Deciding whether to produce your fashion product offshore or domestically goes beyond the reasons of cost and number of units you will need to produce.
As a matter of fact it's a decision that will impact how your business is set up and operates to best fit that scenario, re; what kind of people/services you should hire and even the details of your designs.
You see, the development and production process are quite different whether you produce locally or overseas.
Since the points of cost and lead time are points that are been discussed many times already (and I'm sure you know all about that by now), here are 6 other points that you should consider before you making the decision of where to produce your fashion product.
Sourcing and development - This is a major point to consider. When producing offshore you will get a full package price, all the components included re; Fabrics, trim labels, packaging etc. but more so all the sourcing is done by the factory (unless off course you choose to source them yourself). However, when producing domestically you will need to source all the components and coordinate between all the vendors by yourself which can take a lot of effort and time and be very overwhelming to handle especially if you are green to the industry. Also when you source all the components and pay for them yourself (as oppose to an offshore factory doing it and giving you a package price per unit that includes everything in already) it will be harder for you to get an accurate cost per unit. And more so no matter what, you will always be left with extra components.
Development process – When developing overseas you will need to provide the factory with detailed Tech pack therefore you will need to hire a technical designer who knows how to work with off shore. When developing domestically you don't necessarily need a TP (especially if you can work directly with the pattern maker), and in that scenario you will need to find a good pattern maker and sample room. Also domestically most times factories don't have development capacities re; pattern makers and samples makers and they only deal with production so you might need to find a separate sample room and then make sure that the development translates well and easy to production. When developing and producing overseas the same factory that will develop your pattern and samples will produce your bulk which should result in better consistency in quality. The complete development process is quite different due to the above so you will need to have the right people in place to handle it.
Communication – A clear communication will have a major impact on getting the best results from a factory. It starts with the language but it goes beyond that. For most factories overseas English is not the first language but since they have been working with companies around the world the people who handle the communication can communicate fairly well, not to mentioned that for many factory owners in the US English is not the first language. However, a big part of how successful the communication is has to do with the form of communication re: email, skype calls, face to face etc. When working with offshore factories most of your daily communication will be over email and many times verbal communication can be different from written text so keep that in mind. you will need to always read your emails at least once before sending and make sure that they can be clear to anyone even if English is not their first language so for example choose words and phrases that are simple and basic. One other matter to consider is the cultural differences. People in other parts of the world might be used to doing business differently than you, so make sure to be clear about expectations and responsibilities from the get go. For the most part these aspects are easier when developing domestically, although I personally had challenges with that in NY as well.
Legal matters – If you are concerned about legal matters such as your Intellectual Property or payment terms and delivery terms etc. than you want to make sure the scenario you choose will give you that security. Many times this is easier to control with a domestic factory especially one that you can easily visit at any time. I would speak to an attorney to see what are the ways that you can enforce any of these.
Scalability - As a small and new business you will need to have a view to the present and the future. You want to make sure that you can accommodate your production run when starting but know how will you scale up once your business is growing. The solutions can be both domestic and overseas so make sure you know what are your future options so you can plan for that in the present. In other words you don't want to find yourself needing to develop all your styles from scratch when moving from one solution to another.
Product category – Unfortunately the domestic market has its limitations as far as the products that can be produced here. Some categories and price points are just not doable to be produced domestically. Many times it's not just the cost but the lack of machinery, skills and available components that are the challenges you will be facing to produce domestically.
Regardless of what direction you choose to go, one thing I would highly recommend for you is to be very clear on how you choose to work with a factory. What are your expectations, your terms etc. and put it in writing in a document that you can share with them.
I would then make sure that it was read and agreed on by your factory before you start to work with them.
Want to hear more about the subject? Click here and listen to my interview with Jane Hamill of Fashion Brain Academy about the subject.
Not sure where to produce your product or just don't want to deal with that aspect of your business? Get in touch with us and learn how we can do it for you!
P.S. The above points are not meant to stir you in one way or another but just to give you a little more info to consider so you can make the best decision for your business.