What NYC Entrepreneurs Want to Know About Sourcing

Last year we launched our online Academy.  This month, we expanded our educational series to in-person events. The first course was led by Liz, an industry veteran, and she provided insight on how to find the right factory. The session was designed for beginners and those looking to learn more about sourcing and the benefits of sourcing with American factories.

If you want the full syllabus, you can get it emailed to your inbox when you sign up for a plan with code LEARN2SOURCE.

sourcing 101

There were a lot of helpful tips, like how to screen a factory partner, keywords to use, best practices and more! Here is a snippet:

Best Practices for Working with a Factory Partner:

  • Be respectful
    • Maintain a strong relationship with your manufacturer
    • By treating factories with the respect that they deserve, they will be more receptive and interested in working with you
  • Communication and Organization
    • When reaching out to several factories, keep track of who you contact and set calendar reminders to remind yourself to follow up with each factory that you contact. Factories receive tons of inquiries, therefore it is important to follow up multiple times and stay on top of your conversations.
    • If you don’t hear back within a couple of days, follow-up 3 times.

Top Questions

With 80 business owners in midtown Manhattan, the Q&A part of our event got intense! Here are the top questions asked during the session:

Establishing Factory Relationship

When going to meet with a new factory, I bring my own patterns but they want to use their own.  Is that something I will encounter anywhere?

  • Yea. What I see people do, is they will digitize their patterns and send them as files. I do see that a lot.  Thankfully they are not super expensive, but depending on the garment, it could add up.
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What about NDAs?

  • I’m not a lawyer.  That’s my disclaimer. You can definitely ask factories to sign them for you, some will. Almost all development partners will sign NDAs. Some don’t want to because they hear a lot of product ideas, and they don’t want to be liable should two be similar. At that point, it’s your decision to make.
  • There is a way to get around this if you are feeling anxious about it: use a sample of a similar product and link to it. You can get pretty far along in the assessment process by using a ‘dummy product’ or something similar to yours if you don’t want to enter into an agreement with them right away.

Where do you find a technical designer?

  • On Maker’s Row if you search “technical designer” or “industrial designer”

Details in Production

Does a production partner have a technical designer or seamstress on hand that is going to help you hash out the other sizes?

  • Yes, so that’s called grading.  They would just help you grade the pattern.  But if you are really particular about the fit, then that’s where I would say it really depends. You want to be sure they got it right. But most do.

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Some factories will actually require you to produce a sample with them first, as opposed to bringing your own before you proceed.  Are there any points of negotiations you recommend making as far as the sample production goes? Is there anything you should make sure you are negotiating about the sample making?

  • Yes, usually factories producing the production runs want to make your sample. But that doesn’t mean they need to do the product development also.
  • I would always have the factory you’re working with make a sample. I also wouldn’t put money down on an order until I see them make a top of production sample. Even if you’ve seen other samples of their work. You want to see how they will make your specific item.
  • Re: rounds of revision. They should give you the cost of the one sample, then everything else should be spelled out: 2nd/3rd samples are billed at $X per hour.

Negotiation + Fees

Is it normal for production facilities to charge a consultation fee?

  • Some do, some don’t.  It’s about 50/50.  I think it can be very fair.   If you’re getting started there’s a lot of educating and guidance that’s happening on their part.

Do you have any tips for negotiating minimums?

  • The most obvious: ask for a lower minimum. You can always ask if they will go down.
  • Ask if they are willing to go in at a lower minimum and pay a higher price (you don’t want to offer the price, let them come back to you). Ask them ‘if I’m willing to pay a higher price, will you lower the minimum and to what?’

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If you are agreeing to pay more up front would that hurt your negotiation?

  • When you’re quoting, ask for quotes in a few different quantity breaks.  If you know you want to make 100, ask for the prices on 50, 100, 200. Just so you know.
  • Another thing I see people do is charge a setup cost. Sometimes factories will have high minimums for the setup costs involved with getting a brand started. I don’t see it too often, but if you are willing to pay that fee, then they will go for a lower minimum.

What’s the typical cost for a technical designer?

  • $1500-$5000 per style, depends if you’re making something simple or more complicated
  • $30/hr-$250/hr 

Learn More

If you want to receive this article as a free e-course delivered to your inbox, sign up here. Plus, if you want individualized assistance with sourcing and production from industry experts, take a look at Maker’s Row Labs

Step Up Your Sourcing:

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