…and it is not a good feeling. A month ago I received a letter in the mail from one of our manufacturing partners that informed me that they have decided to resign our account. The letter went on to give us 90 days to find and move to a new facility. It turns out that we are too small for the facility and it is more profitable to have larger accounts.
I pretty bummed out about the whole thing. We’ve been working together for 4 years and they have been a 100% stand-up partner. The people are really nice, the quality of the product is great, and their production is organized. When I first read the letter – my first response was disbelief. But business is business and for the past three months, I have been in a search for a new manufacturer.
I don’t have a background in manufacturing, so finding them, talking to them and picking one is a tough task. We try to manufacture in the U.S. for a few reasons. It is easier to communicate with our partners, we can order small volumes more frequently which is better for cash flow, and we believe in supporting American businesses.
Here are a few tips that I’ve discovered about selecting a manufacturer:
Best place to find them: I’ve found that the Internet, business colleagues, and trade shows are the best places to find contract manufacturers. The Yellow Pages is also a good resource. I’ve learned that finding manufacturers close to our warehouse reduces freight cost which can add up (especially with today’s gas prices).
Go out to bid: After talking to several candidates, I narrow the list down and get three competitive bids for any project. When evaluating bids, you need to compare apples to apples. If one company want to add bells or whistles, have them priced separately. Have your freight costs estimated for your first order and factor it into your total costs.
Check references: When I look for a manufacturer, I’m looking for a partner, so I place a lot of emphasis on client references. When I speak to a reference I have a list of specific questions that cover production quality, pricing/increases, organization/scheduling, and the working relationship. Respecting the reference’s time, I keep the conversation short and to the point.
Do you have any tips that you’ve found useful in selecting manufacturers?
P.S. I am happy to say, that I have finalized my deal with my “replacement” manufacturer, and I am feeling better about being deselected.