Unless you plan to manufacture your product yourself or plan to license your product, you will need to find a quality manufacturer to handle the production of your product. So whether you’re a third-party manufacturer, private label sales, or partnerships, you’ll need to find someone who can do your product cheaply and effectively. Of all the questions I get from inventors, how to find a manufacturer in China is probably the question I get first.
Make sure you know the lead time for your product. For example, it is extruded plastic, thermoset plastic, machined, stamped and a number of other terms that distinguish the different ways of making products. You will have trouble finding the right manufacturer without being able to accurately describe the production process. If you do not know the name of the process, try contacting these groups:
Call the companies, see if they can produce your product, and get an estimate for the production of small and medium volumes appropriate to your part. One could be an order of 500 and 2500 pieces for one product and 50 to 5000 for another. This way, you can see if companies can be a good fit for you. Do not be discouraged if companies do not want to quote you. Keep calling until you find one that wants your business.
Try to determine if a manufacturer has an underutilized plant. All manufacturers have fixed or fixed costs (ie, wages, rent, and telephone bills) that they need to pass on to the products they produce. Thus, the less products they produce, the higher the indirect cost per product. Usually these will be the manufacturer who can offer the shortest delivery time to fill your order.
Now, it may seem that you will want a manufacturer running your plant near capacity to have the lowest indirect cost per product, but what is good about finding a manufacturer with an underutilized plant is that they want your business and must be willing a Make concessions. For example, if you can have extended deadlines for the first six months to a year, you will need far less operating capital. Or you can get all the startup costs they depreciated, which means that for the first run of your product, the initial costs are distributed on each product produced as a small fee.
Consider the financial situation of the manufacturer. While you want a manufacturer with an underutilized plan to offer you concessions, you do not want a company that is about to go bankrupt. Request a financial statement from all your potential manufacturers. Then find an experienced business person to review this document with you. If the company is in financial trouble, it is probably very risky for you to produce your product with them.
Then, at a manufacturer, you want to find a plan with all the right equipment that is not running close to capacity, but not so slow that it is in financial trouble. This may seem difficult to determine, but by following the steps above, you should be able to discover all of this information from them. Do not be shy about phoning businesses, they usually say much more than you would expect.