suppliers manufacture products while others buy them from manufacturers (wholesalers) or sell them on behalf of manufacturers (distributors). A supplier is technically not different from a manufacturer, wholesaler, or distributor; it's the blanket term for all of them.
A wholesaler is someone who buys large quantities of finished products at a lower price from manufacturers and then resells them to retailers at a higher price. They don't make the products, they're just the middlemen.
A distributor is like a wholesaler, but they are either employed by or in a contract relationship with the manufacturer. They market and sell the product on behalf of the manufacturer to different dealers or retailers. The dealer/retailer orders products from the distributor who buys it from the manufacturer — the dealer/retailer never contacts the manufacturer directly.
Bottom line: If you want to build your own brand and sell unique products with your own customization, work with a manufacturer. But if you're just starting out and you want to see if there will be interest in your products, buy from a wholesaler or work with a supplier in the interim.
If you find that people are interested, and you can buy — and move — the manufacturer's required minimums, then it's time to find a manufacturer who can fulfill your demand.
Related: Is buying wholesale right for you?
Steps to find a manufacturer
So, how do you actually find a manufacturer? Finding the right one takes time and research. Don't just do a quick Google search and settle for the first one you find. You need to take a few steps before you even start searching for your manufacturer.
1. Put together your product specifications
You need to figure out your new product's specifications and requirements. If you're not a product designer, then make sure you work with one during the product development process. You can either contract with a freelance designer or you can hire one full-time for your company. (Or maybe you are one already.)
The details of your product should include:
- Materials: What materials will the product be built with? Are there going to be problems getting them? (That's the manufacturer's issue, but material shortages will affect your product, too.)
- Design and features: What are the unique details, colors, and branding? What special things does it need to be able to do?
- Dimensions: What is the size, shape, and weight of the product? This will ultimately affect your shipping price.
- Packaging: How will your product be packed and shipped? Don't skimp on packaging if you have a fragile or breakable product.
- Quality standards: What is the level of quality you expect? What do you hope to offer your customers? How long will your product last at the level of quality you want?
You'll also want to consider whether your product will require special molds, custom components, or specific certifications. The more details you can come up with, the easier it will be to find the right manufacturing partner. Many manufacturers will ask for a product spec sheet before they give you a quote, so you need to have this information before you start looking for a manufacturer.
Hopefully, your manufacturer will also have a product designer or engineer on staff to help you with the process, as it will help to have at least a second set of eyes on your design.
2. Where to find manufacturers you can trust
Finding a reliable manufacturer is going to take a lot more than just Googling "[product] manufacturer" and copy-pasting that list.
The easiest way is to use an online directory like Alibaba, Maker's Row, or ThomasNet, which is the oldest of the three, having been around since 1898. They will have information about each manufacturer, their capabilities, certifications, and even past clients.
You can also attend different manufacturers' trade shows in the U.S., China, Mexico, or any other country where you want to manufacture your products. (Keep in mind that with the threat of new political tariffs, you'll need to take those costs into account in your total cost of production, depending on where your manufacturer is located.)
Don't forget to network with other ecommerce entrepreneurs via online industry forums, Facebook groups, LinkedIn groups, or even social media hashtags. You can even ask for referrals from people you trust as a way to avoid unreliable manufacturers.
And be sure to Google certain phrases to see if your prospective manufacturers are reliable or shady. Google phrases (don't use quotes) like "[manufacturer] lawsuit," "[manufacturer] ripoff," or "[manufacturer] scam" to see if a prospective manufacturer is being discussed or associated with those terms.
Deciding between domestic versus overseas manufacturing
Your most important decision will be to work with a domestic or overseas manufacturer. Of course, "domestic" and "overseas" depends entirely on where you live, so we could even distinguish between domestic, offshore, and nearshore.
Assuming you're based in the U.S., or at least North America, then domestic/nearshore is anything based in North America, since technically Canada and Mexico are not over seas. For that matter, neither are Guatemala or El Salvador, although those products are shipped via ocean freight, not truck or train.
Other popular manufacturing countries include China, India, Vietnam, Thailand, and Brazil.
For domestic manufacturers (U.S., Canada, possibly Mexico), you'll get the following:
- Higher quality standards, better oversight, and fair wages for their workers.
- Faster shipping times and fewer customs issues.*
- Easier communication, (almost) no language barriers.
- Higher production costs because of higher wages.
For overseas/offshore manufacturers (China, India, Vietnam, Brazil, possibly Mexico):
- Lower production costs (because of much lower wages). That leads to better profit margins.
- A wider variety of manufacturing specialties.
- Longer lead times and shipping delays.
- A possibility of IP theft and copying
- Possible language barriers and cultural differences.
You may have other considerations, too, like whether your product needs to be "Made in USA" for branding purposes, or if you’d prefer being a global business instead. The price will be higher, but shipping will be minimal, and you will have legal protections for your intellectual property.
If price is your biggest concern and you need to keep costs as low as possible, then overseas/offshore manufacturing is going to be your best choice.
3. Creating your shortlist of potential manufacturers
After you've created your original list of possible manufacturers, it's time to whittle them down to a manageable few — the list of the best possible candidates. Clearly, not all of them are going to be a good fit for your business, so focus on the companies that meet your quality and reliability standards, as well as your costs for both production and shipping.
