Bigger Scale Manufacturing

 

Outsourcing Workload to Grow Your Business

 

Lesson Info

Bigger Scale Manufacturing

I kind of get some kerfluffle. Bigger scale manufacturing usually means going overseas, and that's how I describe it a lot of the times in my, you know, talk. I think the title probably could have been Going Overseas for Manufacturing at one point, and a lot of people say, well, why don't you just go to the US? Like, what, you're trying to get it so cheap? And just for historical reasons, we don't still own a lot of the machinery that we used to. So I have a friend who was working on getting or considering getting socks mass-produced. We still have the machines to make some kinds of socks. I think we don't, I think what she said, don't quote me, is that we no longer have factories that will produce color work in socks. We had textile mills in like the 1700s. When they broke down and wore out, they sold off that machinery. So we don't have all of the capability for certain niches of industrial-scale manufacturing still in the country. So, this can be touchy for some people, 'cause it's ...

like, a trade thing. It's like a, why aren't you making it in the US. For sure, most of the examples I've shown you are within the US, small-scale production. For some of the bigger-scale things, we don't always have the equipment to make it work still in the country, and that's just kind of like where we're at right now. So, Alibaba is the site where most, it's kind of like an intermediary point between like going and finding a factory yourself, which is like, really, really hard, 'cause I don't speak Chinese, and a step up from just getting like 100 of something made. So Alibaba is the place where you would go if you want a thousand or two or five thousand things from a factory with some amount of discretion over colors and customization. So, before you do something like this, you probably have been setting aside a portion of your budget for growing. You're going to have to place a big order to do this. I don't think I've ever seen anything below 500, 1,000 pieces. So it's pretty big. What I wanted to have made was, okay, back in the day, I had this really cute notions case. So notions for knitters and crocheters are like, your hook, like, your stitch markers, these little things that go in a case, and I have a case that was shaped like a hippo, and it was so cute. And I have like all these photos of like, my supplies, and there was always this hippo around. And then the company discontinued the hippo. But none of the other cases were big enough to fit a crochet hook in them. And so after like 400th time of being asked, I was like, wait, there's a market for this! I got it! Okay. So I went to get notions cases that zipped closed so you could put 'em in your bag that would fit a crochet hook. That was my mission. And I thought, they look a lot like eyeglass cases, don't they? So you just go and you search, eyeglass case or whatever. And here you go. So, here are some eyeglass cases. This isn't, I actually have no idea. This was a couple years ago, so this isn't like, the original listing. It's just an example eyeglass case listing. And I'll show you my finished product. So this is what I got in the end. My color, aqua, fresh stitches with my logo on it, there you go. So the way it works is you find a product that's roughly what you want, and then you engage in some long conversation procedure about how to customize it the way you want it. We're gonna talk about the pros and cons about how this works. But one of the cons is that it's not always completely obvious what's up for customization. Like, they don't send you... It's not like how we're used to things, right? They don't send you a color card with like, seven, you could have it in one of these seven different colors. It's just like the Wild West. So basically, you throw out all of your ideas, and you see which ones of them they're willing to do. 'Cause you're just ordering from who knows where. It's super advantageous to you to order a sample, and it's really common that the sample is exorbitantly priced. So if we go back, these cases are starting at 50 cents apiece. The sample, it's pretty typically $150, $200-ish for one. Partly it's because they're making one of those things. You know, they're making one that looks customized for you, and partly, I think, they just don't want people ordering, you know, one or whatnot. So, these are the samples I got. This is the first sample. It's a fabric that you could get the impression would get super dirty really fast. I liked it because it was blue and orange, which I had asked for, but you can tell the sewing's really crooked. You can also tell, there's no cover over the back of the spine. It just looks like it cost 50 cents. It was really cruddy. And when I emailed with 'em, they're like, oh, yeah, yeah, no, don't worry. We can fix that. So, okay. Sample number two just looked a lot better to me. They didn't send it in the color I wanted, but it looked like it would stay clean. You can tell the spine is covered really nicely. They were much higher-quality things. So, these samples were each $150, right? So, you're always sort of stuck in like, oh my gosh, do I order another sample of this one in the color I want? And what I ended up doing was saying, here's the aqua. Yeah, just go ahead and send me 2,000 in that color and sort of gambling on it. So, and it worked out fine. They're really pretty and they're really nice. So, that, it's super bumpy, and the first factory was really peeved that I didn't end up ordering with them. The whole system of how one works with factories is very different from how we're used to working with like a peer or someone. Basically, they have no reason to be nice to me. Like, they were trying to bully me into buying from them. They aren't interested in sustaining relationships. So they were like, you wasted my time. You're awful. And that's a totally normal experience for like, everyone I've talked to who's done that, so don't take it personally. So, communication's gonna be super bumpy. There you go. You're going... Okay. So communication is bumpy in multiple ways. The emails that are going back and forth may as well come out of Google Translate. I mean, really difficult. No subtleties are happening in those emails. But also, what's offered in the product listing? Like, can you make the zipper a different color? Can you make the fabric a different color? Can it be a different size? Like, I have no idea what their equipment is. I don't know if it's a big ask or a little ask to make it bigger or smaller. So all those aspects are just not laid out in the way you would expect it to be as a consumer. So, the other thing is, they just ship things. Things may be subject to extra shipping fees that are collected once they've entered the country, or an import duty, and it may be difficult to find out about these costs beforehand. So I know in the case of the cases, the shipping was basically half of the cost, again. So I paid 150% for what I was expecting because that's how much the shipping cost was, and then I had to pay an extra $7.77 when it arrived at the door. So I don't know, I guess they just like, didn't charge enough and then had to pay seven dollars. So that's really hard. When you're thinking about a product, you usually go out thinking, oh, I could charge this amount. It's gonna cost me this amount. And then that's just a factor that you don't really know how to put in there. There's something called anti-dumping duty, which isn't something I hope you have to worry about, but basically, the US doesn't want complete crap coming in. And so if they believe you've been charged far too little, they will charge a tax. It was meant against dumping. They didn't want companies, let's say, importing actual trash to, you know, put in a landfill or whatever. But I have heard cases of that happening sometimes, like, oh, you were only charged 1/100th of a cent for these pencils. No way, they're actually really worth one cent each, and then you're charged the difference as an import tax. And don't forget the cost of the samples. The sample price of $150 was multiple, multiple, multiples of the cost of one of them. So when you're thinking about how much is your product gonna end up costing, how much are, you know, the costs, and you don't know how many samples you need to order. One, you get lucky, three, five, until you really get a product that's right for you. So this more than anything else is a long-term product that you expect, I mean, obviously you expect to use a couple thousand of them, but you're looking into developing something very long-term that you're going to be using again and again, in hopefully multiple stages of your business. So, I ordered like 2,000 of these. It was a lot more than I needed, and so what I ended up doing was a lot of them in giveaways. So it's very hard to sell 2,000 of a thing. But, so some of them I gave away. Some of them I included with like an offer or something like that. So you wanna make sure you can manage the whole quantity of things. You wouldn't wanna get a custom purse handle only to decide next month you're not into purses anymore. Not good. So, that's large-scale manufacturing. I know it's not relevant to most people. Trust me, I know. But it's, it just helps, I think, to have the seed, like, in the back of your mind, because one day, it may be relevant, and you never know. Let's say you're working on a certain item, and it keeps getting more and more and more and more popular. There may be a point where you have to step it up. So it's always worth keeping as an option. Stacy, some folks are asking about ways that you, when we were developing this product, when you were looking at the actual product, the actual, what they were manufacturing from, you know, a toxicity standpoint. That's such a great point, yep. You know, making sure it's safe and met the environmental, you know, things for the US. Yeah, so that is a super, super good point. I have many things to say about it. I'm not allowed to be mean. No. So, the first thing is overseas factories are not subject to our requirements, and quite honestly, if they lie to you, we have very few ways to keep them accountable. So I would be incredibly cautious before going to something that has required safety specifications. If, for example, you're going for something with jewelry, I would almost never trust the certificate that they give you that's saying it's lead-free, and what you can do is take the sample and have it tested. I've heard of cases where the sample they send you is nice, and maybe not the next thousand they send you. So it's a very valid concern to be hyper-cautious about things, some countries more than others. China's a particularly troublesome case, in terms of, you know, trustworthiness of what you're being sent. So, getting it tested is really important. Also, kind of keeping that in mind in the things you're ordering. Maybe you do feel really comfortable with, like, the cases are never something someone was eating, never something intended for babies. So, keeping all of those factors in mind and then establishing your standard for what you need to promise to your customers and making sure that it is the quality that you need it to be. And maybe that's one of the factors that's like, you know what? I'm gonna have to kick it back to a different, you know, more local level of production. Yeah, all of my eyes are made in Japan. They have a much more honest record with like the safety inspections and things like that, and so that's certainly something to keep in mind. 'Cause at the end of the day, you're responsible to your customer. And if you're looking to step up your production with being carried in a shop, let's say a large store wants to work with you, you very often have to submit some safety paperwork to work with a large retailer. And so that may be something where you kind of sneak through for a little bit, and then you hit a certain point in your business, and oh, they wanna see the safety paperwork, do they now, and you're gonna have to fix it. And so, starting well is better than starting not well. Awesome, thank you. Oh, wait, I do wanna say a second thing. And I actually don't know the answer. In terms of the health of the workers and environmental protection, where it's produced, I actually have no idea how to go about finding that information. So that's another thing that, if that's important to your customers, that's really something you wanna think about as well.

Class Description

Most small business owners begin by doing it all. But as you grow, you’ll probably find that you need help. But what kind of help? And where do you go to get it?

In Outsourcing Workload to Grow Your Business Stacey Trock will show you how to navigate the options for getting the help you need for your business. From bookkeepers and accountants, to graphic designers, photographers and web designers, to virtual assistants, to production assistants, to overseas factories, to marketing agencies...there is a whole world of freelancers able to help your business run more smoothly!

In this class you will learn the following:

  • The range of freelancers that are available, and what role they can fill in your business
  • How to write a procedures manual for your business, making the delegation of work as seamless as possible
  • How to hire a virtual assistant and streamline your business into tasks that can be carried out by someone other than you
  • The difference between a contractor and an employee, and the pros and cons of each
  • How to outsource the production of physical items for your shop, including working with local artisans and navigating the process of ordering custom items from overseas factories (via Alibaba)

By the end of Outsourcing Workload to Grow Your Business you’ll learn how to decide what is truly important in your business and what your time is worth.  The secret to successfully turning over portions of your business is to structure your workload into systematic and well-defined capsules, which can be handed off to a largely-independent freelancer; freeing you up to do the things that you really love!

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