When it comes to finding suppliers for products to sell online, most people look towards China and other Asian countries because the price of labor is far cheaper than the United States.
But working with Asian vendors comes at a cost. For example…
- You have to deal with language barriers
- You have to adapt to cultural differences
- You have to pay import duties on your goods
- You have to pay a high cost of shipping from overseas
- You have to contend with longer lead times for production
- You have to communicate in different time zones
In contrast, working with vendors in the United States is much more straightforward.
There is no communication barrier. The minimum order quantities tend to be lower and the cost of shipping is significantly less.
In addition, there are no import duties.
One of the biggest mistakes new importers make is not taking into account the tariffs that are imposed on certain raw materials. And depending on the product, these extra taxes can significantly increase your cost of goods.
Pros And Cons Of Sourcing From Asia Vs The United States
First off, there is this misconception that everything is cheaper in China. But that is actually not the case.
In fact, the cost of raw materials is very similar between the US and China.
For example if I want to create plastic products and I already own my molds, the cost of plastic is more or less the same whether I produce my products in China or the US.
The primary advantage of sourcing from China is the cost of labor which is more than an order of magnitude less than the US.
As a result, any type of product that involves a high percentage of human labor will almost always be cheaper in China. This includes wood working, sewing, stitching, packaging, assembly etc…
But if you are just getting started in ecommerce or if you are terrified of high tariffs on certain materials and products, then you may want to consider sourcing from the United States.
Often times if you factor in the extra cost of shipping, import duties, material defects and the headaches of dealing with Chinese vendors, going with a local US vendor might actually make sense.
In any case, I’ll let you be the judge.
Here are some articles that I’ve written about sourcing from China.
Feel free to compare them to the methods described in today’s post on sourcing from the United States and come to your own conclusions.
Anyway without further ado, here’s how I find suppliers in the United States.
Method #1: Use ReferenceUSA
In all my years of teaching ecommerce, I find it perplexing that almost no one ever mentions ReferenceUSA as a resource.
Not only is ReferenceUSA 100% free but it’s probably the best and most comprehensive database available in the United States.
What is ReferenceUSA?
ReferenceUSA offers the most up-to-date data on businesses in the United States and it can be used to…
- Locate any type of company nationwide
- Research business executives of any company
- Find business opportunities and suppliers for your ecommerce store
- Find manufacturers to produce your products
But there’s a small catch. ReferenceUSA can only be accessed at your local library but most libraries support it.
Here’s how to get access…
Step 1: Call Your Local Libraries And Ask Them If They Have Reference USA
ReferenceUSA has a handy library locator online here
Step 2: Get A Library Card
Most of you probably haven’t set foot in a library since the dawn of the Internet, but you’ll have to physically go in to get your library card.
Library cards are free and you can actually rent movies, videos game and books in addition to ReferenceUSA
Step 3: Access ReferenceUSA From The Library Website
Most likely, you will be asked to type in your library card number and a 4 digit pin to access ReferenceUSA
How To Use ReferenceUSA
When you first login to ReferenceUSA, it will ask you what you want to search. Click on US Businesses. Then click on “Advanced Search”
From here, I click on the following
- Include Unverified Businesses – This tells Reference USA to include smaller businesses in the search
- Keyword SIC/NAICS – This allows you to search by keyword or topic
- City/State – This allows you to search by location
Then I enter in what I’m looking for along with the geography. For example, let’s say I want a plastic mold company in Santa Clara, CA.
After I click on “View Results”, I’m presented with a list of plastic mold manufacturers in my area. It’s that simple!
Overall, ReferenceUSA is a great way to find contact information for any business in the United States. The only downside is that ReferenceUSA also returns retail businesses as well.
As a result, you’ll often have to sift through the results to find real suppliers.
Method #2 Use ThomasNet.com
ThomasNet.com is another database of US suppliers that primarily caters to industrial and commercial suppliers. What’s nice about ThomasNet compared to ReferenceUSA is that ThomasNet only includes real suppliers and not retail shops.
As a result, you won’t have to do as much sifting through the ThomasNet results. The downside of course is that ReferenceUSA is infinitely larger than ThomasNet because it has access to every business in the US.
