Some thoughts on starting a brand

[Exceed Fabrication]

Hello everyone, I'm Kelvin.

Exceedfab was founded in October 2023, and I've learned a lot in this year.

I decided to start a new thread to record my thoughts on the entrepreneurial process.

I don't expect this thread to resonate with many people, but I just want to have a place to record and share my thoughts.

Maybe it will be interesting to read it again in a few years.

Of course, if it can inspire you, it would be great!

Sponsored

 

[Exceed Fabrication]

Let me start with my recent thoughts. About factories and supply chain.

The supply chain is very important. Without a strong supply chain, it is like a car engine without power. No matter how hard you step on the accelerator, it will not run as you wish.
If you and your competitors use the same supply chain, it is difficult for you to be much better than your competitors, and of course it is difficult for you to be much worse than them. The brands that cooperate with this factory will be tied to an average quality line.
A factory gave me an example. Their electrophoresis fluid is imported from Japan, so even if you ask them to switch to Chinese products to save costs, it is unlikely because they can't extract all the fluid in the electrophoresis pool and replace it with cheaper ones, which makes their costs and quality almost fixed.
So what if you want better quality? My experience is: try to cooperate with factories that have experience in cooperating with automobile factories. Because these automobile factories will have higher requirements for the production system of these factories, so you can get these benefits. Of course, these factories often have requirements on the order quantity of customers. If it is only 50 or 100 pieces, they are not very interested. Maybe they will cooperate with you with a try-it attitude, but they will soon lose patience.

So this puts brands that are trying to start a business and have quality requirements into a death triangle:
1. You want higher cooperation from the factory because you want to quickly make unique and competitive products, and you hope that the factory can quickly help you make samples to verify your ideas
2. You want better quality control because you know how important early word-of-mouth is to a new brand, and you definitely don't want to lose your first wave of customers.
3. You want a lower MOQ because you don't have much money and order quantity yet, you don't want to take too much risk, but use the limited funds to make more attempts.
This is almost impossible for factories, especially a few years ago, because of the economic prosperity, factories have no shortage of orders, and I'm not even sure you have the opportunity to enter the door of those "what you want" factories.
So this is an opportunity for entrepreneurial brands: the factories that you didn't have the opportunity to contact before, because their business is not good, so they choose to be compatible with more small customers. For these customers with small orders, they have the opportunity to contact higher-level factories, so as to gradually establish their own supply chain. So perhaps this confirms the saying: Crisis is often accompanied by opportunities.

 

[Exceed Fabrication]

Since I am also involved in some pod light development, I think I can also summarize some comparison points:
1. Pod light suppliers are generally considered to have higher personal qualities than metal product suppliers, perhaps because many pod light products are made in a constant temperature and humidity environment, while metal products are often made in noisy and dusty factories, 'high-tech enterprises' versus 'bending steel pipes'. This is reflected in the working environment, the professionalism of the workers/designers, and even the personality of the factory owners.
2. Pod lights factories (at least the ones I have been to, which are OEMs for many big-name pods) have better quality control systems. This is a more mature industry and it is easier to achieve standard quality control.
3. As an entrepreneur, if you only have $150-200k in funds, I don't think starting with pod lights is a good choice. Because the mold opening fee for a pod is about $20k-30k, plus stocking, transportation, brand promotion, loss, etc., creating a series of pods (3/5/7 inches) may swallow up all your funds. Obviously, you cannot accept mistakes in this series, otherwise one attempt will destroy your weak business.
4. The design and production cycle of pods is also different from that of metal products. I think the key point of pods is to design the first appearance and function that customers like (such as a 5-inch), and then you can continue to copy this appearance (such as 3 inches, 7 inches) to reduce the marginal cost of design. So everything depends on the first one. Generally speaking, after the appearance is determined, it takes one month to design the beam pattern, one month to develop the mold, one month to adjust the trial mold, and one month to produce.
Metal products (bumper, side rail, etc.) have a lower threshold and higher flexibility in design. Of course, it is also a product with lower value per unit volume (such as a brick compared to a mobile phone), so transportation costs and warehousing will also be a huge challenge.

 

[Exceed Fabrication]

So it seems that small metal products (or other small and low-cost products) are the only choice? For example, some handles, mobile phone holders, storage boxes, car covers, rearview mirrors, etc.
Yes and no, because what you can think of, others can also think of, and the market competition for these products is very fierce, because anyone can make them.
And your competitors can often use larger orders to gain cost advantages, which leads to those new brands that do not have much money to find that they cannot lower their prices than their competitors even if they lose money.
So I think there is only one way for new brands, that is, to try hard to think of unique selling points to create new value for customers. This is the cheapest and most difficult way.
Of course, you have another choice (which is also what most brands that started on Amazon do): first take the mature products that the factory already has, put your own logo on them and sell them as the initial capital accumulation, and then consider creating your own unique products when you have money.
But this approach may work 5-7 years ago, but it will only become narrower and narrower now, because homogeneous products bring price competition, which is a problem faced by almost all products on Amazon. Maybe you enthusiastically selected several products and sent them to FBA, only to find that there were already dozens of similar or even identical products waiting for you. Moreover, more and more factories are not content with just being OEMs, and they also want to directly participate in transactions with overseas customers to gain more profits and living space, which puts entrepreneurs who do not have much capital and do not have their own factories in a dilemma.

