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Manufacturing in small amounts - Q & A

Ken calls from Israel to find out how to get manufacturing services for a small amount of products.

Rich Sloan:  Okay.  866-55-START.  That's the call-in number.  866-557-8278.  If you've got a question about math, direct it to Jeff.  If you've got a question about the rest of your business opportunities, I'll take it.  And we're going to go to the phone lines right now.  We've got Ken out of Beit Shean, Israel.  Wow.  All the way from across the Atlantic and Mediterranean.  Welcome to our show, Ken.

Ken:  Thank you very much.  It's exciting to hear you guys and not in the Internet for the first time.

Jeff Sloan: It's amazing, Ken.  Israel is one of the top, if not the top after the U.S., country in developing new technology companies and offerings, I believe, on the NASDAQ.  I mean, the venture capital that's pouring into Israel is unbelievable.

Ken:  Right.  There's a lot of work going on over here, a lot of foreign investors and a lot of people doing some interesting things here and shipping out to the States and all over the world.

Rich Sloan:  So are you an entrepreneur?  How can we help?

Ken:  Okay.  I've been a Sloan brothers groupie for the last year.  I'm an industrial designer.  I'm working for a large company and I wanted to go out on my own.  So I've been following your instructions.  I started a small company this year.  (Unintelligible).

Rich Sloan:  And everything is a mess, right?

Ken:  Oh, no, it's been great.  You guys have been -- it's fantastic.  I've been following everything.  I just got into one glitch.  I've started a custom designer doll company called BiblicalBeasties.com, which is taking its influences for the designs from ancient text on kabbalistic amulets, and I got a great response from people.  My problem is that I produced --

Rich Sloan:  Jeff, that's called a niche product right there.

Jeff Sloan: Well, actually I'll tell you, it's a niche, but that's one heck of a big niche.

Rich Sloan:  I’m not saying --

Jeff Sloan: I love that.

Rich Sloan:  I'm not --

Jeff Sloan: I've not heard this product idea.  As soon as he said it, I like it a lot.  It's got a ring to it.

Rich Sloan:  Yeah, he's got a very strong feeling.

Ken:  I started out as doing (unintelligible) giant fabric sculptures as a sculptor and people said, "Hey, we want to buy those small for gifts."  And I started following along with your information.  I just got into some questions.  I was hoping you could help me with one.

Jeff Sloan: Go ahead.

Rich Sloan:  Well, first of all, I'd say you owe us a cut of the deal.

Ken:  Okay.  Definitely.  I'm definitely open.

Rich Sloan:  Okay.

Ken:  The problem I've gotten to right now is that through the Internet, I found a company in Canada that produces prototypes for plush dolls with all the licensing for the States and for the Canadian market.  They've been fantastic.  The prototypes are produced in China, shipped over to me and then I ship them over to a partner in the States and it got great feedback.  The problem is I want to go into production, except the minimum production from any company that's reputable is between 500 and 1,000 units per design. 

Well, I can get prototypes, obviously, for one or two production models.  I'm looking for a small production run just to get out for advertising, maybe to go to a trade show, to get it out to the gift shops that are interested and to produce a series of three dolls.  And to produce the 1,500 dolls just on my own right now is prohibitive.  I wanted to know if you guys had any advice on how I could get a small run of 50 of each doll or 100 without going ahead and committing to the 1,500 right off.

Jeff Sloan: Let me ask you this.  Have you researched other manufacturers?

Ken:  Absolutely.  I went to at least another dozen manufacturers.  500's the minimum that I've gotten to, although there was a couple foreign manufacturers that were willing to do per 50 dolls or 100.  The price was the equivalent of if I was doing 500 through this very reputable company I was working.

Jeff Sloan: How complex is the assembly of the doll?  Is it --

Ken:  Well --

Jeff Sloan: -- simple materials with simple --

Ken:  Yes, simple materials.  The design's pretty sophisticated; dolls are simple.

Jeff Sloan: Is it sophisticated equipment required to assemble it?

Ken:  Well, it's typical plush doll assembly.  It's a lot of hand work and sewing machine stuffing.

Jeff Sloan: Here's what I'm feeling as I hear you.  I'm feeling that there is actually a cottage industry kind of approach that you might want to check out here.  And through some of the cities -- I know, for example, in Chicago, they actually help you identify people who work from home and do very limited runs of --

Ken:  Uh-huh.

Jeff Sloan: -- sewing-related kinds of development projects.  So you might be able to actually piece together a bunch of people who work from home and --

Ken:  Right.

Jeff Sloan: -- put the low quantity of product together that you're looking for.  Have you considered that?

Ken:   I'd consider it.  The problem is anything that goes through the children's toy market has to have health safety --

Jeff Sloan: Yeah.

Ken:   -- licenses. 

Jeff Sloan: Right.

Ken:  At least three licenses go on a plush doll.

Jeff Sloan: Well, there you go. 

Ken:   And I don't --

Jeff Sloan: And how about this approach?  You have prototypes, right?

Ken:   I have prototypes, absolutely.

Jeff Sloan: All right.  Take the prototypes; take some photographs of whatever the materials.  Put together a nice little presentation and go to buyers who are willing to place orders for these things, making sure you have enough lead time on the promise of the delivery date on the orders.

Ken:  Okay.

Jeff Sloan: And have them actually place the orders to you.  And then take those orders and either have the manufacturer itself, in essence, factor the orders.  Take a discount off if they produce in advance and give you some extra time and you pay at the other end.  Or go to a company who is a factoring company.  They will actually give you cash in advance against those purchase orders, discount the value of those purchase orders so that they're paying some percentage of those purchase orders to you.  You get the cash up front, you get the product made.  Get those orders in advance and all the dominos fall from there.

Rich Sloan: And the other thing Ken should do, absolutely, is post his request in the StartupNation community forums because people might have manufacturing capability there.  Coming back with more on StartupNation Radio.