Why you should start your own sewing factory pt.2

Posted by Kathleen Fasanella on Aug 1, 2011 at 4:17 pm / Contractors, Production, Sewing / Trackback

Psychologists say that one of the most stressful things a person can endure is to be responsible for something over which they have no control. I would say that is the perfect description of using a sewing contractor and it’s the worst part. You think all your problems are solved, but you are just trading one set of problems for another, and this time you are in the passenger seat.

Your contractor ships late? Your customers don’t care about your excuses. They want their product. It’s YOUR fault. Your contractor does crappy work? Your customers will hold YOU accountable. And what can you do? The buck stops with you. It has to. You have to accept that you are responsible. I have spent more time growing ulcers and pacing the floor and applying pressure to my sewing contractor, and negotiating that relationship than I have done anything else. Well that, and fixing products that they didn’t quite manage to make correctly.

The above is a quote I pulled from series written by an entrepreneur who has started her own sewing factory. She’s a single mom with four young children, one of them disabled. The first three entries explain how she went from using contractors to setting up her own in house sewing operation -and why. Part four is a list of things she did that I feel optimized her success.

I used to assess a line’s viability with the idea that sales were the weak link but not anymore. These days it’s production. Being that it’s a seller’s market on the services side and feeling as I do about developing domestic operations, I’ve only been working with people who either have their sewing (and are looking to improve it) or who are willing to develop their own sewing operation. The only long term sustainable way to grow a company will be to produce it oneself.

The situation is worse when you consider changes in retailing. Retailers are increasingly less willing to commit to long term purchase orders -which you need if using a contractor- they want immediates. Price is only one facet of the sales equation. They’ll pay a little more if they can buy smaller lots closer to season with the potential to reorder. You can only serve that up if you’re sewing it in your own place. The biggest increase in manufacturing interest I see is coming from retailers. Of course just as many discard the idea once they realize it’s not as simple as they thought but that they’ve thought of it should concern you.

For over five years, I’ve been saying that competition for contract sewing services is tightening. People who produce domestically will have marked advantages over everyone else; people who can sew themselves are selling the most at market. If it’s difficult to find a contractor now, the situation isn’t going to improve. It could be time to start your own sewing factory -before it’s too late.

And what do I mean by too late? Too late means that we will have still fewer qualified people needed to do the work. Pisano and Shih (HBS) argue that we are perilously close to losing the capacity to train the next generation which I mentioned in Consequences of the fashion school bubble. I don’t know any manufacturers or contractors who are satisfied with their staffing, everyone is short handed (by the way, industry salaries are up across the board). It’s pretty crazy considering the number of people out of work. Point is, if you start now, you can probably still find an old-timer (like me) who would enjoy working a few hours a week, training you to cut, bundle and organize production. Once they’re gone… it’s going to be you facing the shortest stack of fabric plies you are willing to risk and cut into them with a straight knife, on your own with no guidance or assistance from anyone, and terrified as all get out. People are doing that now.

Point of fact: contract sewing services are in short supply and are projected to get worse. Sure I know, you’ve heard that domestic apparel manufacturing is one of the top ten declining industries -but don’t believe it. There’s a resurgence in domestic manufacturing because sending work offshore isn’t as low cost as it once was; SC Digest says there’s a coming transportation tsunami and it’s predicted that oil prices will hit $300 a barrel by 2020. Chinese apparel factories are closing left and right (and it’s not just China) and have been since 2008. Articles about why people have left their Chinese factories have become practically commonplace, Fortune has been running a whole series on the return of American manufacturing. Domestic apparel manufacturing continues to increase; manufacturing is the only segment of the US economy that is improving. Did you know?

The biggest barrier to increasing domestic manufacturing that I see is the generational shift and expectations of people entering the market. Many think hiring a contractor is a buyer’s market; they’re placing the contract so they call the shots. It hasn’t been that way for quite awhile. For others who are young and have been marketed to since childhood, they don’t realize they’ve shifted from being a buyer to being a seller. The other problem is that the society in which they were socialized has equated manufacturing with brawn (or worse) rather than brain so few are attracted to it or respect it beyond lip service.

