The Fashion Industry – Tips For Outsourcing Manufacturing And Paying Affiliates

Many of us as consumers are fully aware that the majority of our wardrobe, although purchased in the UK, was not manufactured in the UK. Fashion guidelines couldn’t make it more obvious to us. Just look at the lovely white labels sewn into our clothing or handbags with the ‘Made In China’ or ‘India.’ stamped upon them. The thing is, with the current economy and the love for fast fashion, we as shoppers have helped to push the trend of outsourcing to eastern countries because of our want, our need, our desire to shop at lower prices. We all feel like we need to justify the money we spend now; do I really need those shoes? Yeah my jeans are ripped but isn’t that the fashion? Okay I’ll just lose weight and squeeze back into my old clothes. UK shoppers (among other countries) are guilty of needing a bargain.

We are a country of discount shoppers. The likes of Primark, TK Maxx and Sports Direct were not always seen as acceptable or ‘cool’ places to shop because of what was affiliated with the brand eg: Cheap, poor. It said a lot about your status if you were the kid in hi-tec trainers or the family who shops in £1 shops, especially in a country that is very keen to establish and differentiate status. But, because of the change of the climate, how quickly trends on the high street are changing, and because consumers are challenging the demands of fast, low-cost fashion, fashion houses in the UK have turned to (predominantly) Bangladesh for the manufacturing of our apparel.

However, just because we aren’t running the factories in Bangladesh that have recently resulted in deaths, does not mean that we are not somewhat responsible for them. We all know that factory conditions outside of the UK are very different and most of our population wouldn’t last a day in the same environment. So really, the time of turning a blind eye to these labour intensive conditions should come to an end.

There are a few different tactics that fashion brands can take on board though to help maintain good ethical manufacturing as well as saving themselves from being skinned by bad press or even taken advantage of by some of these eastern factories

Factory audits- If you are a wholesaler within the fashion industry then you will know that dealing with the big players on the high street such as Next, JD Williams (Simple Be), John Lewis or M&S to name but a few, will require you to dig into that margin of yours (before you’ve even made any with them), to pay out for factory audits. This is when the high street suppliers will use a reputable auditing company they are familiar with who are up to date on the legal requirements and conditions for the countries your factories are located in. The auditors will check the machinery being used and the hours being logged by the members of staff on the workshop floor to check that all legal requirements are being met and there is no child labour or exploitation occurring.

As a fashion brand, instead of waiting for the retailer to enforce you to do this as part of your contract with them, you should start doing this from the outset before you even source any samples from the factories you are looking to deal with. Sooner or later, every store you want to supply to is going to request the last audit of your factory supplier.

Take responsibility when mistakes happen & communicate with your suppliers-
Although you may invest in factory audits, this will only be one week that the factory is under supervision. Building a strong relationship with the factories you are working with and where possible flying out to visit them, is another way to try to prevent the factory possibly outsourcing your manufacturing to another third-party without your knowledge. This is something that was covered by Channel 4’s ‘Dispatches’ around two years ago.

Many eastern factories were outsourcing fashion houses such as ‘New Look’s’ orders to third-party manufacturers in order to produce the volume of orders but also manufacture them at the cost price quoted so the factory themselves, were not at a loss. The third parties weren’t necessarily even factories but more like sweat shops. If a supplier knows that you are likely to make regular visits, or have an employee based out near their factory for a lengthy period of time, they are less likely to jeopardise outsourcing your goods.

Or, like recent high street retailers have done recently, you can contribute to their supplying factories when disaster strikes, such as the building collapse or factory fires that have occurred over the past month in Bangladesh. A small contribution can go a long way.

If you are unable to make factory visits; protect your money-If your brand is not yet at a position to allow you the cost of flying over to China, India or Bangladesh then you know that the only communication you are likely to have with your chosen factory, is via e-mail and possibly telephone calls. You also know that your research process was really done over the internet. This means you don’t really know for sure, who is supplying to you.

It’s very easy to create a website with the variety of free platforms that are available now. So be careful not to be conned by fake phishing sites or just naughty frauds. The thing that you will learn in the manufacturing industry when dealing with these eastern countries, is that they don’t ship without payment. If you don’t pay them, they hold your goods (and most likely ring you round the clock because the factory manager’s staff will be doing the same to them asking when they will be paid). Protect your finances and set up a separate online bank account or eWallet for paying affiliates with so that you are not transferring directly from your business bank account.

This way you prevent your business account from being hacked into but it also helps to assist with the management of your cash flow, as you only transfer into your eWallet what you need to pay out eg: the balance on your invoice from your supplier. eWallets still have the ability to transfer money in a variety of currencies so you don’t need to worry about converting the money you want to transfer.

If it is too good to be true; it probably is- If the cost price seems incredible eg: A PU bag covered in metal skull hardware that can retail for £12 giving you a 2.5 margin (giving a cost price of £4.80) then you know it is unlikely that the metal on the bag will have been tested for its nickel content, or it might arrive smelling rather fishy! (Pungent odour common with formaldehyde which is often used as a finishing product on leather looking handbags).Be realistic. If a bag’s entire front panel is covered in hardware with either chains or other hardware features, it should really be retailing at £65 plus minimum.

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