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Crowdfunding Best Practices

Manufacturing for Crowdfunding: Where Should You Start

In Chapter 4, the experts at Easyship take you through the manufacturing process for crowdfunding, including, creating prototypes and finding a manufacturer.
Manufacturing for Crowdfunding: Where Should You Start
Jules

By Jules

 

December 29, 2020

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The entire purpose of your crowdfunding journey is to produce a product that your backers will love. That means, you need to physically produce it. The manufacturing process can be daunting, and there are some obstacles that you will need to overcome in order to achieve your goal.

But with the right amount of planning and research, you can master the manufacturing process and deliver to your passionate backers. In this chapter, we’ll cover creating a design for your product, building a prototype, developing a manufacturing plan and finding the right manufacturer for your product.

Designing Your Product

Shoe design from Tropicfeel

In many cases, the product design process will start long before you launch a crowdfunding campaign. Afterall, you need to show your product to your potential audience, and these days that often involves sharing a prototype of your product.

No matter when you start the design process, there are some high level considerations that you need to keep in mind to set you on the path to a successful crowdfunding campaign.

Every design starts with an idea. It’s the idea for a new product that started you on this journey, and now you need to bring that vision to life.

The design process often starts with a simple sketch. You do not need to know how to draw to sketch out your idea. What’s important is that you get the key ingredients down on paper in a way that’s clear for others. It’s also helpful to include inspiration from similar products. You can gather these on a mood board with your notes.  

While you’re designing, you need to keep the function of your product top of mind.

  • How is it going to be used by the end user?
  • What materials will it be made out of?
  • How much will it cost to manufacture the product?
  • Will it require a battery or warranty?

Create a 3D Visualization

Once you have a drawing the next step is to create a 3D visualization of the product. This is where the design process starts to get more complex. You’ll need to create a Computer Aided Design (or CAD) to build a virtual model of your product.

You can either attempt this yourself or hire a freelancer or design firm. There’s moderately priced CAD software that you can use for your 3D visualization but in most cases for serious minded crowdfunded campaigns, it’s better to hire a freelancer designer or an industrial design firm that you can work with during the entire manufacturing process.

Hiring a Designer

You’ll want to make sure you do your research and find a freelancer or design firm that has worked on similar type projects, and crowdfunding campaigns. With the rise of crowdfunding the last decade, the design and manufacturing industry has developed along with it to provide resources to inventors and entrepreneurs. The key is to take your time and make sure you do your research.

Once you settle on a designer, you’ll need to communicate your idea and share your sketches with them. Again, these do not need to perfect! The job of a designer is to translate your vision into a model, and in many cases they will be able to see aspects of the design that you might have missed. This is an exciting part of the process because they will be able to help you improve on your concept with their expertise.

When negotiating the cost and price, it’s best to get a fixed price quote for the design of your project. You don’t want to find yourself with unexpected costs or end up in an agreement that doesn’t work for you.

Consider Design for Manufacturing (DFM)

Lastly, do not underestimate the Design for Manufacturing (DFM) process. What this means is that you focus the design on what can be most effective and affordable to mass produce. This sometimes includes utilizing existing molds for parts rather than creating a new one from a unique design.

While you may view your new product as wildly innovative, in many instances, it’s going to be smarter to focus on what can realistically be manufactured at a price point that will make your product successful. Working closely with a product designer will help you navigate these choices, and ultimately settle on a design that not only achieves your vision, but can be affordably manufactured at the scale necessary for profitability.

Getting Your First Prototype

Shoe prototype from Tropicfeel

Once you have finalized the design of your product, you’re going to want to produce a prototype. This is an important step for several reasons.

First, this proof of concept will add credibility to your crowdfunding campaign and demonstrate to your potential backers that you are legitimate and dedicated to producing the product. This also helps with marketing and PR efforts as it gives you a physical product for collateral, helping you build buzz. This level of professionalism and planning signals to your audience that they can trust in you as an entrepreneur, and potentially back your ideas. It’s part of the journey they are investing in.

Second, producing a prototype allows you to test the product and refine it before the production stage. You don’t want to mass produce a product that could potentially be defective or not work as you imagined.

Choose the Right Kind of Prototype

There are a couple different types of prototypes you’ll want to be aware of before you start. A visual prototype doesn’t need to physically exist. It can be a drawing or a CAD design as discussed in the design segment. A proof concept prototype is a physical product that demonstrates your product will work.

This can be a version that you make yourself for the purpose of bringing your idea to life even if it won’t resemble the final product. The last type is a presentation prototype which will be used for showcasing your product. There can be several iterations of the prototype process as you test your product, receive feedback and refine your ideas.

Understand the Rules for Prototypes on Kickstarter and Indiegogo

It’s important to note that Kickstarter requires a physical prototype for their product campaigns, and has several rules for how you present the prototype that you must follow. You will need to research all of this before you move forward with your campaign to make sure you are compliant. The rules and best practices have been firmly established at this point, so there are plenty of resources that you can tap into. Here’s a good starting point.  

