Sink or Sell Episode 10 - Scaling at the Manufacturing Level

14th April 2017

Greg Fisher is the founder and CEO of Berkeley Sourcing Group. He’s spent the last 11 years working with more than 800 startups to manufacture innovative products and has a history helping hardware startups improve initial designs for DFM, select factories, manage factory negotiations and implement quality control and inspection. Currently, Greg is helping establish the global hardware startup ecosystem as founder of Hardware Massive and Hardware Con.

Moving from crowdfunding to retail and mass manufacturing is quite a jump for many companies, says Greg. The larger retailers that startups may be working with have a lot of requirements and a lot of fine print, which they may not be upfront and clear about in their day-to-day conversations with you. Dig in as much as possible to understand your obligations to the retailer, on everything from packaging specifics to possible penalties. You’ll have to understand and match your manufacturing to what they need.

Obviously when production goes from low to high volume quickly, you suddenly have changes in your margins. You can, though, expect cost reductions when you order a larger quantity of product, and these larger quantities can also lead to a more efficient manufacturing process. You can often see these savings and changes after just two or three larger production runs, while it would take you much longer to see similar positive changes with low volume orders.

When considering factories, it’s important to take a look at different costs in your manufacturing regions. For example, moving from the United States to China will reduce costs, and then moving from high-cost manufacturing regions of China inland can also reduce costs further. When these costs are lowered, you can start focusing on other important aspects of the manufacturing process, such as your defect rate.

Hiccups and mistakes do occur when moving to large scale manufacturing and it’s just to be expected. It’s always a good idea to have a secondary factory in your back pocket, just in case of any problems at your primary factory. In fact, if you have enough large orders coming through, consider giving one to each of the factories, to maintain interest in your business. If quality control does become an issue (which generally occurs when a factory is trying to reduce its own costs), communication with your manufacturers become key, and you want that communication regarding any issues to be as real-time as possible. In any instance, you want to be sure either you or a trusted quality control team is on the ground, at your factory to conduct randomized product checks.

The most important thing to remember in regards to the manufacturing side of your business? Think about your manufacturing partner as a true partner, not just someone that you’re buying a service from. There can be quite a lot of uncertainty, confusion and questions from startups in the beginning of large-scale manufacturing, but, with time, you’ll learn what is and isn’t acceptable and how to improve any issues that may arise. Keep your manufacturer on board, engaged and make communication a priority. At the end of the day, they’ll prefer your business and take the extra effort needed to help your business grow. 

Learn more tips like this at HardwareCon 2018, the Bay Area’s Premier Hardware Innovation Conference on April 19th-20th.  Experience two full days of keynotes, panels and workshops focused on the most important topics around building a successful hardware company. Get your tickets here now if you want to meet the hottest startups, investors and industry leaders across the global hardware ecosystem.


Learn more tips like this at HardwareCon 2018, the Bay Area’s Premier Hardware Innovation Conference on April 19th-20th.  Experience two full days of keynotes, panels and workshops focused on the most important topics around building a successful hardware company. Get your tickets here now if you want to meet the hottest startups, investors and industry leaders across the global hardware ecosystem.

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