4 Signs Your Manufacturer Is Up to No Good (And What to Do About It)

Transcript:

Hey, guys. I’m Syama Meagher, CEO of Scaling Retail. And today, we’re going to talk about signs that your manufacturer is up to no good. Interesting, right? We know we need manufacturers in order to get the product delivered, and yet sometimes we feel like maybe they don’t have our best interests at heart. So, before we talk about ways to know that they’re not doing a great job, let’s start talking a little bit about common things that manufacturers do that you might be interpreting as being a bad relationship. So, number one, manufacturers are always on deadlines, they always have their own schedules happening, and you’ve got to be really clear that, working with the manufacturer, they know that they are the ultimate key to you having your product. You’ve got to find out what their production windows are, etc. and know that they always kind of will run the shots in terms of product deliveries, when you’re going to get your things made, the sample-making process, etc.

Now, the second thing to keep in mind is that manufacturers are notoriously bad with communication. They are known in the industry for not sending emails on time, for not even having good, you know, communication styles over email. In fact, you might think that your manufacturer is yelling at you because he’s writing in all caps. But really, that’s just the way that he or she communicates. So when you think about these different nuances, know that manufacturers ultimately can be a little bit testy.

Now, other things that you might confuse with a bad relationship are, manufacturers offering to be able to do all your shipping for you. You might think that that’s a good deal, but ultimately, guys, you want to be able to kind of put forth your own ideas around shipping. Because chances are, you’re going to be able to get that for a much cheaper price than having your shippers include the cost in your order for them to send it. And your manufacturers are looking to make a profit, so they will also be able to quote you on a price that is almost always negotiable. So, keep in mind your first relationship with the manufacturer is not going to be your last relationship with any manufacturer and make sure you go into this with the understanding it’s a learning experience for you. But they’re running a business and you are extremely dependent unless you decide to go vertical and create your own manufacturing supply chain, you’re really responsible to that, right? You need to make sure you have a great symbiotic, empathetic relationship where they are in love with your product, they love working with you, and they’re going to be able to do you some more favors.

All right, so now, let’s talk about the ways in which manufacturers might be screwing you over. The first one is missed delivery windows. The second one is them not discussing and solidifying price points with you before they go ahead and do production. The third is when they don’t offer to rectify their mistakes. And guys, this happens all the time. The fourth is tons of excuses, and then we’re going to unpack exactly what to do about all of these different strategies. But remember, guys, this is going to be a tough one, so bear with me.

All right, guys, when your manufacturer starts ghosting you between delivery windows and you know that it’s time for them to start doing quality control, getting everything ready, packaging, etc. to get sent either to your DC or direct to the retailer, then you know there’s a huge problem. Your manufacturer should be really on top of communication with you.

The next, second, most important thing is if they do not discuss payment terms with you up front. They just say, “Hey, yeah, we’ll make your goods. Oh, you want to make this thing, amazing. We’ll make that for you.” And they don’t say, “Hey, we need X percentage of a down payment. We need X percent upon delivery,” and they start to talk about logistics with you. You need to make sure your manufacturer is really logistics-oriented because, of course, product is everything for you. So a manufacturer that is not clear on pricing, that’s not clear on logistics, is definitely something you want to watch out for.

Now, the next thing that’s important is to understand that, yes, everyone has health issues, things come up all the time, there are always emergencies. But when a manufacturer starts to tell you that they’re having all of these crises, and it seems to be happening all the time, you might want to say to yourself, is this just them making up an excuse? Now, I’m not saying don’t be empathetic when people go through issues, but certainly you have to ask yourself, is it really possible for this person to have one big problem one after the other? Now, oftentimes, that might be a sign that something is up and you definitely want to talk to the manufacturer, at least clear the air. If there is a health concern or a family crisis, you need to be able to find an alternative solution. So, instead of it being a thing that you have to really build into your business model, you can say, “Great, I’m going to do this production with this other factory until you’re able to get things together on your end.” And be sympathetic in that manner. But your production should not suffer because of these other external issues.

Now, when it comes to manufacturers making a mistake, this is a big one, right? Whether we’re talking about purse manufacturers, shoe manufacturers, apparel manufacturers or others. Manufacturers making a mistake means that they should always be rectifying that mistake. So if there should be something where the product bleeds, if they send you something that is defective, the manufacturer should make those adjustments on your behalf for free. You know your manufacturer’s up to no good when they charge you to do repeats of certain styles when they’ve actually made the mistake. Then you might be saying to yourself, “I just can’t believe that that would happen.” However, it happens more often than not, and it’s very important that you have an understanding in advance of starting production as to what happens if they make a mistake. After all, these are the guys who should be double checking your tech packs, they should be approving the samples with you, and you should see top of production, meaning you should know what the final product is going to look like before they complete the entire order and deliver it to you or to your ideal retail customer. So, guys, make sure that you know exactly what they’re up to and make sure that you have a really good idea of what that product looks like.

So, guys, the big question comes up is, what the hell are you going to do about all this stuff, right? Now, it’s really important, guys, that you make sure that you do a lot of sampling, always. You want to make sure that your manufacturers are not just the only people that you go to for production. If you are doing your job right, you’ve got a handful of manufacturers that you can go to whenever you need certain kinds of garments produced.

Now, what I find really fascinating is that there are so many manufacturers out there that say that they will do the sketching for you, they say they’ll do all the tech packs, they say they’ll also just produce for you, and you just tell them what you want. I get really concerned about those kinds of manufacturers unless you are with them every step of the way, and you actually know exactly what they’re doing, right? Meaning, what are the different steps that are happening here? This isn’t a black box, right? I give you my ideas and then all of a sudden you turn around a product. You want to make sure that they’re doing your assortment planning, that they’re asking you how much you want to sell the goods for, that if you’re really just starting off your line for the first time, they’re taking a more collaborative approach to making sure you’ve got the right product for you. And you don’t end up with a product that you have to retail at $1,200 because you never told them you wanted to sell it for $150 in the first place.

Then when you notice that someone is holding your goods hostage, and sometimes this happens more often than we’d like, it’s very important that you start to tread lightly around those relationships. Manufacturers that hold goods oftentimes do so because, either they are waiting for payment from you, maybe there’s been a hiccup in communication or maybe they actually haven’t finalized production because they’re having their own internal payments and financing issues. So, it’s very important that you tread lightly in those communications, but sometimes at the end of the day, you will have to take those manufacturers to court. If that does come to fruition, it’ll be very important that you have a good paper trail and then you actually have all of the different contracts and things that you have in place. Certainly, this is much easier to enforce if you do your manufacturing domestically than if you do your manufacturing overseas. Like in any business, when you do business overseas, it might become much harder to enforce contracts and things like that. But if you do have your domestic production, it makes it so much easier to manage those relationships that are possibly going awry.

Get more on this topic in our most recent blog post on starting up a fashion label, how to choose the right manufacturers for you, and make sure that you guys click on our download which is a 21-point checklist on how to launch your brand effectively. Trust me, that checklist has been a lifesaver for so many brands out there that we’ve worked with. And when you’re done checking out these resources, make sure you shoot us an email at hello@scalingretail.com. We work with tons of fashion businesses both starting up, scaling up and enterprise businesses across sales, marketing, and merchandising. Leave a comment below. Please subscribe and head on over to our Instagram channel to stay engaged. Talk to you soon. Bye.

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