5 Questions Entrepreneurs Should Ask When Choosing a Manufacturer If you don't do your homework, choosing a manufacturer to develop your products can be a very long and costly process. Here are a few pointers on making the process less painful.
By Shane Broesky Edited by Dan Bova
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If you don't do your homework, choosing a manufacturer to develop your products can be a very long and costly process. It can takes years of trial and error to choose the right manufacturer to produce your quality products.
So to try to make the process less painful, entrepreneurs should ask these five questions:
1. What other companies do they currently produce products for?
You always want to choose manufacturers that are reputable in the industry and who manufacturer quality products for companies that you know of in the marketplace. If they produce for recognizable brands, you will know that their facilities have been visited and audited by major retailers across the globe.
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2. How big is their facility?
The more employees the factory has and the bigger their facility is, the longer they have been in the business of manufacturing -- giving them experience in their respective fields.
Avoid a small factory. More often than not, these factories have only been around for a short period of time and they lack the quality controls of a more established factory.
When we first started out, we did what most startups do. We tried to find a manufacturer that seemed eager to work hard for us. We chose a smaller factory in hopes that they would be easier to deal with and they would pay more attention to our products, as our volume was on the higher end of their production capacity. This was the wrong decision for us to make, and we ended up having to discard 25 percent of our inventory due to quality issues.
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If you do think decide to go with a smaller manufacturer, make sure you do your due diligence.
3. What quality assurance steps do they take and at how many points throughout production?
Quality assurance is the most important step in the manufacturing process. The more quality assurance steps the manufacturer will take, the lower the risk of defective products and components. Some manufacturers will only conduct quality assurance tests at the end of the production cycle to check if a product works. But this isn't always the best strategy. For instance, If you are manufacturing electronics, this type of testing will not assure the quality of the components inside or the soldering on internal wires.
4. From where are they sourcing their components?
There are likely many different manufacturers that produce the same components inside products that you produce. Each of these components has their own set of problems. If the manufacturer is not producing all of the components that are required to produce your product, make sure that the components they purchase are from reputable manufacturers as well.
The best way to ensure that your components are high quality is to ask the manufacturer to give you a list of materials and the names of the factories that produce them.
5. What is their production capacity?
Production capacity is key to your long-term success. You may be starting off small, but if you are serious about bringing your products to market, you need to ensure that once you close that big sale, you are able to produce the order and deliver on time. The last thing you want to do is under deliver with a new customer or have to scramble to find a new manufacturer to produce a large order.
Due diligence can reduce the trials and eliminate some of the headaches you can encounter trying to find the right manufacturer. Companies often lose significant amounts of money by not ensuring that they have chosen the right manufacturer -- and startup entrepreneurs cannot afford these kind of losses. Make sure to do your homework and ask as many questions as needed. This will show the manufacturer you pay attention to detail and you are on top of their production.
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