You’ve come up with a great idea for a product, gotten it trademarked and patented, finalized the design specifications and lined up financing and distribution. Everyone is clamoring for your gizmo. Now all you have to do is get the item manufactured and delivered to all those distributors and retailers who will be selling millions of units to eager consumers. Find the cheapest manufacturer and you’re all set, right? Well, not exactly.
As you begin your search, you’ll notice that most manufacturing these days is done outside of the United States. Typically, we’re talking about a faraway country where English is not the primary language, which can make communications difficult. When you factor in cultural differences, which can also be an issue, you’re dealing with a lot that can go wrong before the first shipment arrives at your loading dock.
In dealing with foreign-based manufacturers, I cannot overemphasize the importance of finding a liaison in the area that can be your “eyes on the ground” and function as a bridge between the company and you. You need to be able to trust this person and their organization, and that they understand your business, its goals and how you think, as they’ll be functioning in your place usually many time zones away.
As for the criteria in selecting a manufacturer, it’s really no different than choosing someone to look after your children. A great resume, recommendations from previous employers and personal references mean everything.
It is essential to think of your manufacturer as a partner in your venture, not just a vendor. This means you have to trust their opinions when it comes to their area of expertise. It’s a big mistake to just hand them specifications, walk away and expect your shipment of finished products to be perfect. I look at it as a team effort. If they make suggestions on how to execute my product, I always take the opportunity to listen. If it sounds reasonable, I almost always let them do it. Of course, take the time to see and test a final product sample before giving your final OK.
I had a shoe product a few years ago that was extremely successful — a sandal made of ethylene vinyl acetate (EVA). In a rush to make an on-air sales date that was expected to generate huge sales, we decided to change manufacturers. Our existing vendor was great, but they weren’t equipped to handle that kind of volume, so we switched to a larger company that was very reputable. Despite claiming to be proficient in working with EVA, the new manufacturer had problems with the injection molding, resulting in a high degree of variability in the sandal’s arch supports. We wound up with a high return rate for the batch, which was a tremendous pain and let our brand customer down. It wound up costing us zillions of dollars, but fortunately we were able to make good on all the orders. Shortly afterward, we found a new company, but we learned a valuable lesson from the experience.
One of the biggest issues currently facing product-based companies is mounting manufacturing costs everywhere in the world. One solution for me has been to provide additional value to what I’m selling that compensates for the higher prices. For example, if I’m offering a piece of exercise equipment that has seen its price increase by say, $25 from last year because of higher manufacturing costs, it’s hard to pass that cost onto the consumer and still sell successfully. To offset that, I can include a fitness DVD, CD or computer memory stick that carries the equivalent retail value that makes up for the difference. My manufacturing costs will be relatively minimal for the additional item, but the consumer will receive more in return.
The current economy aside, there will always be challenges in manufacturing that call for a healthy balance of common sense, trust and out-of-the-box thinking, not to mention the ability to learn from one’s mistakes. Ultimately, it’s all about the golden rule of any brand: keep your customers loyal and loving you by treating them well.
There’s always a way.
Tony Little is the president, CEO and founder of Health International Corp. Known as “America’s personal trainer,” he has been a television icon for more than 20 years. After overcoming a car accident that nearly took his life, Little learned how to turn adversity into victory. Known for his wild enthusiasm, Little is responsible for revolutionizing direct-response marketing and television home shopping. Today, his company has sold more than $3 billion in products. Reach him at [email protected].