We don’t have the vibrant institutional infrastructure we once did. It used to be that a worker could switch jobs in one city to another plant fairly easily. These days, you often have to move to keep working in the field. At the same time, we’ve lost a lot of plants due to attrition; there was no one to take them on so all that knowledge disseminated and went nowhere. If fragmentation was always a characteristic of this business -and it was outside of first tier cities- it’s worse today.

But back to my original points which are:

  • Domestic manufacturing is increasing and likely to show continuing improvement.
  • Availability of contract sewing services is getting worse every day. Before you were competing with another designer for a slot. Now you’re competing with Norma Kamali, Ralph Lauren and who knows who all else.
  • You need to seriously think about starting your own operation.

If you want to do something like this, we have a whole community of people who can help you with that. And if you want to start a contract sewing operation, I love you already and would be delighted to help with that too.

Related entries:
Is it a crazy idea to go straight overseas to make prototype?
Expert advice from a freeloading manufacturer
Trends and strategies in a tough economy
How the industry has changed forever
How the industry has changed forever pt.2
Kamali has moved production to the US
Who sells the most at market and why
Who sells the most at market and why pt.2
What is Reshoring -circuitously
Consequences of the fashion school bubble
Why you should start your own sewing factory
Recalibration, fast vs slow fashion, something to offend everyone
Slow vs Fast Fashion pt.1
Value Circularity: cotton, colanders & the specialty store market
Trends and strategies in a tough economy
History of apparel manufacturing
What to do when you don’t know what to do
Batch product development
Batch product development 2
Batch product development 3
How to start a homebased handmade sewing business
How to start a homebased handmade sewing business pt2
How to start a homebased handmade sewing business pt3

12 Responses to “Why you should start your own sewing factory pt.2”

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Cheryl
August 1st, 2011
5:10 PM

Hi Kathleen :) LOVE your blog, LOVE your book. I am NOT a manufacturer. I am a seamstress who currently specializes in alterations :) I would love for more production to re-locate to my GREAT COUNTRY-GO USA :) Problem…LACK of people to WORK :( In my area of Southeastern Ohio, there is a HUGE lack of ANYONE who wants to SEW. Young people don’t want to learn how to sew. I envision my business improving so much that I NEED to send customers to other COMPETENT (competent being the operative word :( seamstresses. There are NONE :( I charge $26 per hour, which is a great wage for this area. Of course, since I am self-employed, ALOT of operating costs and unpaid TIME are subtracted from that wage. A person could still make a DECENT living doing what they LOVE if they made the effort. I have discussed this problem with bridal shop owners and other seamstresses. We are AGING. I am 54 years young :) Very healthy and I plan on operating my business for a minimum of 20 years into the future. I haven’t met any young people who are interested in learning my skills. I think this could also be a HUGE problem for a factory trying to bring SEWING back to our USA…….I am not chatting about ‘DESIGNERS’, MANY seem to have NO CLUE HOW to SEW :( I am always amused when I view ‘designs’ that would take HOURS to make…. NEVER cost-efficient…Thanks for listening :) Cheryl :)

alan
August 1st, 2011
8:25 PM

Wow!!! Never thought I’d hear these words from you? Hey Kathleen, here’s what I wrote in 2008…

“Five years ago a small apparel manufacturer had a network of suppliers in close proximity, but today many of those suppliers have gone out of business. Now small business production managers are like orchestra leaders, coordinating the global purchase and delivery of raw materials, the offshore assembly of garments and the importation of finished items to the company’s warehouse. Unfortunately, this type of supply chain came about, not by evolution, but by revolution when the US and its trading partners repealed the Multi Fiber Act in 2004.”

IMO, there is not enough talent (stichers/cutters) in the US to set up a sewing factory…What talent you can find is 62+ and collecting social security. Pretty please caution your readers on the overheads associated with owning a factory either on shore or off shore. Overheads remain week in and week out…sewing is seasonal…two big humps a year.

IMO, east coast companies should set up shop in the Caribbean basin and west coast companies in Mexico.

