Top 10 Tips When Selecting a Factory to Manufacture For Your Brand
In my product development experience, as an entrepreneur who designs and creates her own footwear label lines, the factory you choose to manufacture your designs is the single most critical business to business relationship you will have. Finding a suitable factory is also one of the hardest and most daunting tasks you will face as an entrepreneur.
Finding a factory to manufacture something for you is easy; but finding the right factory for your brand is hard. This article shows you how to go all Goldilocks to get a factory which is "just right" for your brand.
There are so many things to consider. The things which went through my mind at the start of my latest factory hunt were: “Do I really want to import and if so from which country and why?” “What will the implications of Brexit be?” “How can I be sure about ethical and sustainable production?” “Can factories scale up and down based on demand?” “Is bespoke product development worth the time and effort?” “What if I pick the wrong factory?” “What if I get a shortlist of 3 really good factories - how will I decide who to go with?”
There are very few resources online which provide the clarity a new entrepreneur needs in finding a factory. I’ve been working with a brilliant factory for 4 years now right here in the UK and will be continuing to sell my award winning #18hourheels as "Made in Britain" products for a good while yet. In addition, to add an exciting twist to my brand tale, I’m now going to be working with a Spanish factory for my products in order to take my premium heels a huge step further in quality, design and comfort for some new and exciting lines.
So I thought it was time I shared the top tips which have served me well in my business adventures.
(1) Be in it for the long term. Visit the factory in person to understand more about the team, it’s expertise, who your key point of contact will be, whether they are interested in what matters to you; and to ensure you select partners who you trust and who trust you. Face to face communication is important so that you can get to know each other properly. I usually visit factories I work with about three times a year and sometimes more if bespoke new models are being developed. A good factory will offer to show you around their shop floor during production. It’s where you can see the manufacturing process first hand and the care and attention which goes in to each piece.
(2) Be open about volumes. Always be completely up front about expected volumes for the next two or three years. Whether this is low or high you must give a clear indication in order to partner with a factory which is happy with producing your volumes. A mutually beneficial arrangement is key. As your brand grows, your volumes will too and any good factory will be happy to be a part of the success and enjoy the improved numbers as a result. The lead times for an order with my UK factory were about 12 weeks as the shoes are handcrafted and then sealed with a machine kiss. Three months after I launched I was exporting to a number of countries across the world and completely sold out due to some spectacular customer reviews. The factory were great and worked really hard to get a big batch of new shoes made for me quicker than the standard lead times. They had a team meeting and found a way to get more stock made and shipped to me so to that I could keep my demand satisfied. The factory benefitted from an unexpected new order from me and my customers benefitted from topped up supply.
(3) Outline your non-negotiables from the start. Be clear about your must haves and red lines - what must the factory be able to produce and how? For example, to manufacture for my brand a factory must produce consistent high quality product and must always produce ethically. If a factory is unable to evidence ethical production then this is a red line for me. It’s also important to me to be able to manufacture half sizes. If a factory doesn’t currently produce them then that’s okay for me; as long as they can scale out the shoe lasts to create the sizes I need. A factory I recently visited makes shoes mainly for the French market. The heels they make have a more slender width fitting than is standard in the UK and the factory’s red line was that they wouldn’t be able to develop wider moulds as it would be unprofitable for them due to the upfront development costs. Having the discussion early on was useful as it meant that we could make clear decisions as to whether we would be mutually beneficial business partners.
(4) Be a reliable partner. Remember that it’s a two way relationship - if you’ve promised the factory some information or designs by a certain date then stick to it. Factory teams have tight schedules to run too and lots of different parts of the process to co-ordinate.
(5) Be clear about specifications. Only develop samples for products you are serious about ordering - it’s important not to waste the factory’s time or your own. Make sure sample requirements are logged clearly on a specification sheet with none of the requirements left to chance or interpretation. I always make sure that samples are made in my size so that I can try them out first and do a “long haul” road test. I also get samples made in my best selling sizes so that I can gain honest feedback from trusted customers who will show me where improvements need to be made. It’s the only way to ensure a perfect product and one which you can produce in large volumes with confidence. This does mean that sampling costs are higher as it’s not the norm to get them produced in more than one size. However, the payback in quality is well worth it so it’s a cost I would never skimp on. Ever.
