There are two reasons to use overseas private label manufacturers: First, because it’s the most scale-able way to source products for your online business.

Second, it gives you the highest profit margins. You can bring any business idea to life by figuring out which private label manufacturers to work with and how to manage that manufacturing process.

Where Can You Source Private Label Manufacturers?

We recommend sourcing overseas from Alibaba.

As of 2014 Alibaba is the worlds largest eCommerce company.  That includes both Amazon and eBay combined.  It’s also the largest supplier directory…meaning your most likely to find the best and worst suppliers there.

If you haven’t already check out the video below to learn how to open your first Alibaba account.

Click Here to Open an Alibaba Account!

Advantages & Disadvantages to Sourcing From Alibaba

Manufacturing costs are low in China and the largest business expense is usually the cost of goods which is why most people turn to overseas manufacturing. There is a common misconception that products from China are cheap or produced unethically.

You can choose to work with incredible manufacturers that only have excellent manufacturing processes and have been inspected by Alibaba.

There are a number of advantages and disadvantages to using Alibaba and working with manufacturers in China for your products:

Advantages:

  • Thousands of suppliers to choose from
  • High quality products from specialized manufacturers
  • You can order and negotiate small test quantities
  • Low manufacturing costs and increased profitablility

Disadvantages:

  • Slow communication because of language barrier
  • Longer shipping time or expensive expedited shipping
  • Perceived lower quality from customers

We created an incredible guide to help you navigate the disadvantages to buying from overseas manufacturers. Every single one of these disadvantages can be eliminated with some patience and proper selection practices.

Be Safe on Alibaba: Easily Avoid Scams, Middle-Men, and Fraud

What’s the next step?

Turn Your Ideas Into a Private Label Business

You see, I faced the same problem as you seven years ago…

Look:

I had the idea to produce the first leather watch strap without holes and needed to figure out how to manufacture it.

Before that first year of sales, it took us about five months to manufacture a prototype.

Creating my private label product - new watch strap design

Watch strap I invented

I’ve launched eCommerce stores with custom products that have generated over $23,000 in sales in under a week, one product was the Conor McGregor “F You” suits.

And helping people find private label manufactures in China is what I do full time through Sourcify, the world’s fastest growing sourcing platform.

But enough about me, let’s learn the ins and outs of starting a private label business.

The first step to figure out is this:

“How much will this cost?”

Step 1: Find Your Exact Manufacturing Costs from Multiple Sources

When you start trying to manufacture a product in China, you’ll wonder whether or not you’ve found the perfect factory.

In fact, once you get quotes in from factories, you’ll probably wonder why one factory quotes $3 while the other is quoting $6?

Here’s the deal:

The main reasons quote variances exist among factories comes down to these four reasons:

  • They are utilizing a “partner” factory
  • Suppliers don’t think you actually know what price you should be paying
  • The factories don’t usually produce this type of product
  • The quality they produce at is much lower than the standard

You need to get 3 to 5 price quotes per product you want to manufacture and these price quotes need to come from different factories.

Organizing logistics and getting price quotes is a month long process. It’s why many people would rather use Sourcify.

Verifying if a factory is legit is a whole different step and there are due diligence measures you need to take to confirm a factory.

Be Safe on Alibaba: Criteria for Choosing the Right Supplier

Helpful Tool to Find the Best Private Label Manufacturers

If you’re using Alibaba to search for factories, the best tool to utilize is FactoryConfirm, a Google Chrome extension that uses data analytics to see the likelihood of a factory being legitimate. There are some main giveaways that can help you understand if a company is actually a factory:

  • Does their name have the words trading, industry, or technology in it?
  • How many product categories do they manufacture in?
  • What does their business license say?
Working with Private label Manufacturers in China - Ask for their business license

Chinese Business License

These questions are a good starting point for you to analyze a factory.

Communicating with factories requires an entirely different set of questions. Therefore the questions you ask a factory should be clear-cut and in very basic English. Some of my favorite questions to ask are:

Step 2: Ask Your Private Label Manufacturers Production Specific Questions

  1. What companies have you worked with in the past? Where are most of those companies based?
    Though a lot of good factories won’t disclose who they work with, if you can understand where most of those companies are located, you’ll have a good idea as to the quality standards they adhere to. Most factories that sell into America or Europe produce higher quality goods than factories that sell into Asia or Africa.
  2. Can I review your business license?
    Though this will be in Chinese, you can get someone who speaks Mandarin to review it and check the AIC (Industrial and Commercial Administration Bureau) for each province of China to see if the company is actually registered there.
  3. What is your typical minimum order quantity?
    Most factories want to produce more products. It’s just a matter of fact that they make more money when larger orders are placed. With that said, if you make them believe in your brand, they’ll often be willing to start at a lower order quantity. Don’t think the number they say right off the bat is finite.
  4. What is your average sample time?
    Sample times make the process that much more exciting. Most people think it takes weeks to get a sample made. For simple apparel items like a shirt or hat, samples can literally be done in less than a week. Sample times will vary drastically depending on the type of product you are producing.
  5. What are your typical payment terms?
    Most factories work on a 30% down to start production, 70% paid before shipment payment term. This unfortunately means you need to pay for 100% of your production before you actually receive your product. For larger production runs, it is always smart to send in a quality control team before paying the 70% remaining balance.

Now that you know what questions to ask a factory, it’s time to learn how to manage a manufacturing process.

Step 3: Manage the Manufacturing Process and Get Samples Made

You found a factory to work with:

Now it’s time to teach you about managing the actual production process.

Every product starts with at least one sample and you don’t want to go into a production run without a sample produced by the factory you’re planning to work with.