Best,
Alan

Kate Rawlinson
August 2nd, 2011
2:56 AM

There is a lot of talk about manufacturing coming back to this country (the UK), but the costs are a real problem – even to rent a tiny 250 sq ft space in my part of England would cost me at least £500 a month, plus at least 50% again in rates, etc. That’s a lot to cover for a small operator. I keep reading things about how studio costs are a waste of money for a sole trader and that you should set up at home, but I don’t have the space for that either, and while I think it might be ok for things like bridalwear where you’re working with individual clients, I can’t see retailers taking you seriously in a home environment.

So while we have space as well as skills issues here, I still think bringing more manufacturing back on-shore is the way forward. Aside from the rising costs of manufacturing in China, a lot of stores here won’t deal with suppliers that they know or believe are having garments manufactured in China because of human rights issues. There’s a big trend for ‘made in Britain’ going on, and localism, and so on. In a weird kind of way it seems that sustainability lies in returning to the way things used to happen – people working and shopping locally and putting all their money back into the community surrounding them. But it’s a long way from happening yet, unfortunately.

Cheryl, I would love to find an ‘old timer’ who would teach me their skills and knowledge. I’m very interested in the making, rather than the designing, side of the equation. But I have failed to find a way to learn from the bottom up and have returned to my former, very unsatisfying, non-sewing-related job instead. Maybe I’m just a coward, though!

Kathleen Fasanella
August 2nd, 2011
8:19 AM

Wow!!! Never thought I’d hear these words from you?

Alan, I can’t tell if you’re serious or facetious. If you’ve forgotten, I’ve been writing about this since 2005 but even before then if you consider my book.

If you’re being facetious, you’ve long criticized me for my position. I understand why but this isn’t an either or proposition. You must do what works for you. But more importantly, it is very unfair that you put me in this position because you and I debated this publicly before. At that time, I respected you to the extent that I published your comments under a pseudonym.

At the close of that debate -in 2008, prior to your 2008 post (mine was in April, yours was Oct 1), let me remind you what you said in comments:

This week I hosted a Fashion Incubator DE from the Seattle area at my facility on the east coast. And last week I offered the assistance of my design team to help another Fashion Incubator DE at the Material World show in Miami.

These two interactions with emerging entrepreneurs made me aware of the knowledge I acquired in my start-up years by producing in the USA. I developed my “tool kit” and only then was I confident enough to venture offshore. I finally saw how overwhelming the process was for new DEs in the start-up phase. Kathleen was very intuitive when she said:

“a part of me suspects that he minimizes the benefits of having gone through the rigors of learning product development domestically.”

These past weeks I realized how much I minimized the lessons I learned 15 years ago. This was a very courageous post and I commend Kathleen for her tack and honesty.

Returning to your comment today, you said:

Pretty please caution your readers on the overheads associated with owning a factory either on shore or off shore. Overheads remain week in and week out…sewing is seasonal…two big humps a year.

If there are any DEs who envision outfitting a full bore factory at the outset, I’m not aware of them. We discuss the complexities of setting up endlessly (especially on the forum). No one, least of all me suggests it is easy. Nothing worthwhile is. I still say that today’s conditions of market responsiveness is forcing people’s hands in as yet unrealized ways. Nobody needs to open a big plant but it is amazing how much product one or two stitchers can put out. I urge people to consider the option. Everyone else is saying what you do, I’m saying that is not the only option.

Put it this way. There is overhead regardless of who owns the factory. If one is hiring a contractor, you’re still paying that overhead only now the costs include a markup on it. Most people are batching their output in quantities in advance of orders and much of those goods do not have demonstrated demand so what doesn’t get sold is disposed of in the off price market. Do that too many times and the DE goes broke. I’m saying there is potentially lower cost in cutting and sewing to order in a small shop if you consider the potential of doing so and work your way into it little by little (see those links I left in this entry). Sure you have overhead but this is offset by not having to buy fabric, cut it and sew it for orders you don’t have -and that’s assuming you can find a contractor who can deliver your product when needed and as you specify.

The fact is this: large respected brands are trying to reshore production. They are doing it for a reason.

Miracle
August 2nd, 2011
10:47 AM

There’s a part of me that’s intrigued by the concept of producing in-house. It always seems like the way to go when you’re looking for flexibility and the ability to adapt quickly to market. However, there needs to be a great deal of context. The context that both parties are lacking is quantifying the size of these companies in terms of both revenue and production capacity.

