MacroFab, Inc.

How Crowdfunding Has Changed the Manufacturing Industry

By The MacroFab Team  |  August 22, 2016

The old model for entrepreneurs to bring products to market went a little bit something like this. You have an idea for a product. You raise enough capital to mass produce it. You hope the market loves it. This approach has a number of drawbacks. What if your idea is great, but you can’t raise the capital? What if your idea is terrible and the market ignores it?

Fortunately for today’s innovators, crowdfunding solves both of those problems at once. Rather than mass producing a product and hoping for the best, inventors can now develop a prototype and share it with the market. If the market loves it, they will provide the capital necessary for production. If they don’t, you can go back to the drawing board without wasting money and other resources. Consumers get more products to choose from and entrepreneurs decrease their risk. A true win/win.

What does this mean for the manufacturing industry?

Crowdfunding has created strong demand for low volume manufacturing, made in America, with quick turnaround times, and reasonable prices. That’s something that would have been unthinkable just a few years ago, but a new breed of contract manufacturer has been born to meet this challenge.

Manufacturers who service entrepreneurs who leverage crowdfunding platforms like Kickstarter and Indiegogo, have found ways to use sophisticated software that allows them to shift quickly from one project to another, making small runs economically feasible and wait times short. This technology also sharply reduces the cost and hassle associated with prototyping so that inventors can give the market something to see.

Manufacturers in this category also make project management easy for hardware designers. They provide an online application for easy ordering, project tracking, and reporting. The service provider sources the components and passes volume discounts on to customers.

Meeting needs across the product lifecycle

Some of these modern service providers have also realized that crowdfunders need support beyond just manufacturing. They also offer inventory management and fulfillment services. When a customer places an order, it is shipped directly from the manufacturer’s facility. The service provider becomes a partner that takes the product from concept to customer.

Crowdfunding and this new type of manufacturing service make it possible for more and more people with great ideas to test their appeal to consumers. Today’s innovators are freed from the limitations imposed by the old model that was developed to support big corporations. This is a great time to be an inventor and a buyer.

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