Samples and production

As I had talked about earlier, I had found a contract manufacturer I was working with to create my product. Since I have posted, I have had two samples created. The first one, done from drawings I had created. After receiving the initial sample I made changes and had a second sample created.

Needless to say I was blown away with the quality. Of course with that quality comes a higher price per unit, plus import duties and shipping. I have put in my first order of 1000 units, which will take 30 days production time and 30 days on the water.

Realize that you, as the small guy, will get less "love" from the contract manufacturer then their established clients. You need to push and push to get them to get back to you. Its a test in the way, as until you order something, you are a cost center.

Keep persevearing and you will get your product made. As I get closer to launch, I will let you know how it goes.

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!

Contract Manufacturers

After much explorations I made my first outreach to contract manufacturers. While I found several on the web, it was old fashion paper that helped me out the most. I went to the local library and found a manufacturing directory. Don't discount your local library's reference section. This was in a local township library that I found it, not a huge big city library.

I proceeded to look up the companies and see if they have the ability to create my product. I have a lot of faith in one as on their website they have link directly to OEM/ODM services. You have all heard about OEM's, Original Equipment Manufacturers, think companies like Dell and Apple that make a product. What most people don't realize, is many times behind that OEM is an ODM.

ODM stands for Original Design Manufactuer. Ever notice that a lot of your electronic products look very very similar? That is because they are all made by the same "Original Design Manufacturer" in China. Foxconn makes a majority of the cell phones as well as the ipods and iphone. Quanta makes a majority of the Laptops for companies such as Apple, Dell and Acer.

ODM's are different than a contract manufacturer, because the ODM will actually take your drawings or concept and design your product for you. A contract manufacturer will just build to particular specifications. ODM's are key for those of us starting out early in business.

I will be calling the manufacturers over the next couple of days to ascertain whether they can build my product and for how much. Currently I have asked the question of:

Do they provide contract manufacturing services?
Can they build and develop protoypes off drawings?
What is the cost per prototype development?
Material costs?
Manufacturer value added if not included? (MVA is a fancy term for labor and B & C components like wired and solder.)
Set up and tooling costs and whether existing tools can be adapted? (If they can adapt your tooling and set up costs should be less.)
Minimum lot sizes
Pricing on small and large lots?
Acceptance of payment through the use of credit card? (Important since they would not provide trade terms for a "new company". Might as well get the points.)
Shipping (Understand how they will ship your product and when you take risk of loss. Especially important if shipping internationally.)

Other questions I will ask is whether tooling and set up can be amortized over a particular production run. I will let you know what I find out so you can ask the same questions of your contract manufacturers. Wish me luck!

The Big Idea

As you know, I like to post videos of small business start ups and owners. I found this one recently, for the "Big Idea with Donnie Deutsch". Listen to what the entrepeneur says. I did it on my own. I learned from the ground up. Everyone told me I couldn't do it. And bye the way, she is only 25 (at the filming of this video). I gotta be candid, I am curious to try this product as I am a prodigeous snoozer. Aloha!

Still Here...

So I know it has been a while since I posted and I wanted to apologize to those who check out the site from time to time. Life intervened and I was not able to work on the business idea. I finally got my drawings back from my friend, and it looks darn good. A lot better then my pencil and pen drawings on blank paper. She did it in illustrator which provided a PDF I can provide to potential manufacturers.

LLC... God am I confused. So much conflicting data right now and trying to figure out where to domicile the entity is driving me nuts. I talked to my sister and brother and law and I will include them as 2% owners so it is not a single entity LLC. This should provide greater liability protection. Also, since they would be the beneficiary of my shares in the event of my death, it makes sense.

Now, where do I domicile it. I originally looked at Nevada for a variety of reasons. I then decided Illinois since that is where I am living at the moment. But there is possibility of moving back to California, this could screw things up of course. I may just break down and to the Nevada LLC, since it is cheaper, and they do not release the name of LLC members, go figure a state started by the Mob...

Either way I am hoping to find out this week if this company will be interviewing me in California, which will further determine how I structure. In all reality I just need to stop fooling around.

Review of my first Prototype

So I finally got to spend time with a friend and show my initial prototype to him. The response was very heartening since he is my target consumer for this product. What made me happy was that we were essentially on the same page.

As he initially asked me to tell him about my business plan/product idea, I pulled out the prototype. "Oh wow you have one made? Awesome!" I had left one feature out that I wanted to put in, and it was one of two suggestions that he had to make it better. We also discussed a couple features I was thinking of but was hesitant, and he confirmed my hesitation by giving me the reasons to avoid those.

As we talked about production, pricing and distribution, I got him excited about it as well. He has already told me when it is made, he will buy one since it is exactly what he has been looking for for several years.

So now I need to move forward faster. I need to reach out to contract manufacturers and figure out pricing, quantity, set up fees, etc. What I am hoping is, with business down around the world, there might be excess capacity they would love to use. Maybe an advantage of a recession/depression.

Contract Manufacturing

The misnomer many people have, is they have to figure out how to make their product. No such thing, there are firms that specialize in taking your prototypes and making them workable designs. There are multiple places to search for companies to make your product. It all depends on whether you want it built on-shore or off-shore.

http://www.thomasnet.com/ This site was brought to my attention by the 4hww. Great site and it allows you to search for specialty manufacturers.