I can tell that this is not an apples to apples conversation, but that’s only knowing the background of Kathleen and Alan. It needs to be explicitly stated that Alan is a manufacturer operating on a revenue and output scale that most DEs will not achieve (and may not aspire to). So when a DE is looking at producing in-house it must be decided, up front, what kind of company they plan to scale to become.

Having said that, I have no context for sewing in-house but I do give my analogy to fulfilling orders yourself. When you are small, and fulfilling in-house, there can be a subconscious tendency to self-sabotage to avoid spikes in sales that would require staffing that a small operation cannot handle. Thus the joint venture opportunity not taken, the large retailer client turned away, the trade show not exhibited at. Because there is this “hump” that occurs where it may only take (just making up numbers here) 5-6 people to sustain a certain revenue or production level but increasing that by only 50% requires twice as much staff and a helluva lot more money (equipment, software, space, etc).

Yes, this can happen and often is the case.

So what you find is that the owner knows that and subconsciously makes decisions that keeps the growth at a “manageable” level.

My point is that in theory, I like the idea, but in reality I’m not sure it’s that feasible for that many people. I also believe that it fundamentally changes the type of business one owns when they have a factory because they tend to focus more on production than on sales and marketing, which is fine when there’s growth but hurts like hell once it slows down.

I don’t know what the solution is and I don’t have the practical experience to pretend to know. I do know that there must be other options than contractors and in-house. Maybe there’s a hybrid model that can work, or like with the auto industry, companies can partner to share production lines. Who knows.

There is overhead regardless of who owns the factory. If one is hiring a contractor, you’re still paying that overhead only now the costs include a markup on it.

Yes, but with a contractor you only pay the proportional share of overhead, not the full burden. Payroll is a (insert curse word here) not to mention the add on employment related costs of unemployment, workers comp, taxes, blah blah. For the most part, that alone keeps small companies from hiring work they can outsource.

The fact is this: large respected brands are trying to reshore production. They are doing it for a reason.

Yes, but they still aren’t really setting up production shops because that’s not their core competency. I think that every company has to decide, or evolve, into core competencies and I wonder if sometimes taking on a difficult one (like in house production) comes at the expense of others.

theresa in tucson
August 2nd, 2011
2:07 PM

Are there large brands partnering with others who CMT? This morning’s paper had an article on new home builders partnering with growing renovation/remodeling firms. The remodeling firm is able to add staff and expertise through the partnership and the home builder can retain valuable employees and keep the doors open.

Bess
August 3rd, 2011
5:27 PM

I find this fascinating and quite surprising. I have no intentions of changing careers, but of course I’ve taken stock of what other marketable skills I have, should I lose my job and end up unable to find work in line with my education. I’m a competent, if untrained, technical seamstress, and would undoubtedly end up a much better seamstress if I obtained training. And I enjoy sewing, although I probably wouldn’t enjoy it nearly as much if it were my full-time job. But I’ve always assumed that competent seamstresses are a dime a dozen in the US, and even if I did obtain training I would be lucky to find work at all, and if I did find work, would be lucky to earn enough to put food on the table. I’m quite surprised to find that seamstresses aren’t a dime a dozen in the US. I am disturbed that it appears to be difficult to find the requisite training should I need it, however.

alan
August 3rd, 2011
7:52 PM

“If you’re being facetious, you’ve long criticized me for my position. I understand why but this isn’t an either or proposition. You must do what works for you. But more importantly, it is very unfair that you put me in this position because you and I debated this publicly before.”

Kathleen, First I preview almost all your posts in my reader, and commend you for the invaluable advise you give FREE OF CHARGE. Hey everybody, you couldn’t buy Kathleen’s advise for anything less than a few hundred dollars an hour!!! If you’ve ever tried to put out a well researched and useful blog post, it takes at least a few hours. So I look at each one of these posts as worth at least a $1,000 of FREE advice.

