Today we’re going to talk about one of the biggest reasons designers fail to scale: branding. In case you’re not familiar with the term “to scale,” it’s taken from geometry and means to rank things from lowest to highest. Applied to manufacturing, it means to take a product from a sample (one item) to mass production. We’ve noticed that the main reason designers fail to scale is because they hesitate to invest in professional labeling and packaging to establish a brand by buying mill minimums. In general, it costs $1,000-$3,000 for a manufacturer or industrial designer to take a concept or a prototype sample and turn it into a real retail product sold in stores at scale. This article will explain why the cost seems high, what you get for it, and why it’s important to make the investment. At the end, we’ll provide resources so you can learn more.
Getting Started Is Cheap
It’s difficult for many people to understand that a shirt that costs a few dollars each to make may cost several thousand dollars to design if you want all the parts for a working model. This can create sticker shock for people just getting into the business.
I’ve had designers tell me they bugged friends or family into making a prototype sample for them for under $100. Yes, you can do that for your first sample prototype. No, you cannot legally sell unbranded samples in retail. Five yards of fabric and a pattern are not going to cut it unless you plan to just sell to your mom.
You may have a good idea, but you’re going to have to purchase bulk supplies from mills in order to get into retail stores. This starts with the first sample made for actual production in a factory, which is called a pre-production sample (PPS).
There are several stages you’ll go through. First, you start with a prototype, 1st, or salesman sample depending on the lingo people use. Next you clean it up for manufacturing. This is generally a 3-4 sample process to polish, cost, and find materials for manufacturing. The final step is the actual order (production), and a minimum run can be from 1,000 to 10,000 pieces. Shops can often accept smaller run sizes which we will talk about next week for smart manufacturing tricks designers use. For now let’s focus on mill sourcing.
Here’s how it works.
Going from a Prototype to a Pre-Production Sample
After you’ve made your sample and maybe shown it at a tradeshow, your next step is to invest in making a pre-production sample (PPS). It’s not unusual to spend $600-$2,000 coming up with all the trim parts initially for a new product, even though the item itself may only require an industrial pattern costing $100-$300 and $50-$200 of sewing.
Why is it so expensive? You will need 20-30 basic items that go into retail garments, such as care and content labels, packaging, hangtags, thread, buttons, and zippers. Even though you need only one of each item for your PPS, you generally have to buy the minimum mill purchase amount in the US.
For example, while you can buy individual zippers or zipper tape in a fabric store for one-off samples or short theater runs, if you plan to go into production, the minimum custom zipper order most mills will take is 100 or 300. For other trims, a mill may prefer orders of 1,000 or 10,000 because these are common trim quantities. For example, it costs me roughly $130 to have 100 printed brand labels and $160 to have 1,000 custom-woven brand labels made.
In summary, you must generally expect to purchase 100-1,000 of EACH trim item before a product development department can make even one physical sample.
Why Do Factories Do This?
Factories want to limit risk. No shopper wants to throw away an entire shirt because the buttons rusted or the elastic fell apart in the wash. The industry is littered with such horror stories. Therefore, mills control quality by making sure you buy standard products, and they’re only sold in bulk.
You may work with a jobber, who is a middleman sales agent. This person goes between mills, factories, designers, and retailers. They’re sometimes called (sales) agents and make 3%-8% commission on sales, if they have a deal worked out with various mills they rep. They typically sell smaller fabric and trim amounts than are normally available directly from mills. Jobbers are generally considered less reliable and more expensive than mills because you are not buying directly from the producer. Some exceptions are jobbers who are retired factory plant managers who provide material sourcing for new designers.
Why You Need to Start with High Quality
Professional packaging costs money, and it is critical for a designer to invest in quality items when building a brand. Buyers determine apparel price-points based on your quality. If a buyer trusts you enough to buy from you, it is critical that you, as a designer, establish yourself as someone who pays attention to quality.
It’s a good lesson to learn now because down the road, if your quality is poor, a retailer can charge you money for returned items which don’t hold up. This is called a chargeback. In fact, a style that has more than 5% returns is traditionally considered unprofitable. As a matter of protection, many retailers will issue chargebacks on goods that fail this bar. This is how retailers control the factories and designers they work with, to make sure they adhere to reliable standards.
What Happens to the Leftovers?
Buying factory minimums to create a PPS creates a lot of leftovers. Designers often liquidate to jobbers, throw out the extras, or use them in an actual style run that averages 100-300 pieces. Some factories will credit your design costs towards the production run. This is where the discount on style runs of 250-300 pieces from some shops comes from as a price quote. As we try to run a zero-waste shop, we set it up like that so that all you need is more fabric when you decide to scale. Once a year we donate unclaimed goods in January to Raleigh Little Theater, a non-profit community theater in our area we’ve supported for years.
One of the most enlightening conversations I had doing patternmaking was with an experienced sourcing manager, Beth. She informed me that a simple color change I wanted to make would end up costing the factory $600-$700 in thread for the factory sample. The fabric we were using required a special thread I wasn’t aware of, and we had to buy different thread for several different machines we were using. I wish I could say this was a one-time conversation. It wasn’t. Thank you, Beth. We did however later roll that thread into the overall production cost once we got the client order. Although $600-$700 worth of thread seems like a lot compared to spending $35 at your local fabric store, measured against a larger order of say $60,000-$100,000 of goods, it becomes pretty reasonable.
This is a common problem new designers struggle with—that you need to pay for trims up front—but if you’re smart, you can get it back later in production. If you’re just starting out, spend the couple hundred dollars to get good package sourcing and your wallet will thank you down the road.
If You Want to Learn More
Poor branding is the breakpoint for most designers who want to make more than $50,000-$250,000/year. It’s also why new designers don’t make it past their first few seasons. If you’re interested in learning more about sourcing theory, the Carolina Sourcing District offers a two-day weekend workshop for people who are just getting started in the industry. The cost is $500, and the workshop will give you a better idea of what it costs to scale. Or you can order a used copy of Apparel Manufacturing: Sewn Product Analysis by Grace Kunz and Ruth Glock, generally for under $20 on Amazon. You can also check out Chris Do and Jose Caballer with the Futur on youtube, as they produce excellent talks on other aspects of brand building, such as website building, logos, and brand identity. Designers still need to pay for sourcing, but at least you’ll have a better understanding of where the money for product development is going and how to save yourself heartache on cut and sew manufacturing later.