If you do not mind having product built and manufacturers in china, taiwan and other over seas inexpensive labor areas you want to check out http://www.alibaba.com/ . Alibaba is a public company that is a B2B aggregator.

Right now these are the two best sites I have found to search for your contract manufacturer unless you include google. You would be suprised.

Prototype Update

So I was supposed to have a friend review my prototype. Go figure he gets sick and our dinner gets cancelled. Well even though I was not able to get his review, I will work on getting in touch with manufacturing companies this week to make my product.

I have been working on a letter to send to various product companies that asks the various questions such as, can they make custom products, minimum lot sizes, any set up fees and how much per piece. I will work out the details further and post this week.

Another Prototype

Just a quick post. I made a second prototype last night. I am supposed to be meeting my friend for Dinner tonight (if his flight gets in on time). I am hoping to get his input and see what suggestions he would make. This week-end I will provide some of the search resources available to make your product.

Ugly

Ok, my first prototype is done and let me tell you, its ugly. Your prototype will be ugly too. Prettyness is not the point of this exercise. The point is to create a mockup, so companies that are paid to make products for you can make it pretty. Mine was made up of a combination poster board, tape, tape, tape and tape. Packaging tape became my friend this go around.

My next step is a critique of my product from an actual user I would be targeting. Hopefully I will see him at the end of the week and get his take on my first mock-up. Again the importance of a mock-up was shown when I created it. I changed some design schemes on it to make it easier to use and make things more consistent.

Next I will start doing a search for companies that can create my product. That will be the next post.

Prototype Update

Ok I have not finished my prototype yet. I am quite disappointed in myself as I wanted it done by now. Other issues came up that allowed me to push it off. Horrible excuse. This is the procrastination bug that gets me in trouble. I need to work on it tonight as I have several appointments (including an interview) this week which will make it difficult for me to finish it if I don't start now.

In addition, one of my friends, who would be the target market for the product agreed that it would be a good idea. I need to pass the protoype by him too so he can tell me what he likes and doesn't like about it. Right now the product he is using is quite a bit more expensive and bulky, hence the value add of my product.

I will keep you updated on my progress.

Prototype Update

One reason I recommend a prototype, is once you start creating the mock-up, there is more work then it may seem at first. We all have a lot of ideas in our head about how we want to make, and design our product and what features we want in it. When building a prototype, it forces you to finalize how you want it to look, and what features you want to settle on.

If you look at Myers Briggs, I am a typical ISTP, and the P is what gets me in trouble sometimes. The desire for more and more information before we can finalize a decision can paralyse us from ever finishing something in good time. Anything that forces me to make a decision, even with incomplete information sometimes, is never a bad thing. Those who are strong J's will not have this problem.

So I went to Walmart today and picked up poster board, craft knife, velcro strips and a ruler to start building my prototype. I could have gone to any store, I just happened to be there for an oil change, kill two birds with one stone. I already have packaging tape and other supplies that I can build the mock-up. I will keep you informed as I build it out.

edit:
Wow, was going through my RSS feeds and found this article that agrees with the need to "sprint" sometimes.
http://www.typepad.com/services/trackback/6a00d83451b31569e201116853a67e970c

The Prototype

I will eventually share my business product with you after I have it set up and established. I will even link to the product description. Who knows, you may want to try it as well. While you may ask, why won't you tell me the product, I have several reasons.

First, as this is my first idea, I am probably slower then most, and do not want an enterprising person coming out with the product before me. Second, the process I go through can apply to any business, but will still need to be customized to your particular product.

I will tell you where I messed up, what I would change and how I would do things differently. I want people to learn from this blog, and feel free to ask questions. Most of us would love to have a seasoned business pro tell exactly how to do things. Isn't the journey half the fun though?

So I have my idea. It is one I have been thinking about for quite a long time. My idea came from, there has to be a better way to do this. In my mind I have knocked around ideas, how I would change it, what I want it to look like, feel like, and how heavy. What features I want. That is all great and dandy, but how about creating the prototype?

Yes, mock up what you want the product to look like. No, you do not need to have a degree in mechanical engineering. There are plenty of people out there that can do all of it for you. I will be making my prototype out of things you can get at Walmart, Target, Office Max or any other consumer goods store. Craft stores are great places as well. I already have scissors and duct tape (what isn't it good for) at home.

Using cardboard, plastic, tape, and time, I will create a mock up of what I want my product to look like. This is important for several reasons. First, it allows you to look at it and say, ummm, no I don't think that is going to work, I need to change X, Y and Z. It also gives you ideas for other features to add or those to subtract.

You will also need this prototype to provide to contract manufacturers to create your product. I suggest doing multiple mock-ups as you will most likely need to provide it to several companies as you weed out who is willing to do the work for you. I use the term contract manufacturer loosely as it can include anything from paper manufacturers to steal and aluminum fabricators.

Because I also work and do consulting on the side, this will take me a while to build out. But that doesn't need to slow you down with the other things you need to do. I will keep you informed of my progress as well as continue to post about the other things I need to do as well. Keep brainstorming!