Kathleen, it’s been a long time since I commented on a post, but in your heart you must know I respect your advice and opinions deeply. So my comment was serious and not facetious.
Vaguely, I remember our commentary:

These two interactions with emerging entrepreneurs made me aware of the knowledge I acquired in my start-up years by producing in the USA. I developed my “tool kit” and only then was I confident enough to venture offshore. I finally saw how overwhelming the process was for new DEs in the start-up phase. Kathleen was very intuitive when she said:

“a part of me suspects that he minimizes the benefits of having gone through the rigors of learning product development domestically.”

My pretty please comment should have been, “please caution your readers that the cost of a “tool kit” is about as expensive as a college education.”

BUT, overhead costs of owning a factory are a real nightmare, especially in the start up phase of never ending production and quality problems. Once you get a factory running smoothly, you’ll end up with a massive competitive advantage. My experience is both domestic and off shore.

As I’ve aged I’ve lost my edge to intellectually debate an intellectual. I’d prefer a nice dinner out with a colleague and her significant other! I’ll be in Seattle, Vegas and Iowa over the next few weeks, just let me know if one works for you.

Best,
Alan

Laura
August 5th, 2011
6:36 AM

Mmmm! Meaty! I like all this discussion because you really bring so much out that needs thought and planning before jumping into a business. One problem I had when I had a business making drapes and window treatments, I had a retired person (family member) who wanted to work for me under the table. I refused. I knew I could get away with it, but having been a victim of an ex-husband who worked under the table to avoid paying child-support (he never paid it), I could not with good conscience, do what I knew was illegal. I offered to pay her the top salary she could make legally and to do everything possible to build up some benefits for her, but she just wanted a regular paycheck with no taxes and no records.

Susan
November 19th, 2011
11:48 AM

Hi Kathleen,
Thank you for the information!! I am wanting to start a production line here in the USA!!! I live in NC and the county I live in people want to learn to sew. They also would love to have a job. I feel it is important to bring jobs back to the USA. The problem I am facing is, I lost my jobs 21/2 years ago, so my credit went down because like everyone else I couldn’t pay credit cards because of the high interest rates and extra charges. So, that being said, I can’t get anyone to lend money for the startup. I do have a small business in my home, but I am growing and I would like to get a place to have workers for me. Again, no one will help. I have always been credit worthy until the economy hit. I did not file bankruptcy. I couldn’t afford to file bankruptcy because the lawyers all wanted at least 1800.00!! I would still like to pay my bills and I feel I can when I get back on my feet. With all of this being said, I would still like to work on getting a business going. Please let me know what my options are. I am trying to put whatever I make back into the business. I don’t know of another way to do it right now.
Thanks!

Erin
December 30th, 2011
12:59 PM

I’m really intrigued by this idea. I keep thinking about running a DE co-op: get a bunch of people together to buy the right equipment and pay a PT manager/coordinator, and everyone puts in hours (and gets training) sewing small runs for each other. A real co-op: you don’t sew, you don’t get your own stuff sewn.

I’m sure there are eighty-kajillion reasons why this wouldn’t work, but in a place like the Bay Area I bet it would work if it could be made to work anywhere.

Kathleen, do you know BetaBrands? They make a lot of their stuff in SF, which means they can do short runs of unusual designs for their biggest fans. I think their model is a great one: unique products, heavy use of social media and lots of loyal fans, local manufacturing and short turn-arounds.

Million
February 24th, 2012
2:07 PM

As a Canadian, I am thrilled by the idea that boosting our domestic manufacturing sector is becoming a realistic solution to the requirement for our national economy to transition from being heavily resource-based (ex. bitumen, non-renewable forest products, water, etc) to providing other options for employment and generating vitality in the economy. Traditionally the argument against relying heavily on resource exports has been directly opposed by consideration of the impact that industries such as forestry have on other industries such as tourism. It’s a classic debate, and although that point still holds weight, such as to provide protection to wilderness areas which include sufficient habitat to preserve natural ecosystems, I am opening the discussion for other industries such as fashion to receive consideration for strongly bolstering both the export and domestic markets.

Another point to consider which immediately comes to mind is that as shipping costs rise, and travel gradually becomes less prevalent, moving toward other solutions such as manufacturing and ecologically conscious technologies really strikes me as being genuinely viable. We have a lot of talent here and I think society and culture as a whole benefit from a workforce which is encouraged to develop their intelligence and creative capacities.

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