How To Get Started With Product Manufacturing

Product manufacturing is the process of transforming raw materials into finished goods using machinery, tools, and labor.

Establishing a reliable production process can increase efficiency. Ricardo Larroudé, co-founder of the fashion and footwear brand Larroudé, says on Shopify Masters that his company gained efficiencies by bringing production in-house. After investing in machinery and opening a dedicated facility, he gained full control over production and cut turnaround times from 120 days to just three weeks. 

Learn about some of the most common manufacturing and production processes and how to get started so that you can choose the right model to meet growing demand. 

What is product manufacturing?

Product manufacturing is the process of transforming raw materials into finished goods. The manufacturing sector follows highly synchronized workflows in which various departments, like engineering and procurement, collaborate to manage physical material handling, maintain strict quality control, and organize specialized human labor. 

Different manufactured products follow distinct production processes shaped by the properties of their chosen materials. These processes fall into two broad categories: 

• Process manufacturing. For example, thermal blends or chemical formulas create products like beverages or skin care.

• Discrete manufacturing. Tangible and dismantlable items like automobiles, apparel, or electronics are built and assembled.

Within these two broad categories, there are many specific approaches to product manufacturing. 

Common product manufacturing methods

Here are the primary manufacturing methods used today:

• Mass production. A highly automated method that uses assembly lines to create vast quantities of the same item. The goal is cost-efficiency at scale.

• Contract manufacturing. You hire a third-party manufacturing facility to handle the production and assembly of goods. This lets businesses take advantage of factory infrastructure and advanced manufacturing technologies without investing millions in their own equipment.

• Made-to-order manufacturing. Production is triggered only after a customer places an order, eliminating the need for a large stockpile of surplus inventory. It minimizes warehousing risks and waste but requires an agile supply chain.

• Small-batch manufacturing. This involves producing limited quantities of a product to test market interest, preserve working capital, and refine based on customer feedback.

• Custom manufacturing. A highly personalized approach where items are tailored to each client’s exact specifications. This method sometimes involves more manual labor and specialized skill sets, such as machining, welding, and fabrication.

• Job shop manufacturing. Organizes production by specialized functional areas rather than an automated assembly line. Custom or low-volume batches move through distinct stations based on their processing needs, making job shop manufacturing flexible but labor-intensive.

• 3D printing. An additive manufacturing method that builds objects from a digital CAD file, letting brands prototype and create intricate, low-volume custom goods.

How to get started with product manufacturing

1. Design your product
2. Estimate manufacturing costs and pricing
3. Draft a business plan
4. Find and vet manufacturers
5. Prepare to negotiate
6. Produce prototypes and samples
7. Launch and iterate

Taking a rough concept to a run of your final product requires meticulous project management and strategic focus. Here are the basic steps to get your design out of your head and onto the factory floor:

1. Design your product

The manufacturing journey begins with product design, or translating your creative vision into a real-world product. A product designer typically uses software to create technical drawings, industrial computer-aided design (CAD) files, or comprehensive tech packs for an apparel line. 

During this critical step, you select your materials and production method, which will shape the assembly methods, regulatory requirements, and baseline safety thresholds. Once you’ve proven your product’s baseline utility, a product designer determines precise measurements and material specifications. Your final design becomes the road map you share with your future factory partners. 

2. Estimate manufacturing costs and pricing

To build a sustainable business, your retail price needs to cover production expenses and provide a profit. Before setting a price, itemize direct expenses related to producing a single unit, including: 

• Total cost of goods sold (COGS).COGS is the direct operational cost of producing an item, including product assembly, factory labor, and quality control inspections. 

• Production costs. Raw materials, component sourcing, and any specialized labor required for assembly.

• Manufacturing overhead. Factory setup, tooling dies, custom molds, and ongoing equipment maintenance.

• Landed shipping and logistics costs. Domestic or international shipping costs, duties, tariffs, customs brokerage, and internal inventory management costs required to move inventory to your fulfillment center. 

Once you know your absolute cost floor, choose a pricing strategy to set your retail price. Here are two common approaches:

• Cost-plus pricing. Take your total landed cost per unit and add a flat percentage markup (such as doubling or tripling the cost). 

• Value-based pricing. Set your price based on the customer’s perceived value and market positioning.

3. Draft a business plan

A business plan aligns your production choices with your financial reality and market strategy. While a standard plan covers your target audience and marketing channels, a manufacturing-specific business plan explicitly maps out your supply chain logistics and cash flow. When building your plan, ensure it includes these operational elements: 

• Production and sourcing strategy. Detail how and where you’ll make your product. Specify whether you’ll use domestic or international contract manufacturers, your chosen manufacturing method (such as small-batch or mass production), and your fallback plan if a primary supplier faces disruptions.

