Small Business

Finding a Manufacturer vs. Licensing the Design


To stock more product with a big distributor, a home-based jewelry designer wants to try contract manufacturing. Experts offer advice

I'm a home-based jewelry designer who submitted a ring design to HSN (HSNI). They were pleased with the design and want more quantity. How do I find—and work with—a manufacturer? —L.A., Mesquite, Tex. It all depends on what quantity your distributor is requesting, say manufacturing experts. If you've been asked to provide 50 or 100 rings, consider becoming partners with one or two artisans who do handmade custom designs. Presumably you worked with a jeweler who made the prototype design you initially submitted. That person may be interested in working with you again if the numbers requested are manageable. If, however, you've been asked to stock a large number—say 10,000 pieces—you'll need to contract with a jewelry manufacturer, says Drew Casani, director of TMAC, the Texas Manufacturing Assistance Center. That may prove to be challenging, both to find a company that will work with a small designer and to come up with funding for the manufacturing, he says. "The probability that a Zales or a Jostens will hook up with an individual home-based designer is small, and they won't make large quantities unless they get some money up front," Casani says. "The problem is that you won't be paid until the rings sell." a range of potential solutions

Here are some alternatives you might pursue: License the design to a manufacturer that will take on the risk and up front cost of making the rings. The fact that you have a large, multichannel retailer willing to act as your distributor is an important selling point. TMAC or your local Small Business Development Center can help you find manufacturers that produce jewelry or other kinds of metal work and are interested in licensing original designs, Casani says. They can also help you determine what a typical licensing fee would be and make sure that you have a nondisclosure agreement for potential licensors to sign. Find a small or midsized manufacturer that has the capacity to handle your job and is willing to take a chance on a new product design. You might explore websites such as the International Innovation Network, which puts innovators together with manufacturers, investors, and distributors. Just make sure that you conduct due diligence on anyone you contact through such a site—or in any other manner. "Make sure that you get a manufacturer with an ISO (International Standards Organization) certification, which establishes their credibility," Casani says. Identify potential partners through traditional manufacturing databases, narrowing down your search based on the materials (silver, gold, platinum, and so forth) that you are using. Dan Luria of the Michigan Manufacturing Technology Center says: "We've found ThomasNet, though imperfect, to be vastly superior to any other single database for finding manufacturers." He turned up 60 companies listed in that database under the "rings: jewelry" category and says about 20 of them appear to make rings, as opposed to designing or distributing them. Getting some help from advisers who have worked with small and home-based entrepreneurs will make your process much smoother. Casani of TMAC says that his agency has a program, "Supplier Scouting," that may be perfect for you. Good luck.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus