Monday, September 7, 2009

Contract Manufacturer - Update

As you reach out to contract manufacturer's, there will be up days and there will be down days. Frankly, my conversations with the first two contract manufacturers, left me disheartened about this project.

The first company I talked to said, go find a designer to make a prototype then we will see if we can make it for you. And oh ya, budget $5,000 for tools, dies and forms. Hmm, if I am gonna go out and have my own prototype built, then I will bid the business to the lowest bidder. At best this was a, if you run through all these obsticles, maybe we can do business with you.

The second company, I had more hope for. This is a product they are supposed to specialize in. Their website was beautiful. I provided drawings, and they came back 3 days later and said, sorry, we are not going to bid this project. To complicated. At this point you start to second guess your idea. Stop! This is normal, but will admit, I was at a low point.

Finally, I found a local company, in all places a state manufacturing directory. It is close to where I live too. Sent an informational request, and set up a time to go in and see the sales manager. Already I got good vibes.

The sent me a copy of their Non Disclosure Agreement that was surpringly in my favor. I made some slight changes, and prepared for my meeting. I created cardboard prototypes and sent an agenda for the meeting.

I sit in the meeting, we each sign the NDA, and frankly, it was a breath of fresh air. The salesperson knew what I wanted, we talked about minor changes, material selection, and marketing strategy. We discussed the pro's and con's of various materials, and even better, I got him excited about the product as well.

It doesn't stop there. As we discussed more, he mentioned since it will be a virtual business (no storefront), they can warehouse the product for me at a nominal charge, and even handle mail fullfillment. This is great as I had planned to fullfill myself until I had enough volume to talk to a fullfillment company.

Even better, he offered to put me in front of third party retailers that order through them already, with the hope of getting a spike in sales volume early. They mentioned bringing the product to trade fairs they participate in. They do this to show their manufacturing abilities, but it is also free marketing.

At this point I am completely stoked. I couldn't ask more from a partner. Right now, he is having their designer take a look at my crude prototype and drawings, to figure out pricing. Once that is determined, it should cost me a few hundred dollars to make a few production prototypes and then it is off to the factory for production.

Meeting in person allowed him to see my passion and seriousness. It allowed us to talk about the design philosophy, target customer, and for him to see I did my homework. Go into the meeting, with a crude mock-up. The salesman told me, people seldom come to meetings with them, and it is very helpful at determining intent. It also shows you are serious.

While production costs are important, find a good partner, and try not to nickel and dime them. Be honest and upfront as they may be able to help you more then you think. As for payment, he mentioned a deposit up front. I agreed we had not progressed enough to look at trade terms, my only request is to pay by credit cards to get my points.

As it is, I should hear in a week about initial production cost estimates. We can then tweak design or materials to lower costs. Once we have agreed, they will build a shell prototype, and send material samples. I will then decide on material, and have a production sample created. I expect this to take a month so will update you as things change.

Charge ahead and conquer!

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