If you cannot find any appropriate manufactures nearby then you probably won’t get around taking a look on Alibaba. This is the biggest eCommerce Platform in the world and the most comprehensive library of suppliers. You can really find any thing there.
Go to Alibaba.comand switch from “Product” to “Supplier” to search for manufacturers:
This is an indicator that suppliers take their business more serious. It is a premium membership for suppliers and those who apply must pass an onsite check from Alibaba to get qualified. The Gold Supplier status is also indicated in years which is a good indicator of how long the company is already doing business on Alibaba (yet, it won’t say anything about the quality!)
These suppliers went through even more thorough checks by third party inspectors and provide full reports with further details about legal status, certifications, production capabilities and so on.
Make sure manufactures offer this for all transactions. Alibaba basically functions as a middle man to protect your money. Your money doesn’t go straight to your supplier but Alibaba will release the payment as soon as the order is completed.
This is an indicator of how fast and how likely the supplier will answer your request. A higher percentage is usually a good indicator.
Manufacturer vs. Trading Company
In the end, none is better than the other because the only thing that matters is the delivered quality and the price. things can go badly wrong with either of
But knowing the difference will give you an advantage when it comes to negotiating. The main difference between a trading company and a manufacturer is the that the trading company does not make the products themselves. They outsource this task to partners.
As you can imagine this will have negative impact on the price because the trading company is charging on top of what a manufacturer charges. On the other hand a manufacturer only makes profit by creating a lot of items usually in the thousands (high MOQ – Minimum Order Quantity).
On Alibaba you will find a lot suppliers that have “Manufacturer and Trading Company” in the description. This means that these companies are usually specialized in one thing but outsource products that they cannot produce themselves. For instance: In my case I have a product that consists of ceramic, wood and glass. A company that offers all of that is very unlikely.
Step 3 : How To Contact Manufacturers
To get in touch with manufacturers you can simply use the integrated messaging service of Alibaba.
When it comes to getting in touch with Manufacturers here is what worked for me:
quick introduction and explaining the purpose
asking about company details
asking about process
ask about sample of existing products
ask about customized samples
asking about customized packaging options
Here is a quick example:
“Dear Sir or Madam,
my name is… I visited your website and found that your competencies are very well suited to realize a product that I developed. “ For that reason I would like to ask you some questions:
1. Could you maybe give me some more information about your company and how your development process works?
2. Could I order samples of existing products? If YES, what are sample costs and what shipping options can you provide?
3. Can you also realize CUSTOM designs? If YES, how would the process would look like and what sample costs and lead time can I expect?
4. Furthermore I would like to know what packaging options you can provide?
Thank you in advance and I am looking forward to hearing from you.”
These are a lot of things to ask upfront, but the only purpose is to see if they are willing to engage first before you send them your product details.
It doesn’t make sense to send all your data upfront because many manufacturers would not even get back to you. I did that at the beginning because I thought it would save time back and forth.
Well, it did’n’t help at all.
Step 4 : Submit Your Product Specifications
Not all manufacturers will get back to you. For those who do and who seem interested in a collaboration, send them your product details. Based on the product details they can provide a detailed cost calculation.
Unfortunately China has restrictions with dropbox and google so you cannot send them a link to download the files.
I haven’t done much research to find alternatives so I sent them all PDF’s and PNG’s via Alibaba messages.
The product specifications should be as clear as possible and should answer potential questions upfront:
send drawings with front, top, bottom and side view
send renderings to demonstrate how the product should look like
send pictures of material that you would like to use
send examples for color
Send them all the necessary data and ask for sample cost + air shipping fee of the sample to your home.
Do you need an NDA?
This is something I used to overthink a lot. At the beginning I worried a lot about chinese manufacturers stealing my idea.
But here is the thing: You are not the center of the universe. Of course everyone things of his own products as something unique that everyone wants to have.
It’s your baby, of course you love it more than everything else.
3 reasons you don’t need to worry:
#1: Chinese manufacturers are confronted with so many product ideas daily. They don’t give a damn about your single idea.
