We invited University of Utah alumnus Emrys Tate to write production tips based on his experience with Peke•buo, a innovative diaper bag company , which recently concluded a Indiegogo campaign. He is a serial entrepreneur with three running businesses. In addition to starting Peke•bou, he has worked for Robert Bosch Power Tools in Germany in their purchasing department sourcing parts from all over the world for production in Western Europe. Here are his tips and tricks for manufacturing and sourcing your new product:
- Quantities are everything. The amount you are looking to make will determine price and who will even take time to work with you. Manufacturers really have ranked clients. Big orders get special treatment while little ones may be dropped entirely with little notice. Ultimately it depends on what you are producing, but in general, anything less than 500 would be perfect for a contract sewer service or small manufacturer out of South America. You may start looking in China when your quantities are above 1,000 units.
- Beware of shipping and border costs. Many times, I have gotten the best quote out of China, but with shipping time and costs, then export and import fees, it has ended up more expensive than working out of South America. Make sure that you ask the manufacturer to provide shipping solutions or line them up yourself prior to submitting your order.
- Get at least three quotes. The best way to get a feel for the market is to get as many quotes as possible. Get a few from the same country and some from different countries as well. Take your time with this part. So many rush finding a manufacturer, they take the first one and miss out on finding the best deal. Make sure to ask for the same specifications so that you can calculate your own total cost of ownership, which is looking at unit price, shipping and any border fees.
- Political environment is an important factor. A new law can be passed or a new treaty signed that affects your ability to manufacture or move product. Keeping up on the news is a smart way to avoid catastrophic scenarios.
- Protect yourself. Non-disclosures and non-compete agreements are good for the US and in all EU member states, but patents and legal protection can only go so far in most manufacturing countries. This is why you get to be creative when it comes to protecting yourself and your product. If your product is easily replicated, perhaps you need to divide up the completion of your product between three different manufacturers. This may cost more, but worth it to protect your technology.
- Don’t bribe or accept bribes. Know that accepting large gifts is also considered bribery and can get you into a lot of trouble at home. Be assured that it really is not necessary to play that game. Even in countries like China and India. If any manufacturer wishes to play that game, drop them like a hot potato. It is true what they say. Feed the cat ones and it will keep coming back for more.
That’s a good point to determine your quantities beforehand. Different firms are better at producing different quantities. I always thought that the manufacturing process was so efficient.
I thought it was very helpful when you suggested to look for a manufacturer after you get three quotes. My boss and I want to find a new manufacturer for our product. When we look for one, I will be sure to get several quotes beforehand.