Working with clothing manufacturers overseas is a natural progression for many fashion brands. The move is often necessitated by two main factors – a need for larger volume production or a necessity to reduce costs and increase margins.
Finding clothing manufacturers overseas or any fashion manufacturers for that matter has got easier over the last few years. There has been an influx of multiple online fashion manufacturing directories focusing on different areas and verticals of the fashion industry. Yet, working farther away is not got much easier.
It is not impossible either! It is important to go into these new relationships and make this big change with eyes fully open.
Many fashion brands make the mistake of getting excited by the potential savings they will make by moving their production offshore, and neglect to see the obstacles and challenges such a move will instigate.
No challenge is insurmountable, but choosing not to recognise it early enough and deal with, will only compound over the long term and create bigger problems for you and your business.
Let’s explore deeper the main challenges that western brands thinking or working with clothing manufacturers overseas encounter and need to be aware of.
1. Language and Communication
The challenge of communication and the gap it creates is the major factor that underpins many of the problems that develop in a manufacturing relationship between western designer brands and offshore or overseas manufacturers.
Most manufacturers do not know the language spoken by western buyers. The common language almost 100% relied on is English – a second language to both parties.
Verbal and written communication needs to be conducted via this commonly spoken language. But what neither party realise at the start is, that the “English” they speak without a doubt will be different. Many words have a different meaning from one continent to another and when learnt as a second language. Much of the fashion industry terminology has slight variations between countries and geographical regions and that can and does cause problems.
One way to overcome this challenge is to visit often the factory of your choice and develop a close personal relationship with them. In that way, you both get to know each other better and learn to be able to “guess correctly” each other’s instructions.
The use of visuals (sketches, tech packs, visual references) is even more important in these relationships. Taking the time to understand at the start how the factory works and reads visuals, the measures they work with (some use centimetres, others millimetres, some inches….) for example will be of great help later down the line.
Taking the time to learn or sync with your factory on how you both call certain details and manufacturing techniques and agree to always use this terminology would really make a difference.
Don’t try to teach the factory new terms and words – work with what they know already. Adapt to them and their ways of working is the best advise brands must take on board and to heart.
2. (Poor) Negotiation Skills
Many clothing manufacturers overseas lack negotiation skills, especially the smaller factories. Because of this, they fail to convince foreign buyers to do business with them. This inadequacy is mainly due to poor training or lack of any training in marketing and negotiation skills.
Larger factories, on the other hand, have developed these skills over time, but often they are shaped by the local culture and customs. In some (Arab for example) cultures “negotiation” is considered almost compulsory and a sign of respect between the two parties. Spending time negotiating even small amounts is just part of the process. Many westerners do not understand this and perceive this behaviour as “difficult” and “untrustworthy”.
Yet again, going overseas to work with entirely different people culturally is great so long as western brands are aware of the cultural differences. Moreover, they need to accept them, be open to learn about them and “fit in”.
So often the expectation is placed on the manufacturer to change and adapt to our western ways. Yet we are going in search and need of them and not the other way around. Understanding this is key to any business relationship, be it in fashion or another industry.
Over the course of time and developing a trusting and good working relationship, thinking, processes and behaviour can be “changed”, but this will take time. Recognising this at the start and again – gracefully accepting it and adapting to it, is the only and best way forward.
3. Delivery Delays
Many of the labour-intensive countries, fall prey to a huge stereotype for not delivering on time or being untrustworthy. But as always, everything goes hand-in-hand and there is more to this than how it looks at first glance.
To begin with, foreign brands and buyers need to initiate conversations with a genuine interest in buying and manufacturing and make up their mind whether they want to work with offshore fashion manufacturers or not. All too often, western buyers explore the possibility of working with clothing manufacturers overseas, tempted by cost savings. But once the conversation gets serious and the factory asks for sampling or actual work – the western brands get cold feet and disappear. This naturally leads to a mistrust on part of the foreign manufacturers, which clouds over future interactions with potential new clients.
Another factor in the perception of delays is due to the different climate these factories exist in. Many overseas manufacturing hubs are located in countries that have extreme weather climate. Monsoons, extremely high and low temperatures are some of the factors those of us living in Europe and other western countries do not take into account. Naturally, weather conditions have a big effect on manufacturing. Examples would be garment drying time during monsoon time in Asian countries or drying edge paint on leather goods during the hot summertime periods, even in some European countries.
