Custom manufacturing for Amazon with Ryan Shaffett of XQ manufacturing – part 1 - a podcast by Michael Veazey

Custom manufacturing for Amazon



Ryan Shaffett's Custom manufacturing Background

Ryan been living in China for 18 years - running biz there for 12 years.

Started as a traditional manufacturer.

XQ has a handful of clients - medium sized US companies, sporting goods industries.

They’ve seen the trend towards FBA.

Is Custom Manufacturing something that FBA Businesses are doing more of?

XQ have one key client fully FBA based business.

But they are increasingly tweak services to meet FBA clients

Most clients go from Private Label to custom manufacturing.

What brings clients to you?

The best clients have good people who communicate well.

It can be very complicated to work with a Chinese factory to develop own products.

Ryan tries to save a lot of hassle.

They can reduce own staff in own country.

What are the key distinctions between Custom Manufacturing for Amazon and Private Label?

Advantages of Custom Manufacturing for Amazon



* Truly unique

* As opposed to Private Label -which can be an exercise in  “who can push the most product?”

* Higher profit

* Know niche read clients feedback

* How it needs tweaking

* Dealing with PL manufacturers

* You are the mould owner -

* If you develop a product - I’m going to charge the client for development costs.

* Different price structure



Summaries of Pros and cons of Custom Manufacturing

The advantages to a privately developed product are:

1 - It is very hard to hijack/copycat

2- Often margins are much higher with privately developed products.

3 - You can tweak it with all the features you know the market wants.

What are the main downsides?

Disadvantages:

1- Minimums tend to be higher, like investing at least $2,000 or more on an order.  Large plastic molds can cost up to $10,000 and more.

2 - You have to wait between 1-4 months to get your product in hand.

Downsides of custom manufacturing for Amazon

Time



* Prototyping

* Mold development is time consuming (could take a month)

* Typical turnaround 1-2 weeks china

* Every project different

* 1-4 months or longer if multiple prototypes



Money

Plast ic inc molding costs $1K-10K

No top end

It's a Barrier for small FBA sellers

How many units

Small key shared objects can be tricky.

You Can’t try out the market



* It’s an upfront commitment

* You might try a single cavity mould

* Then develop a twenty piece mould

* If product bigger than a breadbox everything is a one cavity mould

* Manufacture costs



Different manufacturing techniques

Some clients are already very expert - detailed CAD drawings etc.

Also work with clients who have hand sketched drawings and a concept

XQ manufacturing will have a conversation

Multi material products

These are great but A bit more complex

Basic types of multi material products include some basic electronics sometimes

That's where the initial investment goes into developing the printed circuit board design.

Wood

Wood based products - fairly easy

A lot of plastic and rubber products are also quite straight forward.

Extrusion - tube, board etc. - is often used.

They have lower costs than plastic injection moulding.

Metal

Machining  is used for metalwork (but also for plastic). Machined metal is often huge - for large components, Casting is also common.  Forging and bending are other common techniques.

Textiles

Textiles - have own in house general assembly and own textile factory usually.

This would apply to,  for example, Bags and tents.

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