Exercise Equipment: A Manufacturing Success Story
The Challenge
The client operates in the exercise equipment industry and sought our support to explore alternative manufacturing options. They were facing issues with quality, lead times, and pricing from their current supplier and aimed to make improvements without disrupting their sales flow.
The client’s product quality was below market standards, negatively impacting customer satisfaction and brand reputation. Lead times were too long, causing frequent stock shortages and cash flow disruptions. Their current supplier was unresponsive and charged more than necessary.
Our Solutions
- Conducted thorough due diligence on multiple factories in the exercise equipment sector.
- Collected and analyzed samples to evaluate material consistency and quality across suppliers.
- Identified that the current supplier was a drop shipping intermediary using a low-quality factory that cut corners on materials and design.
- Secured a new factory offering:
- Superior product quality
- Better pricing
- Flexible lead times and scalable production planning
- Superior product quality
- Developed and implemented a weekly purchasing plan:
- One container shipped weekly
- Only a 20% deposit required to maintain shipping cadence by purchasing raw materials in advance to have stock.
We began by performing extensive due diligence on a range of factories within the exercise equipment market. We collected product samples to assess the material quality and consistency. During our investigation, we discovered that the client’s supplier was actually a drop shipping company partnered with a low-grade factory that compromised on materials and design to save costs while overcharging the client. We then sourced a new manufacturing partner that not only provided higher quality products at a better price but also offered greater flexibility in production, payment terms, and lead times. To streamline operations, we introduced a purchasing plan that enabled the client to receive weekly container shipments with only a 20% deposit upfront.
The Outcome
- Transitioned client from a drop shipping model to a direct factory partnership
- Achieved:
- Significant increase in product quality
- 25% Reduction in per-unit cost
- Decreased lead times from 30 days to weekly shipments
- Significant increase in sales.
- Improved customer satisfaction and retention
- Enhanced cash flow management through reduced inventory holding and lower upfront costs
The client successfully transitioned from working with a drop shipping supplier to a direct relationship with a factory. As a result, the quality of their exercise equipment improved substantially, leading to better customer satisfaction and fewer complaints. We also reduced their cost per unit and shortened lead times from a 30-day cycle to weekly container shipments, leading to increased sales. This change not only allowed them to stay consistently in stock but also helped them minimize cash flow strain by reducing the capital required for inventory.
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FAQ
How can I verify if my supplier is actually a factory or just a dropshipper?
Request a factory visit or video tour showing production equipment and your products being made. Dropshippers will make excuses or show generic facilities. Also check if they can answer technical manufacturing questions and provide detailed production schedules. We conduct physical audits to verify factory legitimacy.
What are the warning signs that my "factory" might be a dropshipper?
Poor product quality despite "factory direct" claims, inability to customize products, vague responses about production capacity, refusal to discuss raw materials, and prices that don't decrease with higher volumes. Generic packaging (not customized) is another red flag.
How did you move this fitness brand from 30-day cycles to weekly shipments?
We found a factory with available production capacity and negotiated flexible payment terms (20% deposit instead of 50%). This allowed smaller, more frequent orders. Combined with better inventory planning and consolidated shipping, we established weekly container shipments.
Won't weekly shipments cost more than bulk monthly orders?
Per-unit costs are slightly higher with smaller batches, but you save on inventory carrying costs, reduce stockout losses, and free up cashflow for marketing. This fitness brand found weekly shipments more profitable because they could respond to demand changes and never missed sales due to stockouts.
I've already paid a deposit to what might be a dropshipper. Can I get it back?
This is challenging. Document everything, attempt to negotiate a refund citing quality or delivery issues, and consider whether legal action is worthwhile for the amount. Going forward, we help you establish relationships with verified factories and implement payment structures that protect you from this situation.
How long does it take to switch to a new factory?
Plan for 8-12 weeks for a complete transition: factory vetting (2-3 weeks), sampling and quality matching (3-4 weeks), first production run (2-3 weeks), shipping (2-4 weeks). We manage inventory overlap so you don't run out of stock during the switch.