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Monday, October 22, 2012

Getting it Made - Part 2. Deciding whether to use UK or Overseas production.

In my last post I already talked about how you go about selecting the right manufacturer for your fashion business. But should you use a UK supplier or one based overseas?

It is usually practical and cost-effective to produce goods overseas if you are ordering large quantities. If you are manufacturing offshore, it is helpful if you can produce your first samples in the UK to ensure you get the pattern and the fit right; this will minimise the chances of mistakes when the full run is then made offshore. Consider getting manufacturing quotes for both UK and overseas production so that you can offer competitive prices to a buyer wanting to place a large order.

The benefits of producing overseas

1. Costs: offshore production is generally more cost-effective, especially when producing large volumes. Production costs will vary from country to country.
2. Machinery and technology: unfortunately there has been a lack of investment in manufacturing for many years in the UK, and offshore factories are more likely to have the most up-to-date machinery and CAD/CAM systems. This is particularly applicable to accessory and shoe production.
3. Large pool of skilled labour: some countries still have a pool of skilled labour of specialists workers, particularly in craft areas and embellishment. If the process is time-consuming, with cheaper labour you are able to be far more adventurous.

The disadvantages of producing overseas

1. Costs: economies of scale dictate that small volumes would not achieve favourable costs, and some factories have high production minimums. This is changing, however, and more and more overseas units are gearing up for smaller volumes. Also, you will most likely be subject to currency fluctuations which can affect your profit margin.
2. Quality control: it will be harder for you to control your production. You will have to factor into the production cost your travel expenses to visit the factory. You can sometimes work through an agent; however, they will charge you a fee and it is not always easy to find an agent you can trust to adhere to your high standards.
3. Communication: does your factory have English-speaking staff, or can you speak the local language? How easy will it to communicate what you want? You also have to take into account the time differences and whether they have good broadband connections.
4. Logistics: if you are having samples made overseas you will have to allow for the courier costs of sending raw materials/toiles/samples back and forth. Some of this would be avoided if the factory are sourcing materials locally for you. When working out your production schedule you must allow shipping time (could be several weeks) and also be prepared for production getting delayed or goods stuck in customs. Transport, delivery and insurance costs will also need to be factored in.
5. Cash flow: until you build a relationship with a factory, they may well want 30 per cent payment upfront and the final payment when goods are collected.

The benefits of UK production

1. ‘Made in UK’ can add value to your brand.
2. Costs: your production costs may be higher, but you will have more control over them and they won’t fluctuate.
3. Smaller quantities: UK factories are more willing to produce small quantities.
4. Control: you will be on hand to check the quality and deal quickly with any problems that may arise.
5. Communication: you still have to be organised with your production processes, but communication will be much easier.
6. Scheduling: you will be able to produce orders more quickly as you won’t have to allow extra shipping time.
7. Delivery costs: these can be kept to a minimum and you don’t have to worry that your goods will get stuck in Customs.

Disadvantages of UK production

1. Cost: labour costs are far more expensive in the UK, and therefore the price of production will be higher.
2. Skilled labour: the situation is improving, but manufacturing has been in decline and therefore it can be hard to find good sample and production machinists and cutters. Craft workers for processes such as embroidery, appliqué, etc, are also in short supply so costs may be increased and turnaround times may be longer.
3. Machinery: there is a lack of machinery investment, so it may be hard to get your product made.
4. Digitisation: manufacturing processes have been vastly improved with CAD/CAM systems. However, the cost of these systems has been prohibitive for many UK factories.
Consider getting manufacturing quotes for both UK and overseas production so that you can offer competitive prices to a buyer wanting to place a large order.

Buy Design Create Sell for £12.99

Published in association with Country Living magazine, Design Create Sell offers an overview of the fashion industry and a comprehensive guide to setting up and running a small fashion business, including sections on branding, money management, customer research, the production process and finding routes to market. It’s available from the Fashion Angel Shop for £12.99.

Friday, October 19, 2012

Diary of a Fashion Start up - Part 1

We are pleased to host a new series of guest blogs from Meeka Harrison-Topham who's blog my fashion start up chronicles the issues faced by an aspiring fashion business entrepreneur.