 

[Exceed Fabrication]

Recently I talked with a factory owner and asked a question that I have been unable to figure out.
I asked: Since branding and trade are more profitable, why haven't you thought about forming a team and developing your own brand? You already have all the equipment, technology, funds, and experience. I think it is not difficult for you to start a brand.
He said: When the export trade broke out around 2020, we watched our peers make a lot of money, and we were tempted. But I still gave up the idea, because once I have my own brand, it means that I will compete with my customers, and they will start to worry whether I will use the good ideas they provide on my own products, so we will lose customers. And if we don't succeed in building our own brand, the original customers will also be lost, and the factory will be in danger, so they don't want to take this risk.
This seems to be a very easy-to-think-of truth. When you want to monopolize all the profits, it means that you choose to stand opposite everyone.

 

[Exceed Fabrication]

Let me start with my recent thoughts. About factories and supply chain.

The supply chain is very important. Without a strong supply chain, it is like a car engine without power. No matter how hard you step on the accelerator, it will not run as you wish.
If you and your competitors use the same supply chain, it is difficult for you to be much better than your competitors, and of course it is difficult for you to be much worse than them. The brands that cooperate with this factory will be tied to an average quality line.
A factory gave me an example. Their electrophoresis fluid is imported from Japan, so even if you ask them to switch to Chinese products to save costs, it is unlikely because they can't extract all the fluid in the electrophoresis pool and replace it with cheaper ones, which makes their costs and quality almost fixed.
So what if you want better quality? My experience is: try to cooperate with factories that have experience in cooperating with automobile factories. Because these automobile factories will have higher requirements for the production system of these factories, so you can get these benefits. Of course, these factories often have requirements on the order quantity of customers. If it is only 50 or 100 pieces, they are not very interested. Maybe they will cooperate with you with a try-it attitude, but they will soon lose patience.

So this puts brands that are trying to start a business and have quality requirements into a death triangle:
1. You want higher cooperation from the factory because you want to quickly make unique and competitive products, and you hope that the factory can quickly help you make samples to verify your ideas
2. You want better quality control because you know how important early word-of-mouth is to a new brand, and you definitely don't want to lose your first wave of customers.
3. You want a lower MOQ because you don't have much money and order quantity yet, you don't want to take too much risk, but use the limited funds to make more attempts.
This is almost impossible for factories, especially a few years ago, because of the economic prosperity, factories have no shortage of orders, and I'm not even sure you have the opportunity to enter the door of those "what you want" factories.
So this is an opportunity for entrepreneurial brands: the factories that you didn't have the opportunity to contact before, because their business is not good, so they choose to be compatible with more small customers. For these customers with small orders, they have the opportunity to contact higher-level factories, so as to gradually establish their own supply chain. So perhaps this confirms the saying: Crisis is often accompanied by opportunities.

The factory owner shared with me some advice for new brands: If you are a startup brand and you are not willing to make low-quality products, I do not recommend you to look for big factories.
Maybe you will be attracted to see that big factories make those high-quality products for the brands they cooperate with, have a complete and mature production system, experienced designers, and maintain a stable production capacity every year. But you overlooked one thing: the reason why big factories can become big factories is that they have several big customers, so they never lack orders, and they will not spend too much time on small customers (small orders and high requirements). Their factories support hundreds of employees, have huge factories, expensive equipment, and huge expenses every day. They need large enough orders to keep running. So it's all about matching, and those smaller factories that value quality may be a better choice.

 

[dzalez]

Starting a brand in the off-road community is a huge undertaking, but it is also one of the most rewarding ways to contribute to the hobby. Most successful startups in this space begin by identifying a specific problem they have encountered on the trail and designing a rugged, high-quality solution for it. Building trust with fellow Jeep owners takes time, so focusing on durability and real-world testing is usually more effective than just having a flashy logo or heavy social media presence. As your products start gaining traction and you transition from a garage hobby to a legitimate company, you really need to prioritize your legal foundation. Utilizing a service like https://www.incorp.com/ can help you handle your business formation and registered agent requirements, ensuring you stay compliant while you focus on manufacturing and design. Getting your entity set up correctly from the start protects your personal assets and gives your brand the professional backing it needs to grow in a competitive market.

Sponsored