Overseas manufacturers are interested in one thing when it comes to working with new businesses: large order volume and long-term customers.
That presents a problem if you’re a small eCommerce store just starting out because beginning eCommerce businesses start small and there’s no guarantee you’ll keep the business going for years (other than your unshakeable motivation to succeed, of course).
Searching for manufacturers, you might have experienced that many manufacturers have huge order minimums, won’t budge on those minimums, and prefer to ship out orders by the full container load (20 pallets worth of product) rather than a smaller order measured by the pallet.
It makes sense for the manufacturer, bigger orders and more frequent orders means more money over time, which leaves smaller sellers at a disadvantage.
In this post, we’ll go over some tips that will help your initial search for a manufacturer in order to get a smaller first order to launch your eCommerce business.
Don’t Give Away That You’re a Small Seller
I’m not saying you have to lie and that you’re part of a multi-billion dollar conglomerate that has every big box retailer as your main customer, but you don’t have to open up your first message to a manufacturer saying how small your business currently is and that they shouldn’t expect multiple-container sized orders from the get-go.
Your first message to a potential manufacturer is the most important.
In it, you set the tone of what kind of business they believe they’re dealing with, what they can expect of you now and in the future.
With that in mind, let’s look at some great things to include in a first message, vs. things you should not include:
Good things to include in your first message to a manufacturer:
- Inform them that you are a brand in your specific category looking to make a big impact.
- Let them know that you are looking for a long-term manufacturing partnership and you will be around for many years.
- Let them know of any experience that you do have, whether it be previous eCommerce experience, business experience, or expertise within your product category.
- Let them know that you are looking for an exclusive manufacturing partner within a product category to let them know you won’t jump ship to another manufacturer later.
Basically anything you could say that lets them know that you either have immediate value or potential long-term value goes a long way.
While you don’t have a lot of initial value to a manufacturer if you’re a newer business, letting them know of your potential is the best way to go about things (other than straight up lying, but there’s many good reasons you shouldn’t do that).
Things that you SHOULDN’T include in your first message:
- Ask what the absolute smallest order they can do for the particular product you want.
- That you’re shopping around for different manufacturers.
- Letting them know that you are just starting in the world of eCommerce.
- That you’re changing from a previous manufacturer.
- Any unreasonable demands like only potentially working with them if they make a special exception for you, will only accept one price for your product, or
Basically, anything that shows you will jump ship to another manufacturer at any moment or that you have very little initial or long-term value to the manufacturer is something you don’t want to initially let them know about.
Again, you don’t have to lie, but sending potential red flags out in an initial message will not inspire the person on the other side to even respond to your inquiry.
To Get a Smaller First Order, Use Potential as Incentive
If you’re a newer seller, you don’t have much to offer to anyone just yet.
So, your biggest advantage to get a manufacturer to start working with you is your potential as a long-term partner that will eventually make more consistent and bigger orders as time passes.
Manufacturers are trying to grow their business, too, and they know they all can’t land mega-deals with huge retailers every day, so a lot are okay with starting small, but only if they have some confidence that working with you will eventually net them big orders.
As mentioned in the previous section, highlighting your potential to be a big customer in the future can be all you need to get those first smaller orders placed.
Ways to let a manufacturer know you have potential
- Let them know of any previous success you have, any expertise or experience in your product category
- Let them know you intend to shake up your product category with innovation and you will be around for a long time to make an ever expanding product line.
- Let them know you’re looking for a long term partnership to get your products made.
- Position yourself as a brand rather than just a person browsing manufacturers. Good branding works on manufacturers the same as it does on potential customers and can only help.
Whatever line or tool you have at your disposal to appear professional, part of a big brand, and that you will be making ever-growing larger and larger orders as you work with your potential manufacturer should be enough to get them excited to start working with you, and be a bit creative to get a smaller order made for you to test the market and validate your idea.
Talk to as Many Manufacturers As You Can
While you shouldn’t be telling each manufacturer that you’re talking to as many potential product partners as possible to get the best deal, you actually should be contacting as many manufacturers as possible.
A good manufacturer is an essential pillar of your eCommerce business. If you don’t make a good product, your business simply won’t last.
No matter how good your listings, branding, marketing, and advertising efforts are, people eventually will sus out a poor product and stop buying.
For that reason, you should be talking to as many manufacturers as possible. You need to determine not only their quality of communication and willingness to work with you, but also the quality of any samples they can provide for you.
It’s possible a manufacturer is great in every way, but the quality of the products they produce simply isn’t what you’re looking for.
When you talk to many manufacturers, it increases the chances you’ll find one that will work with you, makes great products, and are responsive communicators.
Only Work with Manufacturers that are Great at Communication
Timely responses and an understanding of each other is extremely vital to eCommerce success when working with your manufacturer.
You’re going to be sending your manufacturer a lot of money if you keep working with them and your business grows, into the thousands and potentially hundreds of thousands if you grow large enough.
Sending huge amounts of money for your account manager at your manufacturer to essentially disappear can be nerve racking.
Or maybe something is wrong with a recent order, like there’s issues at the port or with shipping and you need a very important document from your manufacturer that you don’t have immediate access to… again not a fun place to be if they aren’t quick with responses.
When you’re vetting manufacturers, the ones that take the time to answer all your questions and are responsive is evidence that they will be responsive once you become a customer.
Be Firm with Your Wants, But Make Concessions When They Make Sense
Working with overseas manufacturers requires a balance between being firm so you don’t get ripped off, but also being understanding that aspects of the market are unavoidable and you need to make concessions with your manufacturer if it makes sense.
You can ask your manufacturer to do certain things to help get you lower prices per unit, add extra services to your order, delay payments, and other things, but make a judgment call if what you’re asking for is reasonable or not.
For example, say your orders are starting to get quite large and you usually pay 50% minimum up front to get products made, but with large orders, 50% can end up being a huge amount of money. You could ask your manufacturer to lower the upfront deposit for an order because you’ve been working with them for so long, and if they can’t budge on a minimum, ask for a smaller minimum that you will give them initially (say 30%) and you will give them the additional 20% in 2-4 weeks as you bring in more cash, then pay off the remaining 50% balance when the products complete production.
If you’ve worked with your manufacturer for a long time, there is a lot they will do to help keep the orders coming in from you and retain you as a customer. Don’t abuse the relationship you’ve been building just because it can net you a few extra bucks, however.
By the same token, if your manufacturer suddenly informs you that everything they’re making for you is doubling in price, ask them to explain where the price increase is coming from, and if the increase does not seem to match up with their explanation, you have to put your foot down a bit and have them come down in price.
Again, it’s all about staying within reason and being understanding, but also making sure you’re not getting taken advantage of.
Remember, you’re going to be working with your manufacturer for a long time to come. You’ll likely have a main account manager who you will be communicating with a lot, so keep in mind that they are a real person who has their own obligations and responsibilities to their business, and they are not just an obstacle to your business that you have to defeat to keep your costs low.
When you have a mutual understanding that you both want to succeed in the market and that your success equals their success and vice versa, you will both come up with ideas to benefit both businesses and navigate the ups and downs of the ever changing eCommerce world.