For all practical purposes, I like to start on ThomasNet and then use ReferenceUSA if I can’t find anything good.
Using the same example from ReferenceUSA above, let’s look for plastic mold manufacturers on Thomas.net.
As you can see, ThomasNet returns very specific plastic suppliers categorized by their specialty. Then, you can limit the results based on your geography.
Once again, ThomasNet is more geared towards industrial suppliers so you probably won’t find general consumer products on there. But if you are looking to fabricate your own designs whether it be clothing, plastic or metal, then ThomasNet.com is an excellent resource.
In addition, you can also find CAD designers and clothing designers if you want to create your own custom products from scratch.
Method #3: Use WorldWide Brands
Worldwide Brands is a service that aggregates light bulk and dropship wholesalers into a nice, searchable directory. They also pre-vet these suppliers to make sure that they are legit.
Now I’ve had a Worldwide Brands account since 2011 and while I don’t use the directory much these days, it’s an excellent resource for finding light bulk and dropship suppliers in the United States.
What does light bulk mean exactly?
A light bulk supplier is a term coined by Worldwide Brands for suppliers that require a minimum buy of $500 or less. As a result, you can get started for a much lower cost than going with a traditional factory.
While this sounds great for beginners, the reason I haven’t used Worldwide Brands in ages is because I no longer dropship and I don’t sell other peoples products at all.
In fact, long time readers of MyWifeQuitHerJob.com know that I’m pretty anti dropshipping in general. But I get enough questions about dropshipping that I feel compelled to address them.
First off if you are considering dropshipping, please read the following posts
In any case, here’s what the interface for WorldWide Brands looks like when you login.
By entering in a product, WorldWide Brands will return a list of suppliers. By clicking on the “See Full Details” button, you can get that supplier’s contact information, minimum order quantity and vendor website.
If you are struggling to find dropship vendors in the United States, then WorldWide Brands can save you a lot of time.
Method #4: Use Makers Row
Makers Row is a directory of over 10,000 US manufacturers across over a dozen different industries. And similar to ThomasNet, you can search by location and capability.
Makers Row is considered a premium service and it comes at a monthly membership cost. But their interface allows you to easily get estimates, book consultations and reach out to real US manufacturers.
Here’s how it works.
Once you sign up you can browse their directory of manufacturers.
What’s nice is that Makers Row presents you with a beautiful view of the factory including reference samples, pictures and videos. There you can learn about the manufacturer, make contact and book a consult.
Once you’ve selected a factory, Makers Row has project management software built in to allow you to provide product details and manage your production.
Keep in mind that Makers Row is tailored towards businesses looking to manufacture their own products from scratch.
And similar to ThomasNet and ReferenceUSA, you will have to do most of the heavy lifting in contacting and interfacing with manufacturers.
Choosing From The Different Supplier Research Tools
When it comes to sourcing products to sell, the 4 tools described above serve different purposes.
ThomasNet.com and Makers Row are much more useful if you plan on creating and manufacturing your own product from scratch. As a result, you won’t find many suppliers on either service that sells other people’s branded products.
ReferenceUSA is a directory of every business in the US which makes it much more versatile than ThomasNet. However, you will have to go through the results of your searches more carefully to find a supplier that matches your needs.
If you are looking for wholesale vendors, try including the keyword “wholesale” alongside of your search keyword terms.
Finally, Worldwide Brands is a directory of pre verified dropship and light bulk wholesale suppliers in the United States. There, you’ll find suppliers who are willing to dropship their own brands.
When it comes to sourcing in the US, it pays to do a full cost benefit analysis with an equivalent Chinese manufacturer. Get a quote from a Chinese factory and be sure to factor in costs such as…
- Cost of inspection
- Cost of freight forwarding
- Cost of import taxes and duties
In addition to pure dollar costs, be sure to factor in a small amount which I call the “mental anguish” tax.
After all, dealing with Chinese vendors will often take away a piece of your sanity because they are always trying to cut corners and save on costs.
When all is said and done, sometimes it’s worth using a US manufacturer even if the cost is a little bit higher. After all, the lead times will be much shorter which will allow your business to be more nimble.
In addition, it’s also nice to know that you’re only a short flight away from visiting the factory floor.
Have you read these?