It is advisable to visit the factory you intend to work with (or already work with) and understand the conditions that affect their work.
See how you can adapt to them. Building in more time in the critical path is the least that can be done.
Yet another factor that no doubt will have an impact on manufacturing timelines would be the national holidays taken by workers in the country you chose to manufacture.
We all know that Chinese New Year is around February time every year and most brands working with Chinese factories learn to adapt to this and factor in their critical path management calendar.
But what about other national holidays China may have? What about national or religious holidays in other countries?
Many clothing manufacturers overseas are located in Muslim countries where Ramadan happens once a year for a full month. During this time, work slows or even can stop. In some counties like India, the workforce within a factory usually consists of a mix of Hindus and Muslims. They both have different religious holidays throughout the year. This means that most of the time a factory does not work to its full capacity.
While this may seem like it is a problem that needs to be addressed by the factory and not the western brand – the truth is that the culture of these countries allows them to accept this as a fact of life and not bother or try to change it too much.
So again – western brands must learn how to adapt and put processes in place to combat the effects of these events and conditions.
On average western brands can expect Indian manufacturers delivery lead-time to be high. For countries like the USA, it ranges between 85 to 100 days and for the European market, it is around 70 days.
On the other hand, countries like China quotes a lead delivery time of fewer than 60 days. Other manufacturing countries delivery lead times quoted also vary. This often is due to the various levels (and lack of) civic, professional and social infrastructure that prevents manufacturers from producing on time.
4. Worldwide Trading Blocs
Clothing manufacturers overseas today are hugely influenced by the presence of trading blocs.
Trading blocs such as NAFTA (North American Free Trade Agreement), European Union, and ASEAN (Association of Southeast Asian Nations) are very powerful. These blocs in general, reduce or eliminate trade barriers on member nations and impose them on non-members.
Some countries like India for example, who is not a member of these trading blocs, leaves manufacturers and exporters facing difficulties in exporting goods to member countries of these powerful trading blocs.
Looking in advance into the logistics of moving raw materials and finished stock to and from such countries is imperative.
Finding a good clearing agent to work with is essential. Allowing extra time for customs clearing and delays, and understanding the actual extra cost this will add to your products is a must.
5. Currency Risk Management
Many of the clothing manufacturers overseas are located in countries that do not have a stable currency.
The unexpected and impossible to predict and control currency fluctuations in the exchange rate affects the competitiveness of many manufacturers.
Western buyers want to work to fixed prices and margins and are unable to accept and adopt a fluctuating price model. These fluctuations often lead to sudden gains and losses, which are left for the manufacturer to absorb and deal with if they want to work with western buyers and brands.
While there is no quick fix to this issue – some countries have recognised it and try to do something about it. The Indian government, for example, has introduced a system that adjusts the duty drawbacks to exporter businesses accordingly to offset any losses incurred. But this only helps partially. Furthermore, the government provides training for every member of its export promotion council. The training focuses on building awareness of the dynamics of currency fluctuation. This has led to big improvements in the working relationship between western buyers and Indian manufacturers. But that is not the norm.
Many 3rd world countries with manufacturing hubs are volatile in terms of currency and seem unreasonable and unpredictable to deal with. They change their prices from one season to another without a good reason or warning – or so the western perception is.
Again – knowing this in advance and building into your pricing structure a buffer to allow for these sudden fluctuations is the only way to protect your business and still – benefit from the advantages that manufacturing overseas offers growing brands.
In summary – fashion manufacturing near or far is never without its problems.
Just like anything in life, fashion brand owners and businesses must carefully weigh the pros and cons as well as the cost of any movement of manufacture.
The products brands offer are at the core of their business. Without products to sell there is no business. So ensuring that the supply and manufacture of these products are reliable and efficient is paramount to the long-term success of any such business.
Manufacturing abroad can be fun and offer great benefits to growing fashion brands – but any such endeavour must be carefully undertaken with an open mind and willingness to learn and embrace the cultural differences that no doubt will underpin such a relationship.
Building trust and smashing the false existing stereotypes is a challenge that must be accepted and overcome. The good news is that many before you have done it and there is much advice and information that can be used to support you. The bad news is – once you decide to manufacture overseas, you would face this challenge over and over again.
Learn, adapt and always be better organised than your manufacturer will lead to long term benefits and business success.