entrepreneurialism entrepreneurs factories factory production growing a business manufacturing starting a business The manufacturing business

From kitchen table to factory floor

by 2 October 13, 2011

Someone recently asked me to talk about how we grew from sewing in-house (literally, in my house. Er, rather, condo.) to finding a manufacturer. Honestly, I knew from the start that I had no interest sewing anything on a large scale myself. Before I even had a website I tried to find some sewers on Craigslist and did end up working with several for a brief time. That was a mostly discouraging exercise because I expected that people who answered ads for "professional seamstress/sewer" would actually be more skilled than I was, and frankly, some weren't. It was also a pain managing them, cutting, getting them the materials and everything. I started searching for a contract sewing company in the Chicago area from very early on. This was even more discouraging than the Craigslist experience. One, when you don't really know what you are looking for, finding a contract sewer is hard. Especially when at first you don't know the words "contract sewing," or "cut and sew," or CMT (cut, make, trim). Then, you make appointments with the ones who didn't run screaming from the telephone when you said "baby carrier" and go see them and the few who will actually consider quoting you give you crazy high labor-only quotes that are like 75% of the full retail price that the carriers are going for then and you despair that this will never, ever work. I did one run of mei tais with a local place that agreed to give it a go. While they were professional and polite, I made compromises on materials and design that I didn't really want to make because they said the way I really wanted to do it "couldn't be done." So, even though it was only 100 mei tais, at the time it was a lot to me, and I was disappointed with the end result. Luckily, I then found the local sewing house that, to this day, makes our mei tai carriers (well, a former employee of the original sewing house started his own business after that one closed and now his company makes the carriers). In 2007 when we were trying to bring the pikkolo to market, we searched for another local sewing house. I felt like this product was more complicated than the mei tai and I wanted to diversify. I found another local place, with about 25 sewers, who had experience making bags and camera cases, and they made the first few thousand pikkolos. I am lucky in that I live in a large city and one that used to be a manufacturing center. So there are still businesses around doing cut and sew. It's hard to find them, and textile, apparel, and contract sewing businesses are notorious for not having websites, or having bad ones (especially 5 years ago), but I'm really good at googling and was able to find a lot of phone numbers and clues to go on. The AIBI (Apparel Industry Board Inc.) in Chicago was also a very useful resource for sourcing raw materials and contractors, as well. When the pikkolo quickly became our number-one seller and I realized the labor costs were probably going to preclude any possibility of international regional distribution, I started looking for overseas alternatives. Again, my mad google skillz enabled me to find a place in Estonia, where we produced the pikkolo for a time. Since then we have produced the pikkolo in China and Egypt, as well, and are about to also resume production in the United States, on the west coast, after searching really hard and finding an affordable domestic manufacturer. I plan to continue to consider overseas sources as well that make sense for the business. With the exception of Estonia, I have visited every country or specific facility that we manufacture in, and intend to always do this going forward. What's tricky about making the jump from individual seamstresses to contractors is managing minimum order quantities. In order for it to be worthwhile (in terms of time to set up a sewing line) for most contractors, they will require you to make a certain minimum number of units. They also, of course, want to know that you have long-term intentions to work with them, because if they invest time in getting to know your product and figuring out to integrate its production into their business, they certainly don't want you to sew with them for a couple months and then move on. Most domestic manufacturers will only require a few hundred pieces, because nearly all domestic manufacturing is offering a labor service. This means that the client sources and does all the purchasing of the raw materials and the contractor is only cutting and sewing the raw components to make the finished item. Many overseas contractors are also sourcing, purchasing raw goods, and making the finished item to your specifications, which they are then selling to you--the manufacturer. Some overseas contractors do cut and sew separate from sourcing/purchasing (or will help with sourcing/purchasing and simply pass through the cost of the goods without mark-up), but most large facilities, especially in Asia, are doing all the sourcing and purchasing and selling the manufacturer a finished good. In these cases, there is a large jump in minimum order quantity. This quantity is driven by the minimum order quantities of the raw goods they must purchase to make your product for you, but instead of working with a few hundred pieces you are most likely now going to be looking at a minimum of 1,000 to several thousand pieces per item (of one color; it's not usually the number of units that is hard for small, growing businesses, it's that to get a reasonable SKU assortment, they could be looking at having to order 15,000 units for example). This is why it's amazingly difficult for small growing companies to make the leap from one production level to another, especially if they are trying to bootstrap their business. Working overseas almost always requires that companies raise capital, either by obtaining debt financing (small business loans, loans from friends or relatives) or selling equity (get friends and family to invest in the business by buying a stake in the business--i.e. putting in cash that will not be repaid to them until the company is sold or another party buys their shares, or angel investors--sort of like friends and family, except they don't care if you're supersuperniceandsweet and usually expect a higher rate of return, or venture capitalists, who *really* don't care if you're nice and sweet and expect an even higher rate of return and have pretty firm exit timelines). The above is why it's been incredibly frustrating for businesses trying to grow the past 3 years; access to capital is key to growing a successful business and bank lending has dried up. No matter how much promise your idea shows, even proven sales success, it's been very difficult to find financial institutions who will loan money. It's gotten better in the past year or so, but it's still bad. Anyway, that' s the story of our jump from kitchen table prototypes to factory-made products. It's a story that continues as we keep striving to find and hold onto the perfect manufacturing partners that can make our items exactly how we want them, on time, and at a cost that we can afford, given the prices consumers are willing to pay for products.
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