In the midst of so many other business activities, the importance of sourcing products from a trusted manufacturing partner can often be overlooked. Yet without successful product sourcing, no e-commerce store will be able to succeed.
Product sourcing isn’t easy. It deserves much of your time and attention — and even sometimes, “the man in the middle” to get everything to run smoothly. There are two keys to a successful sourcing process that must be accomplished before you begin evaluating potential manufacturing partners: clearly defining product needs, and setting realistic expectations for your manufacturing timeline and budget.
Sourcing can be a time-consuming process even when done right. But for inexperienced business owners, overlooking key steps in this process can make sourcing take even longer than it should. So why does sourcing take so long? Here are some common pitfalls to be aware of.
Not Having Set Designs or a Clearly-Defined Product
The biggest challenge in sourcing comes when you don’t have a clearly defined product. This can sometimes happen with e-commerce sellers who take more of a “product tourist” approach. They don’t have a clear direction or end goal for their product development, and as a result they are extremely indecisive, wasting time as they move from one idea to the next.
Even after a seller settles on an idea for what they want to produce, the process can still be held up when they don’t have set designs that they can use to start their manufacturer search.
Remember, the design process also takes time.
If you can’t provide designs and specs, it will naturally take much longer to receive samples and iterate on the design. This could even lead to two manufacturers producing very different goods, despite being given the same guidelines. Set designs makes it easier to compare sample results between different manufacturers when trying to determine who you will use to source your products.
Because of this, developing clear and thorough product designs is an essential first step to ensure that the end result matches your vision. Detailed specifications are especially important when using an international manufacturer. Otherwise, language and time barriers could make it even harder to define what you want the final product to be like.
A strong design could be a powerful differentiating factor in and of itself that helps you better appeal to potential customers — so be sure to give it the attention it deserves.
Lack of Consumer and Competitor Research
As part of the process of defining your product, consumer and competitor research are essential. Knowing what is already available on the market and what consumers want must shape your product design. These findings can even reveal key details that influence sourcing products — such as color, usability or even scents for products like candles and soap.
An essential part of this research is determining how much customers are willing to spend for your product. This can be accomplished through customer interviews and evaluating market prices of goods similar to what you plan to produce. Determining the proper pricing model will help you set a budget for how much manufacturing should cost for your business to remain profitable.
Without this crucial information in hand, a business could woefully overestimate how much they can successfully charge for their product. As a result, they might partner with a premium manufacturer and then find themselves left with product that won’t sell until it is discounted to a level where they are actually losing money with each item sold.
Quality consumer and competitor research takes time. But without an understanding of how to competitively price your products for the market, you run the risk of allowing sourcing to become a major cost sink for your business.
Unrealistic Budget and Timeline
A final challenge in the sourcing process comes when a business sets an unrealistic budget and timeline for what it wants to accomplish. Simply put, there is a big difference between sourcing an existing product from a manufacturer and creating a brand new product from scratch. White labeling (which involves minimal alterations to an existing product) will always be much faster and cheaper than manufacturing a brand new product.
A clear budget and timeline will help you choose the right sourcing plan for your business. For example, off the shelf white-label products will typically require three to four months of development, with costs ranging from $5,000 to $20,000. For a more heavily customized private label product, development will take five to 12 months, and costs can range from $20,000 to $100,000.
Understanding how much you can afford to spend — and how soon you need to launch the product — may ultimately influence your design specifications and product goals. That being said, the additional investment that goes into creating a 100 percent custom product can be well worth it, as you will be able to better differentiate your product from the competition.
Brands would do well to determine which type of manufacturing best fits the needs and goals of a particular product launch, while being mindful of their available financial resources.
How Manufactured Can Help
Successful product sourcing ultimately depends on your ability to develop a clear product vision, budget and timeline. With these crucial factors in place, you are well positioned to work with Manufactured to find the right manufacturing partner to ensure a successful product launch.
With over 500 vendors from 25 countries across the globe, our team can help you handle your sourcing relationship with ease, taking care of key tasks like vendor quoting and negotiation, shipping, warehouse coordination and more. Our expert team can also help you handle the logistical challenges that come with manufacturing internationally so they won’t be a roadblock to success.
We will help you find the best sourcing option (such as white-label vs. private-label), and the best manufacturer based on your project specifications. And if you are creating a customizable product, we can handle sourcing and development to turn that vision into reality. With a strong plan and the right manufacturing partner, sourcing can be much easier and faster than ever before.
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