By: Robin Schaffer | 1st March 2016
Making the choice whether to use an offshore manufacturing agency or to facilitate the manufacturing process yourself is like choosing between a travel agency or arranging your own hotel, flights, on the ground transportation and destinations. There are also a host of other things to consider such as required vaccines, visas, and language difficulties. For the experienced traveler who has the time to do it on his or her own, an agency may not be needed. That person may already have a preferred airline, a choice list of hotel booking sites, and an idea of the type of places he or she would most enjoy visiting, making the planning process simple and even enjoyable. But for a novice, the amount of options can be overwhelming, and money is often wasted because the new traveler simply did not know about the types of deals to look out for nor about the things to avoid.
A lot of time is also spent on research, but while researching for a trip can be a fun experience, searching through countless vendors to custom manufacture your product is not and losing money in the manufacturing process by choosing an unreliable vendor, picking needlessly expensive materials, having product delays or poor quality control is a blow that a company, especially one just starting out, may not be able to withstand. Apart from the risks, a company must also consider other related issues such as Intellectual Property rights and certifications.
The decision to hire an offshore manufacturing agency, much like the decision to choose any mediator to provide you with a service, can save you money and time while offsetting risk. Experience is invaluable, and having an agent guide you can ensure that you get the best from your manufacturers.
As a mediator a manufacturing agency charges a consultation fee that may be broken down by services or be covered as a one initial startup fee. So how can a manufacturing agency save you money if they charge you for their services? Good agencies have networks of reliable vendors with whom they will be able to negotiate a reasonable price. They will also know what to look out for during the vetting process so that the best quality vendors are chosen. And don’t undervalue the importance of experience! Agencies know how to effectively resolve problems that may come up during the manufacturing process and how to prevent many potential issues in the first place.
Agencies play an even bigger role overseas. To save costs many people outsource their manufacturing. Offshoring to China, for example, can actually reduce labor costs by 80%. But the cost of vetting vendors, factory visits, translation services, legal services with contracts and Intellectual Property Rights, as well as shipping and overseeing the logistics of the entire process can be very expensive. The potential for miscommunication and slip ups is high. If you will be outsourcing certain services anyway, it may be best to hire an agency to cover the entire process from A to Z. It can actually save you money in the long run.
The time that you will save may be the greatest benefit of hiring an agency. It could take weeks to vet manufacturers, months to oversee the manufacturing process. As they say, time is money, and that is valuable time that could have been spent on growing your business and marketing your product. In the case of finding the right overseas manufacturing partner, even more time is needed as a representative will need to spend days traveling to the factories, hours finding a translator (assuming the representative does not speak the local language), and even more time on the phone to discuss the logistics of the manufacturing process. Even if you decide to manufacture your product locally, you will still need to take the time for vendor selection, negotiations, and overseeing quality control. Hiring a trusted agent to communicate your needs to the vendors and oversee the manufacturing process leaves you free to focus on other aspects of your business.
But if you are starting out and need some guidance, then perhaps your company could be best served by hiring an agency to help you offset the risks involved in manufacturing your product. Even as an experienced entrepreneur, if you don’t have the time to oversee the manufacturing process or if you feel that your time could be better spent in other ways, then a manufacturing agency may be for you.
Sourcing overseas, with its award winning service, is a leading provider of end-to-end offshore manufacturing setup and consulting, working with brands from all across the globe to setup and manage their offshore manufacturing supply chain and ensure that their goods are made properly, at the highest quality standard, and delivered on schedule.
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