We’ve talked about why you should hire out sourcing here, but in case you want to dive into this yourself, here are some things to look at. A common question when looking for manufacturers for your product is whether you want to source domestically or from overseas.
You likely already know that it’s almost always cheaper to source your products overseas, but there’s a lot more to that decision than just the upfront investment and cost per unit. Things like quality, shipping, and time to delivery are other items to look at and can change how you might decide on a manufacturer.
If you are just looking on your own, some of the best resources for finding manufacturers can be free online supplier directories. These directories can contain profiles for hundreds, or even thousands, of manufacturers, wholesalers and suppliers. There are many for domestic and overseas options. Looking through the sea of options can be a bit overwhelming.
Making sure your idea is protected when discussing it and that the technical requirements are understood is very important when finding the right supplier for your product. As an area of expertise, we can support you through this and make sure those conversations are started with the right information. Domestic and overseas sourcing have their advantages and disadvantages which we will look at below:
Domestic Advantages
- Higher manufacturing quality and labor standards
- Easier communication with no language barrier
- Marketing appeal of being made domestically
- Easier to verify reputable manufacturers
- Faster shipping time
- High intellectual property right protection
- Greater payment security and recourse
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Domestic Disadvantages
- Higher manufacturing costs
- Higher setup costs
- Less manufacturing type choice
Overseas Advantages
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- Lower manufacturing costs
- Lower setup costs
- High number of manufacturers to choose from
- One-stop services like Alibaba have made it easy to navigate suppliers
Overseas Disadvantages
- Lower perceived quality from customers
- (Usually) lower manufacturing and labor standards
- Little intellectual property protection
- Language and communication barrier can be difficult to navigate
- Difficult/costly to verify manufacturer and visit on-site
- Longer shipping time
- Cultural differences in business practices
- Product importation and customs clearance
- Less payment security and recourse
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Things are changing in every market, and always will, making what would be a good decision today possibly be a bad one in the future. For the US market, Canada and Mexico also offer similar pros and cons as domestic, but the US dollar is stronger, so these are sometimes cheaper than the US.
The costs of manufacturing in many countries in Asia is increasing, as is labor costs. When looking at the European manufacturing market there are many options that compete very well with US and Asian manufacturers.
When researching options, it’s important to look at the specific needs of the product being made, where it’s being sold, and other logistics and costs that happen when taking a product from a manufacturing document to a product in consumers hands. We source the right suppliers and vendors for you and your product or business.
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