Imagine running a company that has no trouble getting in front of the right audience. You also offer innovative solutions compared to your competitors. However, you can’t seem to optimize your manufacturing process.
Issues like these can lead to significant problems in the future, and they’re one of the many reasons approximately 20% of small businesses fail within their first year. Leveraging offshore manufacturing can help many companies take their performance to the next level.
Not everyone knows how to get started, though. Let’s explore how to recognize when you should implement an offshore manufacturing infrastructure.
Tap into an International Market
Expanding into an international market can be a fantastic way to generate more revenue. This is especially true if that demographic has already shown interest in your brand. For instance, you might discover through your analytics that a significant portion of your audience orders your products from Asia.
Expanding to this continent will help you leverage this demographic while providing a better customer experience. You can significantly reduce shipping times by manufacturing closer to your international audience.
As your company grows internationally, you can invest the money you make in domestic expansion. This can allow you to contend with domestic competitors you might’ve had difficulty competing with.
You Need to Scale
As time passes, it’s imperative to scale your business. This will help you accommodate your growing audience, manage inflation, and establish a more significant market presence.
Scaling is often much easier said than done, though. The costs associated with expanding your company are often high enough to prevent you from doing so. Offshore manufacturing can ease scalability and help you establish a foothold in another region.
It’s worth noting that companies that have expanded internationally are also more valuable to buyers and investors. If you plan on selling the business one day, you have an easier time if you can illustrate that your company has a presence in other countries.
Cost Reduction
This is one of the most prominent reasons people choose offshore manufacturing. International manufacturers can facilitate mass production for a fraction of the domestic costs.
This is great for large businesses that carry substantial inventory. There’s something to be said about the benefits small businesses can experience, as well. Small companies often don’t have abundant capital to work with, and saving on production costs can help them scale.
Access to Skilled Workers
Many people overlook how skilled outsourced workers are in manufacturing. To put this in context, consider how many clients a single manufacturing facility in China works with.
It’s likely hundreds, perhaps even thousands. They also collaborate with companies throughout countless industries. As time passes, they develop different skill sets exponentially faster than domestic workers would.
This allows them to quickly understand your project and deliver stellar results. Keep this in mind when moving forward so you can leverage their skills to the fullest extent.
Finding a Manufacturer
To get the best results, you’ll need to work with the right manufacturer. They have the tools and resources to help you overcome the obstacles you face.
When searching, explore their past reputation. See what other people have to say about the results they got. Look for reviews that mention timeliness, professionalism, and communicativeness.
During your search, it’s essential to keep an eye out for fake reviews. These are often posted in large batches and contain many of the same keywords. Find someone who has enough industry experience to understand your project’s nuances.
Ideally, you’ll find someone who’s been around for at least a decade. Are they easy to contact? The last thing you want is to deal with issues on your own.
Doing so can be difficult and sometimes even impossible. It’s also important to assess their enthusiasm. Pay attention to how many questions they ask about your company’s needs.
If they seem indifferent, don’t be afraid to look elsewhere. What is their pricing structure like? You should avoid the most expensive options defined, as there’s a point of diminishing returns regarding what you pay.
However, you should also avoid the cheapest manufacturers. These likely cut corners and will fall short of your goals. With enough due diligence, you shouldn’t have an issue finding the right professional for your situation.
Avoiding Common Mistakes
There are certain missteps that inexperienced entrepreneurs make with offshore manufacturing. Navigating these will maximize the likelihood of success. Listed below are some of the most notable.
Not Having a Strategy
As you might assume, not having a strategy can be catastrophic. You will likely invest time and money into an endeavor that will likely fail. Don’t rush this process, as it often takes months or even years to develop the right plan.
Expanding Too Early
It can be tempting to pursue offshore manufacturing as soon as possible. With the aforementioned benefits, it’s not difficult to see why. However, doing so too early can lead to major setbacks.
The most common scenario is when businesses use offshore manufacturing without enough demand. Although they save on production costs, they don’t have a large audience to recoup their investment, leading to warehouses full of unused inventory.
Not Doing Your Research
Offshore manufacturing is not something you should implement without comprehensive research. It’s best to understand each fine detail of the process.
What is the manufacturer’s QA process? What happens if conflicts arise, such as intellectual property theft? The answers to questions like these will help you better prepare for this endeavor.
Don’t Neglect Offshore Manufacturing
When implemented correctly, offshore manufacturing can help you substantially improve your company’s performance. The information in this guide will allow you to get started on the right track and avoid issues you may have otherwise encountered. Just be sure to work with the right professional.
China 2 West has helped thousands of Western companies expand their businesses nationally. We pride ourselves on serving as a one-stop solution for supply chain management, quality control, product development, and manufacturing.
You’ll learn more about what we have to offer when you get in touch with us today.