On Indiegogo, there’s a bit more flexibility and you don’t necessarily need to have a prototype, but you do need to select the stage of your product development: concept, prototype, production, and shipping. No matter the platform or rules, you want to be fully transparent when presenting your prototype so your potential backers know where you are in the process. Again, it’s about following the journey!

Determine How to Make Your Prototype

Pilot by Waverly Labs

One difficult choice you’ll have to make about creating your prototype is choosing how to manufacture it. There are a few different paths you can take. First, as we mentioned, you can take the DIY method and build it yourself. If you want something more polished, you can work with prototyping companies such as Fictiv, Protolabs, and Shapeways. Kickstarter’s Hardware Studio is a great resource for everything you need to know about the manufacturing process.

Lastly, you can have your prototype made by a manufacturer. Going down this path is the most complex, and we’ll cover how to find a manufacturer in the next section.  

How to Find the Right Manufacturer

Launching a crowdfunding campaign for a product is an immense undertaking. In many cases, it’s the starting point for a new business and the fulfillment of an entrepreneur’s dream. It comes with substantial risks and bigger potential rewards. Perhaps the most challenging part of the process is choosing the right manufacturer for your product. It’s a complex process that requires thorough research and understanding before you make a choice. Don’t worry though, there are plenty of resources available to help you navigate the process. We’ll get you started on the right path.

Develop a Manufacturing Plan

With so much at stake, it’s important that you develop a plan that you can follow during the manufacturing process.

Here are some important factors you need to consider before you start:

  • Timelines: The manufacturing timeline should align with your crowdfunding timeline to assure you can deliver your product to your backers when you promised.
  • Costs: This is obviously central to your planning. By this stage, you should have set a crowdfunding budget and know how much you need to spend on manufacturing.
  • Domestic or Overseas: These days, a large portion of manufacturing is done in China, India and SE Asia, but depending on the product, you may choose to manufacture it domestically, so you’ll need to budget accordingly.
  • Minimum order quantities: Understand how many pieces of your product you need to produce. This will be a big factor in choosing a manufacturer as many will have a minimum requirement.
  • Logistics and Shipping: Once your product is manufactured, you need to deliver it. A company like Easyship can help you develop a cost-effective shipping and logistics plan to make sure you stay within your budget and deliver your product on time.  

Once you have your plan ready to go, it’ll be time to research and contact potential manufacturers. It’s important to take your time on this process, so build it into your timeline to make sure you are not rushed.

Where to Search for Manufacturers

Where do you begin your search? Of course, you can start with Google. It might take some time, but you’ll find plenty of resources. Another path is to ask for recommendations through your social networks. If you’ve come this far, you’ve certainly built a community, and these days the network will often bring you great results.  

Understand the Pros and Cons of Sourcing

Before you start your search, you’ll want to weigh the pros and cons of domestic vs overseas sourcing. Some of the advantages of sourcing domestically in North America include the made in America appeal, higher labor standards, no language barrier and better payment security. The disadvantages include, higher manufacturing costs due to labor costs and few product choices because many parts are now solely manufactured overseas.

The advantages of sourcing overseas are lower manufacturing costs and a higher number of manufacturers. The disadvantages include lower manufacturing and labor standards, less intellectual property protection, language barriers, and importation and customs clearance.

All of these can be overcome with planning and research, so you shouldn’t be intimidated by sourcing overseas. Many campaigns go that route and end up with no problems, and a product their backers love.

Once you’ve made your decision on sourcing, you’ll want to get into the nitty gritty of finding potential manufacturers.

Utilize Directories

There are a few prominent directories for North American manufacturing that are useful. For the domestic US market ThomasNet, Maker’s Row, MFG and Kompass are great resources.

If you’re looking for overseas sourcing, the dominant platform is Alibaba. There you’ll find manufacturers, suppliers, wholesalers and trading companies. However, you need to be diligent because many companies will call themselves manufacturers when they are in fact trading companies. Another great option, is a company like Sourcify which helps entrepreneurs and inventors learn how to safely and efficiently source their products from overseas manufacturers.

When you start to narrow down your choices, you want to look for sources that have worked with companies in similar industries and scale. Finding the right fit and expertise is critical so take your time.    

Once you settle on a manufacturer, there are a few questions you should be prepared to ask to make sure it’s the right fit for your campaign.

  • Ask about the payment terms. Some manufacturers will require up to a 50% down payment.
  • How long with the manufacturing process take? What is the turnaround time?
  • What is the minimum order quantity?

After you’ve selected your manufacturer, you’ll want to make sure that you have clear and open communication channels, especially if they are overseas. There will be a lot of back and forth during the process, so you’ll want to make sure to reduce the miscommunication.

In the next section, we’ll discuss developing a shipping and fulfillment strategy to make sure your product gets to your backers in a timely, cost effective manner.


<- Chapter 3: Raising funds                                Chapter 5: Shipping & Fulfillment ->

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