Questions to ask a Manufacturer before starting your Small Business Starting a Small Business?
Important queries to ask a Manufacturer
Are you in the market to create a brand-new product that will require manufacturing?
I’m on a 365-day exit strategy from my day job to my side hustles those of you that are following me already know that. Over the next year, I will pivot from my main job to match my income with my side hustles or exceed it. I hope you come along on this journey with me. Let’s get into it.
As I was planning out, I do mean plotting, planning, and strategizing my 365-day exit strategy I thought about product creation. I basically looked into a product, I was looking for something I was using in my household and I realized it wasn’t as easy to find as it should be and I immediately thought that’s a point of entry.
I started doing my research. I did some market research, a little bit of market analysis and found out that only a couple of companies actually manufacture this particular product. I immediately started digging, making phone calls, and talking to mentors to find out how to get in. What is the process? What I need to do? So on and so forth. This leads me to today’s question.
What are the critical questions to ask a manufacturer?
Now keep in mind that if you’re going to be talking to the manufacturer and asking them these questions, I hope you’ve already done your market research. You’ve already done your market analysis, and you know that there is a hole that you need to fill.
There’s a market for what you want to sell and buyers are willing to buy it.
Those are essential points and I don’t want you to miss out on that because you’ll be speeding and getting way ahead of yourself if you’re talking to manufacturers and haven’t done this process first.
If you have made it this far and you determine that it is time to create your product, then this is where you need to tune in. Once you ask the manufacturer these questions, I want you to tune in and look closely not just for their answer, but the way they answer the question because you want to imagine yourself on the reverse side.
You’re already a client of this manufacturer and they’re manufacturing your goods. Some other stranger asks them questions about what they manufacture, who their other business partners are, and who they are working with. You want to see how much information they are giving away to perfect strangers.
1. Are they actually a manufacturer?
The first question you need to ask your manufacturer is “Are they actually a manufacturer?”.
You want to make sure you’re talking to the manufacturer. The person that owns the manufacturer, the manager, director of operations, someone.
You do not want to be talking to a wholesaler, a distributor, a supplier, or an agent.
2. What exactly do they manufacture?
The second question that is important to ask a manufacturer is “What exactly do they manufacture?”.
You want to make sure that whatever their manufacturing is in line with what you hope to produce, because if they already have the machines tooled and ready and lubricated. The process is down, then that’s the manufacturer you want to go to.
You don’t necessarily want to go with the manufacturer that hasn’t manufactured what you hope to manufacture and doesn’t have that process down to a T.
A subset to that question is, who are they working with.
Now, they probably have signed some form of NDA, so they can’t tell you exactly who they’re working with, but can tell you what they’re producing and the industries that they’re working with to give you an idea of what their breath and scope are.
3. can you visit the factory?
The third question you want to ask is “Can you visit the factory?”.
Now I know a lot of you are dealing with manufacturers, hope to deal with manufacturers overseas, and if you can afford it and it’s an option for you, I would recommend that you go see the factory.
You want to see the factory. You want to see their operations. Who’s working there, and you want to feel the energy in that place. I got lucky in my case. I hope to be working with a US manufacturer, which cuts out a lot of the ambiguity regarding the manufacturing process, especially dealing with foreign manufacturers.
But the price point isn’t always best for that, so I encourage you to do what you want to do, research your options. If there’s an opportunity to see the facility you should.
4. What are the phases of production?
The fourth question you need to ask “What are the phases of production?”.
You don’t want to, and you can’t assume that you have a product that’s going to be produced. There’s usually a design phase. There may be an engineering or tooling phase. You have your prototype phase, then you have your actual product creation.
You need to know the difference and the timelines of those phases.
5. What quantities can they produce?
The fifth question is “What quantities can they produce?”.
You need to know how much is the smallest and the largest amount of quantities they can produce. There’s usually going to be some cost savings associated with the more products that you make, but not always, depending on the product.
You need to know what their lines are, where their cut lines are, and what they can do to help you get your product to market without sacrificing too much product while you’re testing the market.
6. What parts, ingredients, materials of the manufacturing process can they actually source?
The sixth question you must ask a manufacturer “What parts, ingredients, materials of the manufacturing process can they actually source?”.
You have to understand if you’re making clothing for instance, they may be able to outsource or have some deal with the label makers, the yarn makers, the thread people, or the silk people.
You may want to use their discount. You may want to let the manufacturer source those items because they can get a better deal than you can.
On the other hand, they may be trying to gouge you on some things you can actually find cheaper. So you need to explore your options, check your prices, and do a cost-benefit analysis of all angles.
7. What are their prices?
The seventh question you need to ask is “What are their prices?”.
In my experience I did ask this question but I did not get a straight answer. That is because there’s so much that goes into the manufacturing process.
Most manufacturers can’t give you a blanket statement; that’s what their prices are. I’m sure with some exception there’s some product out there you can create, and they know to a T exactly how much it’s going to cost per unit, timelines, all that.
But if there are phases in production that are going to cost, you do want at least to know a ballpark. A minimum-maximum range of what your expectations are.
8. What are their payment terms?
The eighth question you need to ask is “What are their payment terms?”.
You need to know what you have to pay and when.
Do they expect a deposit before even doing the design, the engineering phase? Are you paying hourly for someone to design your product and bring your prototype to life? Is there a deposit required when you actually begin the manufacturing line? Do you have to pay 30% upfront, 70% delivery?
I mean these are all the things you need to know because you need to know what you’re getting into. When that money is due and when you have to source those funds.
The most important question is, can you afford it?
What help do you need? What can you figure out yourself, and is it even worth going down that road?
9. What are their deadlines?
The ninth question you need to ask “What are their deadlines?”
What are their deadlines for the design? What are their deadlines for the engineering and tooling phase? What their deadlines for the production phase?
These are drop-dead dates.
When your sample’s going to be ready? Another critical question, when will you have your samples?
10. What do they do if there is a mistake?
And the tenth question you need to ask all manufacturers is “What do they do if there is a mistake?”.
Just imagine you’ve gone through all those phases. Everything looks and then you realize that there is a mistake. There’s something wrong with the product. There’s a bump where there should be a groove. The design is a little off. All of the pieces aren’t exactly the same.
What part of that do they take responsibility for? Which part of that do they carry over to you?
Most importantly, how are they going to fix it? How long is it going to take?
Going down the road of product creation is scary. Especially if you’re a first-timer like me, but it was so exciting and so intriguing speaking with the person who will bring my product to life.
If you’ve made it this far in this journey, I commend you and I encourage you to keep going. Keep going and keep going until you reach your goals.
As I said before, I promise to share my successes and my pitfalls with you in the hopes that I can save you from making some of the same mistakes if you’re going down that same road.