Common Questions about Manufacturing

Often, I end up connecting with new startups that are launching and, occasionally, there will be someone who is interested in designing, manufacturing and distributing products.

With more than 20 years of experience in making mistakes in manufacturing and retail, I’m always happy to pass on thoughts about the things to consider.

The list below is not exhaustive. Rather, it highlights a number of things for people to think about before going deeper in the process of making a product.

Design considerations

• What type of product are you designing?
• Is it a hardgood, (chair) or softgood (jeans), or piece of hardware (iPhone)?
• Are there custom components required (such as an embossed zipper), or can you use off the shelf parts (a standard zipper)?
• Do you have the capabilities to design the product yourself, or do you need to outsource the design process?

Prototyping

• Can you make a very rough prototype yourself using scrap materials for size and scale?
• Do you have someone locally that can make a low-res version of the product?
• Are you set on the product looking exactly the way it does in rough sketches and renderings?

Manufacturing

• Materials – Are there specific materials that you want used in the product (such as steel vs. aluminum)? If so, you’ll have to be specific with the manufacturer. Telling a manufacturer that you want “a metal piece of trim” isn’t helpful. Rather, letting them know that you want “brushed titanium trim” is important, if it’s an integral design detail.
• Where to produce – Do you want your product manufactured Domestically or Overseas? Domestic manufacturers can be more challenging to source, due to production limitations (and often there are fewer that specialize in some processes / materials). Overseas manufacturers have longer lead times and usually much larger MOQs (minimum order quantities). As well, depending on the country of origin and materials used, you’ll have to pay Duties on the finished product.
• Sourcing – When sourcing manufacturers, you can use Alibaba for Overseas sourcing (mind you, it can be hard to find and vet good factories), and Makers Row for Domestic (US) manufacturing.
• Factory Expertise – When sourcing factories, find ones that already make products similar to what you’re wanting manufactured. These factories will already have a wealth of knowledge about the processes and materials required for you to create your product. As well, these factories should be able to create a pre-production prototype for review and approval quicker than factories that don’t specialize in the products or materials that you want manufactured, even if they have the capabilities of making your product. As an example, let’s look at socks. A compression sock manufacturer and a regular sock manufacturer both make socks, but the construction and materials required to create each of the products are vastly different.
• Using Multiple Vendors – If you can’t find a factory that will make the product for you the way you want it, (if there are many custom parts), you may need to source a few factories to put the product together and consolidate all the parts. This is harder to do, since you end up needing to coordinate factories with different contacts, lead times and MOQs.
• Packaging – Depending on the packaging and tags that are needed for the product, you may need to find a separate factory that specializes in packaging, then coordinate with the factory (or factories) that will be making your product.
• Assembly – If there are many parts involved in making your product, which are all coming from different factories, who will be responsible for assembly? Will the components of the product be assembled by you and your team, or will one factory be responsible for assembling all of the components before sending a finished product to you? Same goes for packaging – will the products come finished and packaged, or will they be shipped to you, then packaged by your team?
• Target price — Do you have a target retail price you’re wanting to hit? If so, start there and work backwards to figure out what your first cost has to be, in order for the retail margins to work.
• Sales Channels — Will the product be DTC (direct to consumer), or sold through other retailers? This will determine what your margins and target prices at each stage need to be (ie- first cost > landed cost > wholesale price > retail price). The advantage of domestic manufacturing and DTC is that you can go first cost > retail and bypass all the extra margin that is put into a product. The downside is that it’s harder to build DTC only brands, since it’s simply a game of marketing and brand-building to get products into the hands of consumers.
• Shipping – Once you’re ready to receive your products, you can use platforms such as Flexport to help you ship your products (if they are coming from overseas).
• Warehousing – Lastly, when you receive the products, will they be sent to your warehouse, a 3PL (3rd party logistics) warehouse, or a number of cloud warehouses through platforms, such as Darkstore?

Final thoughts

There are many considerations with designing and manufacturing products, and only a few of them have been touched on. When it comes to marketing, selling, and distributing products, that’s a whole different set of considerations.