Business Tech

Manufacturing Tips for Small Business Owners

For small businesses around the world, the process of delivering goods to consumers often requires entering into the world of manufacturing contracts. Small businesses and manufacturers often rely on each other to do business — Entrepreneur reports that 24.8 percent of all manufacturing sales are made to small businesses. Bearing this in mind, here is a look at some tips to help you establish your manufacturing supply chain:

Domestic or Import

If you are just starting out, cost may be a prohibitive aspect of establishing a manufacturing supply chain. In general, you will find more cost-efficient manufacturers overseas. Asian manufacturing companies create many of the low-cost, mass-produced products you see in big-box stores around the country. This is because labor and product costs are low and the competition is vast. For many small businesses, this is a good choice.

However, there are still many advantages to dealing with domestic manufacturers. Contracting domestically gives you more direct access to your product's manufacturer. For those who deal in niche items, buying from domestic manufacturers can save you many headaches down the road. Additionally, American consumers prefer American goods — Apple Rubber reports that 80 percent of U.S. consumers prefer American-made products to those made overseas. Using local manufacturers can improve your business' reputation with consumers, and global trends are starting to buck the “Made in China” model of business.

Online Manufacturers

Manufacturers around the world often sell their goods to distant markets through online marketplaces. Dealing with manufacturers online has its pros and cons. On the one hand, a single Google search can turn up thousands of potential contract manufacturers with bargain prices. Entire websites like Alibaba exist solely to connect you with smaller manufacturers. These sites connect you directly with manufacturers and let you explore their catalog of services before you commit to anything.

However, not every manufacturer can live up to the promises they make on their website. It's important that you do the research on any manufacturer online that you are thinking about doing business with. Read their online reviews, ask questions and reach out to other businesses that have used their services. While there is tremendous value to be found in the online manufacturing marketplace, you should know not to trust something just because it is on the Internet. Do your research and don't let the bargains blind you.

Healthy Competition

Once you've narrowed your choices down to a few manufacturers, request quotes from all of them. Competition is fierce among smaller manufacturers looking to build their operations, so if you don't like their offer, tell them you can get it cheaper somewhere else. Although you may not be making a huge purchase, the competitive environment of the manufacturing industry means you can often score a great deal with a manufacturer early on in your contract. A better deal means more profits and more growth, which can lead to larger contracts between you and the manufacturer down the road. Growing you business means thinking like a big business, and negotiations with manufacturers are part of what it takes to build an empire.

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