4 steps all founders with products stuck overseas should take to find US-based suppliers quickly so they can still meet customer demands

• The coronavirus outbreak has shut down factories and workplaces worldwide, and both large companies and small businesses are scrambling to meet demand.
• It's a wake-up call for startups who typically have small teams and have to be resourceful to survive.
• Wesley Kang is the cofounder of dress-shirt brand Nimble Made, and he said a major inventory delay made the last few months the slowest since the company launched.
• The slump has highlighted the downsides of working with an international supplier, and now he's working on new partnerships to diversify his supply chain.
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In a matter of weeks, the novel coronavirus outbreak has plummeted the US stock market and slammed global supply chains.

While large companies are certainly feeling the financial turmoil, small businesses face higher risk of permanent closure because they may not have the resources or capital to rise up from an economic downturn.

But this is also a time when a startup's agility can be an advantage. Having a small team of, say, three to 20 people allows a company to quickly adapt to unprecedented circumstances, like a global pandemic.

Wesley Kang, cofounder of dress-shirt brand Nimble Made, said the last few months have been the slowest in sales since the startup launched in October 2018. "Our projected progress for the first quarter of 2020 has been severely delayed," he said.

The brand was expecting a major inventory shipment of new styles and restocked sizes from China before the Lunar New Year back in January. The shipment was delayed until after the holiday break, then the coronavirus broke out across China and many factory employees didn't return to work.

"Our shirts have already been finished and have been sitting on the factory floor since January 24," Kang told Business Insider.

February sales decreased by 45%, and three best-selling shirts are almost completely out of stock or unavailable in popular sizes.

As a lean startup of two cofounders and five remote freelance employees, Kang said this inventory delay is highly detrimental. "We're currently in high-growth mode with a continuously expanding customer base and repeat customers looking for more variety and styles," he said.

Yet it also highlighted the downsides of working with an international supplier, like long lead time, lack of effective product quality control, and low visibility into the manufacturing process. "We've been inspired to get a better handle on our supply chain process and make it into a more sustainable one," Kang said.

To tackle these roadblocks, Nimble Made is looking for a domestic supplier that can provide a more long-term relationship. But that can take a while. "To build a brand new supplier relationship takes an equal, if not longer, amount of time," Kang said.

Here are the steps Kang is taking to forge new relationships and find the right supplier to bolster his business in the middle of a global crisis.

1. Have your specs ready to go

Before you begin outreach, the first step is to have the right materials on hand. Suppliers will want to know the details of your product: how it's made, measurements, and materials.

Tech startups have pitch decks. Clothing companies, like Kang's for example, use tech packs to approach new suppliers, which are like the blueprints for each dress shirt. Each tech pack includes sketches and instructions for every detail from color to fabric, down to the piping and buttons. This gives factories a comprehensive plan to create exactly what you want.

"That gives you a solid foundation between you and the factory, so you both are speaking the same language," Kang said. The company hired a technical designer to rework its patterns, size grading, and tech pack as a first step to working with domestic suppliers.

2. Figure out how involved you want your supplier to be

Some factories will offer a full-service process that includes sourcing materials for a fee, while other factories may only specialize in production - and you'll need to provide the materials. Decide what level of service is best for your business and budget, and how involved you want your manufacturer to be in the overall process.

3. Find suppliers online (or offline, when you're not social distancing)

A simple Google search can lead you to the right suppliers by searching for keywords like "local garment factories in New Jersey." You can then email them your inquiry, though it's also worth giving them a ring. Kang said most places will want to speak on the phone to be able to cover the complexity and specificity of your product.

Before the coronavirus outbreak shut down large gatherings across the country, trade shows and expos were another way to find suppliers, since you can see hundreds of them all in one place. They usually display samples of their products, and some factories specialize in particular areas. "We'll see the dress shirts on display, we'll look at them, feel them, and decide whether or not they're good," Kang said.

4. Start the conversation and ask questions

Whether on the phone or in person, here's the exact format Kang uses to start a conversation with a supplier:

• First, he introduces himself: "Hey, I'm Wesley and we sell dress shirts."
• He explains that Nimble Made is a startup: "I only want to make 50 dress shirts per style because we're so new. Is that something you'd be willing to do?"
• Then, he explains what he's looking for: "The most important thing is the sizing, because that's what we stand for," Kang said.
• Next, he asks the factory representative for their minimum order quantity. "That's going to dictate essentially how much money you have to put up to start a new relationship."
• He asks for the cost per unit (CPU) manufactured, which he said is primarily dependent on material or fabric.
• For international suppliers, he asks for the FOB pricing, or price per unit plus the transportation charges for shipping.

Kang said it's common for factories, especially ones in the US, to have large minimum order quantities, typically around 200 to 300 units. "For a new business, that can seem pretty daunting. So I would recommend understanding that requirement first, because that might dictate whether or not the relationship even makes sense," he said.