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How to Manufacture a New Product Overseas

November 28, 2007

Our Fabulous Fairy Godmother Heather Allard is Founder of Swaddleaze and 2 Virtues and is now a consultant for women entrepreneurs at The Mogul Mom.

Are you completely overwhelmed by the thought of finding an overseas manufacturer?

I was too and that’s why I initially had my product, Swaddleaze, manufactured here in the United States, a decision that cost me thousands and thousands of dollars and nearly sunk my business in the first year.After searching through a gigantic apparel manufacturers directory, I found a mill that specialized in children’s apparel. They quoted me a “cut and sew” price that seemed fair and I contracted them to produce my first run of Swaddleaze.

What I didn’t realize was that I then had to source all the materials for my product and have the goods shipped to the manufacturer before they could begin production. I spent hours researching U.S. companies that made textiles, zippers, packaging, labels and more.I then purchased thousands of dollars of fabric, zippers, Velcro, interior labels, hangtags, packaging, inserts and price stickers and had everything trucked down south. The shipping cost was sometimes more than the cost of materials! My credit cards were practically melting and I had just begun this venture.When the manufacturer had finally finished the production run and had shipped the goods to me, each piece ended up costing $15.85! I had no idea how I would ever turn a profit at this rate. After selling through this initial run and almost going under, I made the decision to find an overseas manufacturer, no matter how daunting that task was.It took me about six months and a ton of “Googling” before I found an overseas manufacturer that was perfect for my needs. So how do you go about finding a manufacturer overseas that’s right for your business?

Here are the steps that will make that process faster, easier and less scary for you.

1. Before contacting overseas manufacturers, take the time to familiarize yourself with the terminology with this indispensable dictionary of trade, shipping and export terms at ExportBureau.com. This will help you feel confident when speaking to foreign manufacturers and will let them know that you’ve done your research. Some of the most common terms are:

Lead time this is the time between placing an order with a manufacturer and when the order is delivered.

Minimums how many pieces of a particular item you have to order. Usually, the more you order, the more affordable the price is.

Terms this usually means how and when the manufacturer will be paid (T/T, wire transfer, net 30 days, etc).

T/T this means that you wire transfer half the amount of the order before the manufacturer begins work and the other half at completion. The manufacturer will give their wiring instructions.

2. Ask around if you know other women who make products, ask them who their manufacturer is and then contact that company about pricing. Be sure to mention who referred you, as this will often get you a speedier reply. (If any of you are looking for a great apparel manufacturer, I’d be happy to refer you to mine. Contact me for more information.)

3. Use Alibaba.com, a global trade website that puts products, suppliers and buyers in touch with each other. Some Chinese suppliers are labeled “Gold Suppliers” which distinguishes them as premium, reputable suppliers. They are required to meet stringent criteria before becoming a Gold Supplier and are usually a safe bet. Once you’ve found a handful of manufacturers, contact them for pricing, terms, lead time and minimums. If possible, look for a manufacturer that will provide you with a complete package (also called FOB package). This means that the manufacturer will source all materials, produce the goods, package the goods, pack the goods, ship the goods and arrange for customs clearance and receipt of goods here in the U.S. and finally, have the goods trucked to you or your fulfillment center.

4. Compare pricing and service and then request samples. If there are any safety guidelines for your product, you must provide the manufacturer with those guidelines/criteria. Most overseas manufacturers are not familiar with US safety regulations set forth by the CPSC. Refer to CPSC.gov for more information. If you’re unsure about your product safety requirements, you can email a CPSC employee and they will assist you.

5. Once you’ve reviewed all samples and compared pricing, choose the manufacturer that’s right for your product or business and begin the production process.

Then, breathe a big sigh of relief because YOU DID IT!If you follow these steps, you’ll find out the same thing I did that manufacturing overseas isn’t so scary or overwhelming after all. It’s an exciting step that can often be the beginning of big success for you and your company.

Written by startupprincess · Filed Under Feature, Startup & Grow 

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