A Guest Post by Pedro Calcono
Contract manufacturing or outsourcing is the practice of transferring the production of goods to manufacturers in the other country instead of handling it locally in order to reduce the costs and expenses incurred in production. For instance, the raw materials manufacturing costs such as wages of workers will be lower in a country with low cost of living. Thus, it is reasonable to outsource the production of such a country. Various Affiliate Site provides a way for you to start your own affiliate marketing business whereby you advertise other people’s products and get a commission for every sale. Below is a list of six things that should be done to move contract manufacturing into eCommerce.
Design Products Over Requirements
The first step is that you must have a definite idea of the product, the specifications, designs, color, quality, quantity, and other key details. This will help you in getting the right manufacturer for your products and not jack-of-all-trades with no specialization in your particular a niche within the industry. It is better to have a prototype of the product to guide the manufacturer in knowing what exactly you want and if he can manufacture it. This helps you choose the right manufacturer more easily and quickly and can also help in getting the best deal in terms of quality and cost; it is advisable that the manufacturers sign nondisclosure agreements to protect your idea before sending the designs and prototype to them in order to prevent a copycat.
Choose wisely when it comes to picking a Manufacturer
A look at the industry will show there are many manufacturers capable of producing your product. This means you have to choose and choose right. Manufacturers can be found in two ways, either through tradeshows or online. Tradeshows are organized for various industries and designed to bring together those in the field and connect business owners with manufacturers. This makes it a great place to find a manufacturer for your product. Sourcing for manufacturers online is much easier, faster and affordable to business owners but it requires a higher sense of caution. You must examine the manufacturers thoroughly before choosing and unlike tradeshows, where the manufacturers are usually vetted, manufacturers chosen online are usually at your own risk. Therefore, you have to be extra careful. Websites such as Global Sources and Alibaba produces a list of manufacturers who are verified by the website for business owners.
Create a well-defined contract before moving forward
After choosing a manufacturer, the next step is drafting a foolproof contract outlining good specifications, nondisclosure, copyrights, quality standards, etc. Most countries have their own rules and regulations regarding contracts, and it is important for you to be conversant with these regulations and how they apply to your agreement with the manufacturer. Stipulations that are usually included in the contract includes the cost of production, time of production, quality of materials to be used, the time limit for production, method of payment, quality monitoring process, etc.
Set up a Proper Payment Process
Making payment for overseas transactions is a complicated process fraught with many risks. There are, however, several safe and secure means through which payments can be made. They include Bank transfer, Escrow, Letter of credit, Alipay, etc. Bank transfer is fast, easy and typically cheap but very risky and thus not advisable to use until you have established a solid relationship with the manufacturer. Escrow service charges a fee to help you hold and later transfer money which you pay after placing an order, the manufacturer is aware of your payment but cannot access the money until you have received and approve the goods. For letter of credit, it can be acquired from any bank in which you operate an account. It is a secure but expensive means of payment which is best used for large payments.
Engage new marketing strategies and the latest technology for effective results
By taking advantage of the new technologies, you can create new marketing strategies that will aid your sale. Digital marketing is relatively cheap and very effective as it reaches the widest range of people with minimum effort. These strategies include using social media networks such as Facebook, Instagram, and Twitter. Search Engine Optimization, which will put your product at the forefront of the search page, Blogging, Pay-per-click advertising, etc.
Quality assurance by monitoring and managing production
It is not enough to pick a contract manufacturer with a reputation for producing quality products and to send a prototype; you must take an active part in the production through monitoring in order to ensure the product is in line with the quality you have in mind. The monitoring can be done through a purchasing agent or buying company, which will act as an intermediary between you and the manufacturer. They are usually located in the same country with the manufacturer, which means they can carry out inspection of the factories and also, the goods being produced to see it is up to the required standard.