4 Common Product Development + Manufacturing Mistakes to Avoid
It's often said that more than half of new businesses fail within the first year. However, according to the U.S. Bureau of Labor Statistics (BLS), this isn't entirely true. While the numbers are slightly better than the myth suggests, the odds still aren't in favor of new entrepreneurs.
The Reality of Business Survival Rates
Data from the BLS shows that:
- 20% of new businesses fail within the first two years
- 45% fail within the first five years
- 65% fail within the first ten years
- Only 25% make it to 15 years or more
Are Entrepreneurs Really Risk Takers?
The term entrepreneur, coined by economist Richard Cantillon, literally means “bearer of risk.” But does this mean that successful entrepreneurs are high-risk takers?
Many people assume that the most successful entrepreneurs bet everything on their business, risking their life savings for a chance at success. However, research by Adam Grant in his book Originals suggests otherwise. Studies indicate that the most successful entrepreneurs are not reckless risk-takers, but rather skilled risk mitigators.
With this in mind, this blog focuses on mitigating risks in your supply chain—one of the most critical factors in a product’s success. You’ll learn how to reduce risks at various stages of product development and manufacturing to improve your chances of long-term success.
Mistake #1: Poor Product Design Documentation
Designing for Manufacturing vs. Just Designing
There’s a major difference between designing a product and designing a product for manufacturing. A common mistake is diving into manufacturing without a clear and detailed Tech Pack—the blueprint that guides your product’s production.
The Importance of a Tech Pack
If you’re not an engineer or an expert in CAD (computer-aided design) programs, you’ll need a design partner to help create a proper Tech Pack. Choosing the right design partner can mean the difference between success and failure.
A Great Design Partner Will:
✔ Work with you to refine your vision
✔ Create technical specifications
✔ Determine suitable materials
✔ Design for efficient manufacturing
While hiring a design partner requires an upfront investment, it saves you time, money, and frustration in the long run by ensuring your product is built correctly from the start.
Mistake #2: Choosing the Wrong Factory
Finding a trustworthy and reliable factory is one of the biggest challenges in product development. But finding a factory is only half the battle—you also need to know how to vet them properly.
The 2 Riskiest Ways to Find a Factory:
- Using Alibaba or Similar Websites – While not all factories on these platforms are bad, ensuring on-time delivery and low defect rates can be time-consuming, pulling you away from marketing and sales.
- Hiring a Cheap Sourcing Agent – Some sourcing agents on gig platforms charge as little as $5/hour, but many lack experience or work directly for a factory, prioritizing their employer’s interests over yours.
Safer Alternatives:
✅ Hire an in-house sourcing manager
✅ Work with a reputable supply chain management company
These options may cost more upfront, but they reduce risk, save time, and increase your chances of long-term success.
Factory Quotes: How to Compare Options
Once you identify reputable factories, you’ll need to request production quotes. Here’s how to do it right:
✔ Develop a detailed Request for Quote (RFQ) so factories provide comparable bids
✔ Always get quotes from multiple factories to avoid relying on a single option
✔ Don’t choose solely based on price—focus on sampling quality, reliability, and communication
Product Sampling: A Key Vetting Step
Before committing to a factory, you need a production sample to evaluate quality. A well-prepared Tech Pack ensures the factory can produce an accurate sample that meets your expectations.
✔ Validate factories based on sample quality and turnaround time (usually 5–15 days)
✔ If your product requires multiple components, be prepared to manage multiple factories
✔ Present yourself professionally—factories prioritize reliable clients who place repeat orders
Mistake #3: No Factory Agreement or Quality Control
The Risks of Skipping a Factory Agreement
Once you’ve chosen a factory and received a satisfactory sample, production begins—and this is where things get serious. This is also when real money is on the line.
Before manufacturing starts, you MUST have a legally binding factory agreement in place. Without it, you risk losing money if the factory delivers defective or late products.
Key Terms to Include in a Factory Agreement:
📌 Production schedule & deadlines
📌 Quality standards & defect tolerances
📌 Penalties for delays or quality failures
📌 Delivery terms & logistics
📌 Non-Disclosure, Non-Use, and Non-Circumvention (NNN) agreement
💡 Your factory agreement is separate from your intellectual property (IP) protection!
Quality Control: Don't Rely on the Factory Alone
Many factories have in-house quality control (QC) teams, but they’re not always reliable. To avoid issues:
✔ Include quality terms in your factory agreement
✔ Hire an independent QC team for unbiased inspections
Mistake #4: Overlooking Shipping & Logistics
Even if you find the perfect factory, your job isn’t done—your product still needs to be shipped on time and without damage.
Shipping involves multiple stages:
✅ Factory to port
✅ Port to port (international shipping)
✅ Port to final destination (warehouses, fulfillment centers, etc.)
Many factories won’t handle shipping, so it’s essential to work with a reputable freight forwarder to prevent costly delays.
A Freight Forwarder Will:
✔ Handle customs paperwork
✔ Ensure compliance with tariffs
✔ Reduce the risk of shipping delays (which are more common than you think!)
Delays can severely impact your business, especially if you’ve taken pre-orders through Kickstarter or an e-commerce platform.
Less Risk = Higher Chances of Success
Minimizing risks in your supply chain is key to building a successful, long-lasting business. By anticipating challenges and making informed decisions, you’ll set the foundation for a strong, scalable brand.
Your supply chain isn’t just about production—it’s about fueling growth and positioning your business for multi-million-dollar success. The right partner can make all the difference.
Ready to bring your product to life with minimal risk? Connect with Klugonyx today—your trusted end-to-end partner for product design, engineering, manufacturing, and global supply chain management!
