Struggling to find a manufacturer and bring your idea to life? And rightly so, since selecting the right manufacturing partner is going to save you a tremendous amount of headache. There’s no one-size-fits-all rule. The needs of a business wanting to sell to high-volume, big-box retailers differs from that of say a clothing designer with small batches of inventory selling to local boutiques. You have to be able to leverage other people’s competencies and resources as much as possible.
BlackEnterprise.com consulted with member of the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses. BE wanted to know: What questions should I ask a manufacturer before doing business with them? The following answers are provided by members:
1. How can you help me grow?
Vendors are great. However, vendors who think ahead become your best partners in the long run. As your business grows and needs change it’s helpful to find a manufacturer who wants to change with you. Having your manufacturer weigh in on how they can ramp up to accommodate your growing business is not only helpful but saves you time and money having to search for a larger vendor in the future.
2. What is your quality control policy?
We manufacture offshore and one of the key make or break points to the success of this arrangement is quality control. If you receive your order and 1/3 of the products have defects, you better hope you arranged some sort of credit or refund policy with your manufacturer ahead of time. Otherwise you may be stuck with goods that you can’t sell which could be very costly.
– Chris Kane, Bounceboards LLC
3. Who are your other clients?
It’s important to ask for a list of clients for various reasons. First, you want to know that you’re working with a reputable manufacturer who has a strong background of working with great clients. Second, supplier relationships can be a competitive advantage for your company, so you want to make sure that the client list excludes any direct competitors, too.
4. How can we mutually benefit from this partnership?
It’s important to understand how your company and the manufacturer will both benefit from the partnership; otherwise, it isn’t valuable. Going over the mutual benefits of the partnership should be one of your first steps in beginning your work together. Make sure both parties commit to helping the other, and it will be a successful partnership.
5. Ask any and all questions that align your expectations with theirs.
Everything in manufacturing is a tradeoff. You can focus on lead times, but your quality might suffer. Same happens if you ask for “low prices” — you’ll get a low price, and probably a bad product. Bring a standard list of expectations into every manufacturer meeting. Know your tradeoffs and your priorities. Ask questions that revolve around creating clarity and alignment on expectations.
6. How much are your other clients producing on average?
Manufacturers need to balance and prioritize their production runs. You’ll want to get a good understanding of who else your manufacturer works with, or at the very least, how much those customers are producing on average. You never want to be the low man on the totem pole, so make sure your order sizes will be significant enough to the manufacturer to get their highest level of service.
7. What happens when you aren’t doing well?
Manufacturing partners tend to be very positive and upbeat when you’re meeting your production quotas and things are going well. What defines a good partner is how they’ll react when you aren’t continuously producing units. It’s natural that at some point in your growth, you’ll hit a lull — so make sure you have a partner that views you as a long-term bet and will help you through that low point!
8. What is the most common reason that manufacturing engagements fail? What do you do to protect against them?
A common reason for failure is unclear communication of expectations and requirements, along with poor accountability management. This question offers insight into a firm’s understanding of the challenges of manufacturing and the steps they’ve taken to address potential problems.
9. How much are you going to discount for delays?
One of the biggest issues with manufacturing, particularly overseas where you can’t easily visit the facility, are delays after delays. In reality, only the manufacturer can control their people and material ordering processes, so fight for discounts from excessive delays — especially those that result from product that must be remade due to issues with quality control and failed inspections.