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We have already talked about the basics to start a brand, the business model and the importance of a business plan. Now, let’s focus on the production, the most challenging part of the process as it requires a lot of planning, negotiation skills and a good dose of patience.
First things first: who is going to be your production company? Have you decided what kind will be: CMT (cut-measure-trim) or FPP (full package production)? The latter is more expensive, but can save you time and worries. You probably have done a lot of research, talked to friends and people from the industry (who usually don’t like to share their contacts because it’s not easy to find good manufacturers…). Take your time to find suitable factories, investigate their backgrounds and once you feel they can be potential partners, narrow down the list to 3 to 5.
If you have the means to hire a production manager or consultant, go for it. This kind of professional understands the behind the scenes processes and will be able to share knowledge and precious contacts, making things considerably less stressful.
Along with the companies to work with comes the big question: where to produce? There is a trend to bring back manufacturing to the UK and the US, so depending on your segment, it can be a wise decision to do it closer to home. Also, it will be easier to visit factories and a significant amount of money will be saved in travelling, logistics and taxes. On the other hand, production in Asia, and even Eastern Europe, is still cheaper since wages are lower. Take into consideration how important is to be a socially responsible brand and how manufacturers are dealing with labour laws and environmental issues. Regardless of distance, these aspects can have an impact on your brand image. Finally, keep in mind that certain countries are notorious for their expertise. For example, Italy is famous for the craftsmanship of leather goods, especially shoes. Portugal offers great experts as well, with cheaper costs.
Once the names and places are narrowed down, you can start asking for samples. This is another complex issue, as companies need to prove they can produce the items following your quality standards, which is not easy. Check if they have the materials you want, if not, you may need to supply them. Be aware of the sampling charges before ordering and ask for production schedule. It’s not uncommon for small brands miss delivery deadlines because the manufacturer delayed an order to favour a big brand. This can compromise your whole business so be diligent in the contract.
As you followed all the steps above and made your decision, it’s time to close the deal. Even if you choose a factory on the other side of the world, pay a visit before signing the agreement and be 100% clear about payment dates and every other aspect that can harm your company. Negotiating a good arrangement is tricky when you are a start up, so seeking legal advice or having someone to do this with you is highly recommended.
Finally, have in mind that retail/wholesale price is directed affected by production costs, so your positioning in the market must be taken into consideration all times.
Next week we will talk about product development and merchandising, from the first sketches of a collection to retail calendar.