(6) Protect your intellectual property. Be respectful of the factory’s intellectual property and ask them to be respectful of yours. Don’t share photos of their materials, product or factory unless you have permission. Likewise, at the start of the relationship if you have confidential designs then it’s important to ask the factory manager to sign a non-disclosure agreement to protect both parties. The NDA should be specific to the law of the country in which the principal office of your brand is based. In my case, that’s England even when I’m working with factories in Europe and beyond. The document you ask to be signed should make clear any red lines you have, such as whether you are comfortable (or not) with your intellectual property being displayed at business to business trade shows. If the factory has done a good job for you it’s also nice to show your appreciation; I’ve nominated mine for an industry award as I wanted them to get some high profile recognition.
(7) Do your numbers up front. Ask to see and sign the factory’s terms and conditions before you commission any work. Consider whether you are happy with the payment terms, shipping terms, packaging protocols, returns processes etc. It’s important not to assume, particularly when the factory is based in a different country to your own as standard terms of business can be very different. Know what amount you will pay up front when making an order and how much you will pay on completion or receipt of the order. My British factory gave me discount when paying earlier than the standard terms and after my first two orders also gave me the option of credit which can be good if cash flow is an issue. Personally, I prefer timely payments with early settlement discount to help improve the retail prices.
(8) Don’t be shy when it comes to shipping. Agree with the factory who will be responsible for the product and associated liabilities until which point in the transportation journey. Has the factory fulfilled it’s responsibilities when the product has reached your warehouse doors or is it when the ship docks on the shores? There are lots of import and export regulations to bear in mind and get signed off. My preference is to include shipping costs with the product cost but many companies prefer to pay separately. Ultimately, it’s important to know who is accountable for the product and when. If additional costs are incurred there must be clarity on who is liable for them to ensure a healthy long term relationship. The Department of International Trade is a great resource for export and import advice. I have a brilliant International Trade Adviser and owe a lot of my export and import confidence to her.
(9) Don’t be a stranger. When looking for a new factory I was lucky enough to meet with the Chief Executive of the British Footwear Association (thanks John!) who put me in touch with his counterparts in the countries I was looking to explore. This is a good way of getting the support you need in another country which may well operate very differently to your own. It also means that there are less missed opportunities. John had put me in touch with APICAPPS (The Portugese Association of Footwear Components) and there will be similar organisations for most fashion industries. Whether you a find a factory or not through this route, you will certainly learn a good few things to help you along your way. It’s also well worthwhile visiting trade shows to find manufacturers, even if it’s a wholesale show as many producers will exhibit their own labels there and be happy to talk about manufacturing for other brands as well. For me, the British Footwear Association has been a good business friend.
I also got some hugely valuable help from contacts in the industry itself. A contact I made through an awards panel interview (thanks Ben!) gave me some great advice on which countries and areas to explore which would be more likely to produce the high quality and style I was looking for. The advice was spot on. In this case, one particular country was a much better fit for my brand than another which is exactly where Ben from Micro-Pak had directed me to.
I also got lots of hands on support from a lovely consultant (thanks Malcolm!) to screen a number of factories and set up meeting times and meeting contacts for me. I first met Malcolm at a trade show where we chatted over coffee about all things shoes. We kept in touch and started working together about 18 months after we first met so it's always worth building meaningful relationships for the long term.
(10) Trust in your business know-how. There are lots of people and organisations who will be willing to help you and your job will be to sift out the ones who have your best interests at heart. In my personal experience, I always prefer to work directly with factories myself and not to use agents. There are a number of strong business reasons for this. Firstly, no-one knows your business or product better than you do and so you will explain your vision best to the factory. Secondly, if you don’t meet the factory team how will you know whether the relationship will work? Thirdly, agents have to make a living too and will work on commissions - this means extra costs and mark up on your product which could make your retail price point unfeasible or your margins unworkable. By all means use an agent to open up a market which you are struggling to find contacts in, but product development is best left to the business experts (that’s you and the factory itself!) If you’re worried about language difficulties when working with factories abroad then hire a translator to attend the meetings with you; it’s a much better use of your budget and a shorter term cost.
I would love to connect with other entrepreneurs to share stories about your product development journeys. Please do leave me a comment on the blog. I hope that my top tips have been helpful. They've certainly worked well for me.