Look:

Know your specifications for a quick turnaround:

  • What colors do you want?
  • Any specific materials you want to use?
  • Do you have a logo? And do you want it on the sample?

When you start discussing your product with factories, you’ll soon realize the abundance of options.

As an example, for watches, you can literally customize everything from the logo on the crown to the entire watch face. Knowing what you want will save you in the long run as you don’t want to have to produce multiple samples because you forgot some design details.

10 Untapped Private Label Product Ideas In Demand for 2018!

Step 4: Get Photo Updates of the Manufacturing Process

Ask for image updates that showcase progress is being made. You’ll want to ask a factory what the timeline looks like for each part of your product. If one part gets delayed, you know the whole production will be delayed.

The key to a smooth production run is staying on top of the process.  So, even though most people manage a production run through email, you may want to consider tools that enable you to actually map out the process.

My Very Own Private Label Product Being Manufactured - The Watch Assembly Line

Watch case assembly line

Handpicked Content for You: Do I need an importing license or LLC to start selling on Amazon

What’s the bottom line?

There’s Nothing Left but To Take Action

Have an idea?

This is what you do:

  • Quickly find the perfect private label manufacturers to make your product
  • Create your own brand
  • Open an Amazon account
  • Start selling

If you aren’t ready to start your own private label business, dropshipping could be a option where you don’t hold inventory, but have lower margins.

The key to becoming a successful private label product entrepreneur is creating a brand where you can charge a premium for your products.

Now that you know how to find the perfect manufacturer and manage a production run, it’s time for you to start your own business!

Leave any question below and I promise to help you out along the way…

Learn to Private Label Products and Build Your Own Ecommerce Epmpire Webinar Sign up

Author

Nathan Resnick

Nathan Resnick is the CEO of Sourcify a platform that makes sourcing easy. Nathan has brought dozens of products to market, ran ecommerce stores generating over six figures in revenue, been a part of campaigns on Kickstarter raising a total of over one million dollars, and used to live in China

  • […] building your own private label brand, you’ll have a raving fan base that’s willing to purchase additional products you […]

  • […] you started with Retail Arbitrage, then moved on to private labeling your own products only to discover that someone has been stealing your […]

  • […] Creating your own private label brand allows you to control your business from the beginning.  There’s no need to spend so much money in the beginning of your Amazon journey. […]

  • […] are 6 pillars to every product listing, either retail arbitrage or private label, that are important to understand as an Amazon […]

  • […] As an Amazon seller, you need to know how to win the Buy Box. This is a crucial part of successfully selling on Amazon, especially if you’re not creating and manufacturing your own products. […]

  • […] you private label or create your own products in China you can rank your products with this […]

  • […] Starting an importing business can be incredibly overwhelming. There’s tons of obstacles to overcome: finding the right product, customs confiscations, scam suppliers – and that’s just the beginning… […]

  • […] encourage any importer to really get to know his target customer, and then try to build in new product features that will make the target customer’s life […]

  • […] you’re trying to start a new business from scratch, you’ll find your mind running in circles unless you have a clear direction to run […]

  • […] model. Do I need to file for an LLC first and where do I obtain an importing license? I want to create a product in China and sell it in the […]

  • […] Our step-by-step hacks on how to make $1,000 a month importing a private label product from China. […]

  • […] you want to customize any aspects of the product, you are going to have to pay extra. Most factories will work with you to build anything you want really, even a completely new product if they can do it, and they will help you with many aspects […]

  • jayson says:

    Hello….good evening every one I’m a business man from China zappos shoes company we are the best and we are good in products all over the the world…

  • Christy says:

    I need someone who can send good products for me to sale, I live in Nigeria

  • Brittany Rivas says:

    if wanted to make my own medical scrubs how would be able goibg about do that any advice

  • […] (More interested in creating your own product? Check out How to create a Private Label Product and Find the Perfect Manufacturer) […]

  • Aldrin Reyes says:

    Good day, Is it possible for any Chinese manufacturers to produce low quantity of products for the start up entrepreneurs? about less than 100pcs pre-produced? btw we’re targeting to have our own brand of Sunglasses. please email me for details. thanks.

    • Mk says:

      for smaller quantities, shop on aliexpress.com, its alibaba’s website too but for small importers (of course you wont get the same price as if you order 10k pieces, but it s still a great price).

  • […] Manufacturing: As much as you might save on cost, a difficult part of creating a private label brand is manufacturing your products.  As a result, this is the biggest barrier to entry. People face fraud or production of poor […]

  • Mark says:

    Great guide about Amazon FBA. I think there are 2 things is very very important in this business is: How to choose right product to sell and how to launching new product to get high ranking on Amazon Search Results.

    I read some post on Startupbros and I think it is very helpful for newbie. I have learned so much on this blog.

    Thanks

  • Manal says:

    I want to start my own shoe brand.so I want to know the price,quantity,quality of the shoes

  • Tom Buckland says:

    Great way to share this article which provides the Pros&Cons of private labeling. Surely a helpful blog.

  • Andy says:

    I’d like sell shoes importing from china

  • […] for vegetable spiralizer. It’s a cheap, plastic bundle with the company’s logo on it. Pretty easy to manufacture, but it’s not a product that would have people raving about and coming back to buy more products […]

  • Hope says:

    Thanks very much I come from Ghana how I get company to manufactured plastic products for me

  • […] learn more about finding the right manufacturer, check out our post, “How to Quickly Find Private Label Manufacturers.”As far as recommendations go, Sourcify is a great “source” [pun intended] to help link you […]