#2: There is so much more to it for a product to succeed: storytelling, marketing, the right customers, relationships, distribution channels, etc. This is just too much effort for Chinese manufacturers.
#3: Even if you make them sign an NDA they will still get away with it because:
a) you probably haven’t created a chinese version of your NDA that also applies to the Chinese law system
b) you will spend more energy on fighting them instead of building your business
c) you will spend more money on law suits than your actual product
So in case you haven’t invented something that will change the world like the iPhone, you don’t need to worry about this.
Step 5 : Track Your Status
If you talk to multiple manufacturers and get multiple quotes in, you might want to create some sort of tracking system in order not to get things mixed up.
I used Google Sheets to capture details and status updates of manufacturers. A good organized tracking system will also allow you to compare quotes with each other.
And you should collect many of them.
Why? because only then you will know what a good price is.
Imagine you contacted 3 manufacturers and got quotes like: 100USD, 500USD and 1500USD.
How do you know what a reasonable price is?
You need data. Therefore I recommend to collect at least from 15 different manufacturers. (I talked to 45 at the beginning)
Step 6 : Make A Sample Order
Great! Things are getting more exciting now! From the list of manufacturers who sent you a quotes for the sample, select your TOP 3 and ask them to draft an order via Alibaba for you so you can proceed with the payment.
The order should go through Alibaba otherwise you are not protected by Trade Assurance. If the manufacturer fails to deliver the sample in a specific timeframe, Alibaba will automatically wire the money back to you.
If you order multiple samples at once you can compare the quality and safe time.
I hope for you that your first samples have the quality you expected but often it will not be the case, unfortunately.
Keep talking to your manufacturers and ask them how they could improve it. As mentioned before, good manufacturers will help you to make a successful product.
You probably need a couple of attempts so don’t give up too quickly.
Step 7 : Make A Test Order
As soon as your sample reaches a good quality level (Gold Sample) that you are happy with, you could basically start to make a big order.
But before breaking your bank account I would highly recommend to make a test order.
A gold sample only represents what your manufacturer is capable of. But when you start making thousands of pieces you have to consider that tolerances are normal and not each piece will have the exact quality.
Some manufacturers are better than others to handle tolerances and the only way to find out is to test them.
A test order will help you
to save money at the start
for marketing purposes when giving away free samples (collecting feedback also)
to test the market by selling some first products
to check quality consistency
to check packaging options
How big should a test order be?
This should be a reasonable number based on the MOQ (Minimum Order Quantity) that the manufacturer sent you before.
For my glasses I have a MOQ of 500 pieces so I negotiated a deal for the test order of 50 pieces.
Producing a smaller number will increase cost for your manufacturer so you will likely pay more per piece.
But that’s ok because you will still pay much less compared to a bulk order with thousands of pieces.
How to make a test order
Message your manufacturer and tell him that you would like to make a first test order because you are unsure about quality consistency when making a bigger bulk order (the manufacturer is challenged to proof that he can keep up the quality)
Ask for the price per piece in case of a test order (this will be higher because of small number of pieces)
Ask for air express shipping (you can still switch to other shipping methods later to reduce your cost per piece but for now you want this to arrive as quickly as possible )
Ask for the time it takes to ship
Reassure him that you are not pushing down the MOQ but only need to check quality consistency and packaging before ordering more and therefore are willing to pay a higher price.
My first test order revealed that improvements in packaging and quality control is necessary. Luckily I didn’t make a big bulk order yet, otherwise I would have wasted quite some money.
If your test order went well, congratulations and you can start to sell your product 🙂
The whole process might look very intimidating at first sight but you just need to go through it once and it becomes easier the second time.
Creating a physical product just takes a lot of time so be patient and kind to yourself. Don’t give up as soon as you encounter problems but see it more as a continuous learning process.”Winners never quit and quitters never win.” – Vince LombardiBelieve in your product and just keep going. Physical products still have a lot of value in this world.
The perceived value of something people can hold in their hands is still higher compared to a digital product where you never know how what’s in the package before you buy it.