• Inventory and demand forecasting. Outline your initial production volumes based on conservative market data. Detail how you’ll balance inventory levels to avoid locking up capital in surplus stock while preventing prolonged stockouts that damage customer trust.

• Cash flow and working capital management. Manufacturing requires significant upfront capital. Your financial plan maps out how you’ll cover deposits, tooling fees, and raw materials, factoring in the cash conversion cycle, or the gap between paying your factory and receiving revenue from customers.

• Milestones and scaling triggers. Define clear operational milestones. For example, specify the sales volume or growth rate at which you’ll transition from expensive small-batch production to cost-effective mass production.

4. Find and vet manufacturers

Your manufacturing partner shapes the quality of your product and your company’s ability to scale. But founders often face a chicken-and-egg dilemma at the start: You can’t secure a factory partner without a track record, but you can’t build a track record without a factory partner. 

Heidi Zak, co-founder of lingerie brand ThirdLove, recalls on Shopify Masters how she spent a month in China actively pitching and “practically begging” manufacturers to partner with her brand when she had nothing but raw prototypes. 

Heidi advises founders to focus on selling the long-term vision. When pitching an unlaunched brand, present a data-backed picture of where your brand intends to be in five to 10 years. Factories want to secure high-volume clients for the future, so framing your startup as a fast-growing, scalable partner makes taking a chance on your initial run worth their investment.

Use this pitching phase to vet prospective manufacturers’ communication style and transparency. According to Shopify’s guidelines on choosing suppliers, a legitimate, reliable supplier openly shares business registrations, verifiable facility certifications, and customer references. Heidi says that the best factory partners will be realistic and upfront about potential production challenges.

5. Prepare to negotiate

Once you get a foot in the door, be prepared to negotiate variables like minimum order quantities (MOQs) and payment terms. When Tower 28 launched, founder Amy Liu negotiated lower starting MOQs of around 2,000 pieces per stock keeping unit (SKU) by highlighting that the factory had already manufactured products for top-tier global brands like Ilia. 

Factories typically reject small runs from unlaunched startups because they fear an inexperienced client will arrive with messy technical specs, require endless revisions, and disrupt their assembly lines. 

By pointing to the factory’s work with Ilia, Amy signaled that Tower 28 understood their premium quality thresholds and operational workflows already in place. Reassuring the manufacturer that her brand would be an organized, low-risk partner gave them the confidence to approve a smaller, flexible initial production run.

6. Produce prototypes and samples

Before committing capital to a full commercial production run, transition your product from a digital blueprint into a physical object. This stage bridges the gap between a prototype and a factory sample. These two distinct steps serve different purposes:

• Prototype. Your initial proof-of-concept is typically a rough, handmade, or 3D-printed version you create independently or with a designer to test the basic form, fit, and function. 

• Factory sample. Once your prototype is finalized, you send its technical specs to a manufacturer. The factory then creates a sample using its assembly line machinery, tooling dies, and materials. 

Evaluating factory samples is an iterative process that helps to identify aesthetic flaws, structural weaknesses, or friction on the assembly line before you sign off on a massive production order. Reviewing these physical iterations lets you test your materials in the real world and implement quality control protocols. 

Dan Demsky, CEO of Unbound Merino, sent out 500 inquiries on Alibaba, the B2B wholesale marketplace, in his search for a supplier with an existing factory relationship. On Shopify Masters, he says his team narrowed the field to 20 options and requested physical samples from five suppliers. Once they chose a supplier, the founders flew to Shanghai to stand alongside workers on the production floor with measuring tapes during their first sample run to ensure absolute precision.

Testing factory samples is also where you ensure your product accommodates real-world users. Intimate apparel brand Knix rejects the standard industry shortcut of testing prototypes on a single medium size and mathematically grading the rest up. On Shopify Masters, founder Joanna Griffiths says that Knix’s technical design team conducts live fittings, wear-tests items, and refines every single item across all 99 sizes they manufacture, building credibility before mass production starts.

7. Launch and iterate

With approved samples in hand, begin your first official production run and bring your manufactured goods to market. But final delivery to the end customer isn’t the end; it’s the start of a continuous feedback cycle. Continuously optimizing your production process after launch lets you minimize waste, unlock long-term cost savings, and ensure strong customer satisfaction across the entire product life cycle.

Once customers receive the initial run, monitor your product reviews, return rates, and support tickets to gather direct feedback. Use this data to iterate on your next design batch, fine-tune factory workflows, and refine your supply chain management strategies. 

When sustainable brand LastObject launched its reusable cotton swab, it used early consumer testing and post-launch feedback to optimize the manufacturing process. Early reviews revealed the glue securing the flexible buds to the rigid nylon core needed to be much stronger to withstand regular washing. The founders took this feedback to their manufacturing partners and iterated on the design.