If you’ve been thinking about starting a business, you may have brainstormed some ideas of your own, like capitalizing on one of the many in-demand products already on the market.
However, many entrepreneurs find themselves hitting a brick wall when it comes time to actually source products. Whether you plan on manufacturing something of your own or finding suppliers to purchase from wholesale, good products aren’t always easy to find.
In this post, we’ll look at the basics of sourcing a supplier for your next project. We’ll give you ideas for some places to search, and examine how you should approach suppliers and what to ask them when developing a product for your e-commerce business.
What is a manufacturer?
A manufacturer is any business that produces finished goods from raw materials. They sell these goods to consumers, wholesalers, distributors, retailers, and other manufacturers wanting to create more complex items.
Manufacturers typically stick to one type of product. For example, you could work with a glassware manufacturer who creates glass bottles and jars. You could work with one manufacturer for boxes and another for plastic or natural products.
Retailers often work with multiple manufacturers at once to create an inventory for their store.
Is a manufacturer a supplier?
Suppliers and manufacturers are pretty much synonyms. For the purpose of this post, when we refer to suppliers, we’re referring to anyone who has the capability to provide you with products and inventory. This encompasses manufacturers, wholesalers, and distributors.
There are a ton of helpful resources online that you can find through Google. But before you begin, there are a few things you need to know and decide.
First, you should figure out what type of supplier you’re looking for. This will help determine the terminology you need to use in your research. Check out our post on ecommerce business models to help you get started. There are several supplier options, the most common being:
- A manufacturer who produces your own product idea
- A supplier (who may also be a manufacturer), wholesaler, or distributor who purchases already-existing brands and products
- A dropshipping company that supplies products and fulfills orders of already-existing brands and products
Domestic vs. overseas suppliers
If you plan to manufacture or wholesale, when looking for suppliers you’ll need to decide whether you want to source domestically or from overseas. Overseas can refer to any location abroad.
It’s a good idea to secure two manufacturers: one domestic and one overseas. Your local manufacturer can be used as a backup. So, if orders from overseas are late or incorrect, you can fall back on your local supplier. They are often more expensive, but it’s better to keep products stocked and customers happy than having them wait for overseas shipments.
It’s often cheaper to source your products overseas, especially in Asian countries, like China, India, and Taiwan because of lower labor costs. But there’s a lot more to the decision than just the upfront investment and cost per unit.
Both domestic and overseas sourcing have their advantages and disadvantages:
- Higher manufacturing quality and labor standards
- Easier communication with no language barrier
- Marketing appeal of being made in North America
- Easier to verify reputable manufacturers
- Faster shipping time
- High intellectual property right protection
- Greater payment security and recourse
- Higher manufacturing costs
- Less product choice (there are many items that just aren’t made in North America anymore)
- Lower manufacturing costs
- High number of manufacturers to choose from
- One-stop services like Alibaba have made it easy to navigate suppliers
- Lower perceived quality from customers
- (Usually) lower manufacturing and labor standards
- Little intellectual property protection
- Language, communication, and time-zone barriers can be difficult to navigate
- Difficult/costly to verify manufacturer and visit on-site
- Longer shipping time
- Cultural differences in business practices
- Product importation and customs clearance
- Less payment security and recourse
When working with overseas manufacturers and suppliers, it’s a good idea to hire a manufacturing manager. These contractors are locals who live near your manufacturers and handle negotiations, orders, and managing your partners. They can also be the in between for your business and freight companies. Think of them as the central hub for your overseas supply chain.
If there’s an issue, the manager will work directly with the manufacturer to solve it. Managers also speak the local language, which helps improve communication and make production smooth for your business.
Communicating with manufacturers and suppliers
Chances are you won’t use a manufacturing manager when starting your online business. You’ll have to communicate with suppliers on your own. There are three main ways to do this:
- Skype calls
Look for companies that are responsive and eager to work together. If someone is slow out the gate with your emails and samples, do you want to trust them with your business? Probably not.
Finding your supply partners
Sourcing suppliers and manufacturers is a unique process but it’s one of the costs of starting a business. Trying to locate suppliers that are a good fit is a critical decision for your new business, and they aren’t always easy to find.
It’s easy to get frustrated when you hit dead ends or brick walls, but in most cases, it just requires a little more patience and perseverance to find the perfect partner for your new venture.
We at ShopShipShake have been working with businesses like yours with fulfilling experiences. We offer one-stop services, including an efficient supply chain, over 10 thousand of China’s suppliers, and more.
With a successful track record of over 20,000 clients, we are sure to deliver your orders requirements. Let’s get in touch to build, sustain, and grow your businesses.
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