How to Find an Overseas Manufacturer: A Primer on Global Sourcing 0

manufacturing

You have a great new product that you want to take global. Now, you need to find someone to manufacture that product. Do you know where to find a manufacturer overseas? I do.

Contract manufacturing is when a company arranges to have a local or overseas manufacturer make all or part of the product. Typically, the hiring firm provides a design or formula to the contract manufacturer to replicate or improve. The selling and marketing of the product is left to the hiring company, unless other arrangements have been made. Now, this same process tends to be referred to as outsourcing if it involves a business function, especially if it’s done across borders, or global sourcing if it involves finding an overseas manufacturer.

Factors to consider before you select an overseas manufacturer

Before you start the process of finding an overseas manufacturer, you need to determine if you are ready. That said, I suggest that first, you read the following two articles:

  1. “Is Global Sourcing For You,” which discusses 20 questions to ask before you begin. Is global sourcing a good fit for your business? Make sure you have determined that global sourcing is right for you before proceeding any further.
  2. “How to Develop and Price a New Product for the Global Marketplace” because it emphasizes why it is important to check if there is a similar product to yours already on the market. If there is a similar product, see how your idea can be differentiated and, of course, use the competing product’s price point as a starting point for yours.

As you assess a potential overseas manufacturer, make sure it has most—if not all—of the following characteristics:

  • A good, clean, well-managed facility
  • It is ISO-certified, meaning the company is meeting quality standards
  • It has drop-ship capabilities (direct to customers)
  • It has the ability to be flexible and absorb market fluctuations
  • It can keep up with demand on product
  • It has synergies with your company
  • It is highly reputable in the marketplace
  • It is financially sound
  • It solves your specific production challenges

As you analyze supplier pros and cons, it helps to address some other key questions. For instance, how far away is the supplier? Does the U.S. have any trade agreements with the country, and how do you plan to pay for the goods? What is the product quality like, is it satisfactory? Are you in a hurry, and will the supplier be able to meet your demands on time? For a more in-depth look at some deciding factors when choosing a supplier, see my article on Factors to Consider When Outsourcing.

Many business owners turn to overseas suppliers to curb rising production costs and to boost global competitiveness. To ensure you’re on the right track to success, keep the following things in mind:

  1. Source to a country with low labor costs and good quality control
  2. Source to a country where you can take a plane ride with comfort and ease
  3. Source to a country where you can understand the language
  4. Source to a country where you can respect and abide by the laws
  5. Source to a country where you can trust the people you do business with

Where to look for help in finding a product manufacturer overseas:

Now that you know the ins and outs to selecting an overseas manufacturer, it’s time to find one. Each of these resources provides a wealth of information on potential manufacturers.

1. Global Sources 

A B2B marketplace connecting buyers, suppliers and manufacturers. For more information on what Global Sources can and can’t do, read “An Inside Guide on Sourcing in China.”

2. Alibaba 

Here you can find manufacturers, suppliers, exporters, importers, buyers and wholesalers. For more information on Alibaba’s capabilities, read “A Short Course on Alibaba.”

3. ThomasNet.com 

A product sourcing and supplier discovery platform for procurement professionals, engineers, plant and facility management.
For additional information relating to sourcing and product quality, read, “Where to Source Products and What To Do If You Receive Crappy Product Samples From Overseas.”

Am I missing anything? If so, please leave a comment and share your thoughts.

 

About the Author Laurel J. Delaney is founder and president of Chicago-based GlobeTrade.com, a management consulting company that helps entrepreneurs and small businesses go global. She is the publisher of The Global Small Business Blog, which is ranked No. 1 in the world for entrepreneurs and small businesses interested in going global and the author of “Exporting: The Definitive Guide to Selling Abroad Profitably,” published by Apress, 2013. Follow Laurel on Google+ Read more »

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