Business plan 101

Putting pen to paper and churning out a 15 page document mapping out the backbone of your business can be an excruciating task, despite the wealth of resources and guides at our finger tips via the web. To help me along the way, I decided a bit of interactive focus wouldn’t go amiss, so last Thursday I found myself biking over to Tottenham Court Road to attend a workshop run by Alison Lewy of Fashion Angel, entitled “how to write a business plan”, aimed at fashion design businesses.

While these kinds of workshops inevitably put forward the same guidelines and tips contained in business guide books which you can get for a fraction of the price, the money spent was well worth it  – as the interactive style workshop ensures that you come away with better presentation skills, a clearer idea of the strengths and weaknesses of your idea, and maybe a fruitful contact or two found through networking.

Here are some key points I took away with me from the workshop:

  • A business plan is essential to provide a clear structure for your business, as well as to create momentum and keep you along the right path.
  • Research is key, and will form the most labour intensive part of the process, from looking at your market segment, ideal customer, competitive field, price points, to targeted boutiques.
  • Financial forecasts can be brutal tasks, but are vital in order to draw all the aspects of the plan together in numerical form, and of course ensure that you make money!
  • Business plans evolve – they are not static, so keep on adding to it as your business grows and changes

The workshop put a useful amount of emphasis and time on how to put together financial forecasts, and to monitor cash flows – no doubt both the dreaded nemesis of any designer! So all in all a productive morning, and very useful to meet Alison, who has just written a book called “Design, Create, Sell”, offering advice on cracking the hard nut of the fashion industry, which I’m sure is vital reading…

Thursday, October 4, 2012

Getting it Made - Part 1. Tips for finding a manufacturer for your fashion brand

A challenge for anyone starting a small fashion business is finding a good, reliable manufacturer. This is just one of many fashion start-up topics addressed in my new book Design Create Sell, published by Brightword Publishing.

Every designer needs the skills and support of a reliable manufacturer if they want to scale up their business. Finding these factories can be difficult, so make sure that you use
any friends, contacts or professional networks, and scour the web to identify the best candidates. Once you have done your research and compiled a list of manufacturers, it is important to assess their suitability to be part of your network of suppliers. this can only be carried out by visiting their premises and seeing how they work.

When you visit a potential manufacturer, it isn’t just to assess the physical conditions and their manufacturing procedures, it’s also to get some idea of how organised they are. Look to see if all the trims for the factory’s dockets are kept clearly labelled in one place. Are the working areas clear of clutter and is their paperwork neatly arranged?

The UK Fashion and Textile Association has a directory of UK manufacturers called Getting it Made and there are some LinkedIn in groups, such as Made in UK, which are worthwhile joining. Our Fashion Angel Business Club also provides members with a useful suppliers directory, as part of their benefit package.

Find a manufacturer: a 10-point checklist

1. What other designers do they work for and do those designers have the same quality and pricing strategy as you?

2. What type of products and/or materials do they manufacture?

3. Do they have all the machinery you require?

4. Is the factory willing and able to make your quantities by your deadlines?

5. Are the factory’s health and safety, ethical and housekeeping working practices compatible with your business?

6. Can they achieve the quality that your customers expect, within the price that you can afford to pay?

7. Are the premises easy to get to? Will you be able to pop in if there is a problem?

8. Is the owner/manager the sort of person you can create a business relationship with?

9. Have you discussed, and do you understand, the factory’s payment terms? You are unlikely to get credit terms straight away, but if you stick to your part of the bargain and pay promptly then they may offer you credit in the future.

10. Now that you have compiled a list of potential manufacturers, you have to match the factory to the orders. If your collection is multi-category and includes, for example, jersey, denim and lightweight dresses, then your choice of manufacturer will be determined by their technical capabilities. If, when you visited them, they were making tailored woven jackets, are they going to be able to successfully make chiffon dresses?

  • The most effective way to select the right factory is on the basis of a sample that they make up of the style in question at a cost agreeable to you.
  • You want to avoid being totally reliable on any one supplier, so try to source an alternative as a back up.
Find out more about how to source and manage your sampling and production effectively at our GETTING IT MADE workshop on 3rd July 2013.

More about this topic and the processes you need to have in place when outsourcing your manufacturing is in the Design Create Sell book available
 for £12.99 in the Fashion Angel Shop.

By Alison Lewy