Before the crowdfunding movement, the typical model for selling a new product was similar to the Hollywood-style launching of a new blockbuster film: an individual has an idea for a movie, the script is written, capital is raised, the movie is produced and heavily advertised, and then the movie is released. The only major difference is swapping in a product for the movie and hoping the product sells well enough to generate cash flow for sustainability.
However, rather than mass producing a product and praying for a successful outcome, crowdfunding empowers inventors and entrepreneurs to develop prototypes, share them with a target market, and gauge interest from would-be buyers of the product; a significantly more precise approach. And if the target market likes the product, they’ll provide the capital necessary for the product’s long-term viability.
Once you reach your crowdfunding goal, the next step is to manufacture your product. This is where nearly 65% of all crowdfunding campaigns run into trouble, the delivery phase. Below are 3 tips we recommend to successfully manufacture your crowdfunded product.
3 Tips for Manufacturing Your Product After Successful Crowdfunding
1. Find a Manufacturer
Finding a manufacturer that aligns with your new product vision is a major task, especially if you have limited experience in manufacturing or bringing products to market. The right manufacturer will facilitate a successful campaign, whereas the wrong one can steer inventors into bankruptcy. If you don’t have the experience with engaging suppliers or manufacturing, consider partnering with a service provider to manage the design and engineering, sourcing, manufacturing, and logistics.
When contacting a potential contract manufacturer for the first time, keep the conversation at a high level, be confident in your questions, tell them exactly what services you’re looking for, and make sure you sell them on your product or idea. If they’re unable to help you, always ask, “Do you know of another company who might be a better fit for this project?”. This does two things for you: 1) it provides you with a contact you may not be able to find on your own, and 2) it gives you instant credibility when you mention “Person X from Company Y said your firm is the best at this”.
Be sure to determine the following information, at a minimum, from any potential supplier:
- If they can meet your requirements without making significant changes to the current product setup
- What the minimum order quantities need to be (this will give you an idea of who they work with, large or small)
- What the costs at different production quantities would be
- What lead times would be like and if they can be flexible (understanding there are seasonal manufacturing cycles)
2. Compress the Program Timeline
The delivery time of your new product can usually be compressed by up to 25% (60 days) by understanding which activities can be fast tracked (parallel pathed) or crashed. Fast tracking is a scheduling technique where a project’s critical path is reviewed to discover which sequential tasks can be performed in parallel (simultaneously) or partially in parallel; crashing is where extra resources are added to the critical path of the project to compress the schedule, but with added cost. The goal here is to find the activities that can be reduced the most while adding as few costs as possible.
Either way, there are tradeoffs to consider. Fast tracks often don’t involve associated costs since activities are being rearranged, whereas crashing is the act of adding resources to complete a project faster, but at additional costs.
Below are some common examples of what to expect for activity timing:
- Product Review & Manufacturer Engagement
- Estimate 15-30 days for approvals on material cost/quantity to order, production scheduling, engineer validations, and supplier selections
- Design Blueprints & Prototyping
- Estimate 15-20 day approvals on CAD and engineering files, initial prototype, blueprint, certifications, and final design with the green light to move forward on tooling, PPAP, and first article inspection, and sample testing to prepare for tooling and inspection
- Tooling, PPAP, FA Inspection & Testing
- Estimate 30-60 day approvals on tooling, samples, material quantity, cost, assembly process, and third party certifications
- Shipping Package Development
- Estimate 10-30 days for designing, sizing, drop-testing, and production for product packaging and shipping specifications
- Pilot Production & Quality Inspection
- Estimate 30-45 days for material preparation, product inspection, and quality tests, with quality tests that are approved by trained factory workers
- Mass Production & Backer Delivery
- Estimate 30-60 days for inspection, production line worker training, backer surveys, and order shipments
3. Understand Lead Times for Components, Tooling, & Production
There will always be a supplier willing to tell you they can match your tight schedule in order to win the business, and in most cases, they’re going to let you down unless sacrifices in quality are made.
Manufacturing quality products takes time, especially if this is your first go around. You’ll need to have a handmade prototype sample completed and fully functional before moving on to mass production. In some cases, once you’ve confirmed your sample, you start opening the molds/tooling, which may take upwards of 60 days.
There are stories of people approving samples, opening molds, and starting production only to find out the product is different from the approved sample. This is, of course, the factory’s fault, so in this type of scenario it’s vital to have someone on the ground to help you with the quality control of the first batch, and, if needed, get the factory to readjust the molds, though this could take an additional 30 days.
It’s also important to keep in mind, if sourcing internationally, that many countries overseas have several long holidays not shared here in the US.