Look for manufacturers that specialize in your product category. While there will be some that say they can produce anything, companies that make heavy equipment will probably not be the best fit for electronics. Check for industry certifications, client reviews and testimonials, and product samples.
If possible, visit the factory or request a video tour to see their production process and quality control measures.
4. Reaching out to manufacturers
So what do you ask for when you're trying to find a manufacturer who can handle your product specs, lead time, and quality requirements? You need to provide detailed information about your product, the estimated order quantity, and expectations.
In your business email to potential manufacturers, be sure to ask them about:
- Pricing.
- MOQs and bulk order discounts.
- Lead times for both production and shipping.
- Shipping costs and insurance.
- Sample availability and costs.
- Quality control measures and certifications.
Don't forget to ask for product samples before you commit to a large order. Testing samples will let you evaluate the product quality, packaging, and potential improvements.
From your shortlist, compare the pricing, quality, communication, and reliability. If none of those choices seem perfect — and that will be difficult to find — place a small test order before you commit to a long-term partnership.
As part of your discussion, you'll also want to negotiate things like:
- Volume discounts.
- Payment terms (e.g., 50% upfront, 50% after production with net 30-day terms).
- Flexibility of MOQs.
Also, make absolutely sure that warranty or refund policies are included in the contract.
5. Finalizing the manufacturer you want to work with
Once you've received responses and product samples from potential manufacturers, take time to thoroughly evaluate each one. Compare factors like quality, pricing, production capabilities, and responsiveness. If no manufacturer seems like a perfect fit, it may be worth starting with one that meets most of your needs, even if at lower volumes, while still looking for other options.
When you've selected a manufacturer, it's time to create a written contract that outlines all agreed-upon details, including product specifications, projected order volumes, delivery timelines, and recourse for quality issues.
Some additional tips for getting off to a good start include: starting with a small test production run to build trust and minimize risks, using a third-party inspection service to validate production capabilities and quality control measures, and maintaining frequent communication to proactively address any issues. Consider paying a percentage upfront and the remainder upon receipt to incentivize on-time delivery.
Building a relationship with a manufacturer takes time and due diligence. But taking the proper steps early can set your partnership up for success. Moving forward with clear expectations, quality assurance measures, and a spirit of trust and cooperation will provide a solid foundation. Adjust timelines and processes if needed, but remain committed to finding a win-win relationship with a manufacturer that enables your business to thrive.
6. Scaling production and building a long-term relationship
Your company's reputation and brand are dependent on the work your manufacturer does, so you want to make sure you have a strong relationship with them.
That means communicating consistently and regularly. You need to become best friends with the production manager or whoever is handling your account. It also means that you should summarize any phone conversations you have. Better yet, record them and keep transcripts, then send a summary of those conversations with the key takeaways via email to CYA (cover your assets).
Do regular quality spot checks on every new shipment. If you asked for certain specs or qualities of raw materials, have your own quality control people do those checks to make sure the right materials are being used.
A few years ago, I had a client in the luggage business whose products were made overseas. They knew their manufacturer would swap out the thicker materials they required with thinner, less expensive materials because they had done it in the past. That's why, when they received a new shipment every month, they grabbed two or three bags off the container, tore them apart, and measured everything about those bags. They said once a year or so, the manufacturer would try to change things up and use inferior materials.
When that happened, they closed the container back up, refused the shipment, and sent it back to the manufacturer. Needless to say, the overseas manufacturer wasn't happy about it, but they also knew they had been caught.
Consistent quality checks, a strong working relationship, and clear communication were key to avoiding quality issues in this case. While my client eventually moved to a new manufacturer, these factors can also be key to helping your business successfully scale up with a manufacturer that you work well with.
Here are some steps to take when maintaining your relationship with your manufacturer and creating sustainable business growth:
- Monitor production efficiency and costs. Keep a close eye on delays and inefficiencies, as they can disrupt your supply chain and damage your reputation with your customers.
- Evaluate shipping costs and timelines every year. Shipping costs and tariffs will eat into your profits, so review shipping methods, timelines, and costs to stay competitive.
- Communicate frequently and regularly. Address concerns as they come up, not during quarterly or annual reviews.
- Stay flexible and plan for growth and change. As your business grows, have regular discussions with your manufacturer for streamlining production or expanding your product lines and order quantities. Look into discontinuing products that are not selling.
Avoid these mistakes when you’re getting started with a manufacturer search
You'll have a tough time trying to create a positive relationship with your manufacturer if you make these mistakes. They'll be hard to recover from and could even ruin your company's financial health.
- Choosing the cheapest manufacturer over the quality manufacturers.
- Not requesting samples before placing your first order.
- Failing to research each manufacturer’s reputation.
- Ignoring communication issues or long response times.
- Not having a written contract that outlines your expectations and requirements.
Related: How to sell online
Bottom line
Finding the right manufacturer takes time, research, and patience. It's not a matter of Googling to find a couple names and signing a contract. You need to establish your product specs, compare domestic versus international options, and negotiate for the right terms. If you can do this, you'll build a strong foundation for your company and the products you sell, becoming a competitive brand in your chosen market.
