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Summary of Episode 02:

In this episode of Fashion Forward Podcast, hosts Richard Gregory and Skye Della Santa discuss apparel sourcing and many of the considerations when sourcing apparel manufacturing overseas, including:

• Apparel Sourcing Around the World
• Ethical Sourcing in Fashion
• Sourcing in Indonesia
• Sourcing Apparel Manufacturers for Our Clients

Full Transcript of Episode 02: Fashion and Apparel Sourcing

Introduction

Fashion Forward Podcast – Episode 002

Richard Gregory: Hi there I’m Richard Gregory, founder and CEO of Prototype and host of fashion forward. A new podcast dedicated to helping small fashion businesses succeed in the cut-throat fashion industry. Give us just a few minutes a week and we’ll give you real information and actionable advice that’s guaranteed to get you motivated and moving forward with your brand.

Skye Della Santa: Hi guys. I’m Skye Della Santa, co-host of the show and COO here at Prototype. I’m so excited to be here with y’all today. This week, we’re going to talk about apparel sourcing. The things that we’re going to discuss this week is apparel sourcing around the world. We’re going to go into ethical sourcing. We will touch base on sourcing within Indonesia and internationally. And lastly sourcing for our clients. 

1) Apparel Sourcing Around the World

Richard Gregory: All right. So let’s jump right in. The first topic we’ll discuss today is apparel sourcing around the world. So let’s talk about why is it that a brand would want to manufacture overseas? What is it that motivates a company to be looking overseas?

Skye Della Santa: I think it depends on where is overseas for you. But what we find is a lot of our clients are coming from Australia, Europe, America. So for them an initial point of why they are sourcing manufacturing overseas is related to cost. You know, the cost of manufacturing in America is going to be much, much higher than manufacturing in say Southeast Asia, for example. Um, So we find that, you know, the cost is really one point that does drive these clients to look outside their home country.

Richard Gregory: That’s definitely the most common reason that someone looks overseas. That’s traditionally been the case anyway. Right? Going way back in the day, China was originally developed as a manufacturing alternative for Americans because the costs of doing things in China was obviously much cheaper.

China was an underdeveloped country at the time and wages were super low. So American companies started going in there and training companies in China, how to make things. And teaching them all the kinds of workplace practices that American companies had. And that created a situation where eventually over time, China became so sophisticated in their manufacturing capabilities that they absolutely outshined the master.

You know, they outgrew America and as a result, prices have risen in China. Wages have risen in China. And overall China is actually now it’s, it’s somewhat of a premium place to manufacture. And now Chinese companies are doing the same thing that American companies did back in the day. Chinese companies are outsourcing to Cambodia and Laos, Vietnam countries like that, where labor is much cheaper and where a lot of the environmental and other types of restrictions aren’t in place like they are now in China.

 Some of the new hotspots for manufacturing, if you look on the back of your t-shirt, you might very well see Cambodia, for example, listed. A lot of fast fashion is made in Cambodia now, and you might not think about it too much, but why is that exactly? Is it because it’s cheap? Is it because, you know, Cambodia has like a, a growing you know, business sector or alternately, could it be that Chinese companies are actually going in there building huge factories, hiring vast numbers of workers, putting them to work in those factories in exactly the same way that things used to be in China. And there again using the low-paid workers to keep the prices down on fashion goods.

Skye Della Santa: Yeah. So what we could be saying is the emerging of all these new countries going through the same process that China did many years ago. So, you know, China’s now going in doing what America and the Western countries did of teaching them the practices that they use and then building their manufacturing side up.

Richard Gregory: For sure. Like Thailand, for example, I never, I haven’t really been to Thailand. And I hadn’t really realized that Thailand is now, like, it’s almost like Japan was in the nineties or something where, where it’s this super-premium…

Skye Della Santa: Technologically advanced. 

Richard Gregory: Yeah. It’s like, I didn’t realize that. But what we’re told is that garment manufacturing just almost doesn’t exist in Thailand anymore because the cost of manufacturing in Thailand is just astronomical now compared with some of the neighboring countries. So it’s interesting how these different forces move throughout the world and kind of change the landscape of manufacturing. 

Skye Della Santa: Yeah, That’s it. 

Richard Gregory: Now you’re starting to see products with origin labels all over the world. Now there’s different reasons why a brand would be interested in manufacturing in different places other than just cost. 

Skye Della Santa: That’s it. What we’re finding is that different countries have different specialties. You know, we found that, for example, our clients that are looking for really amazing, really high quality fabrics, they’re turning to countries like South Korea who you know, growing so fast and the level of quality of fabrics, and also the options of what’s available is just growing so much that they are becoming one of the larger exporters of fabric throughout the world.

Richard Gregory: And there’s other countries like Cambodia, for example, and Vietnam, Pakistan, Bangladesh, those countries have, they’ve always had a certain amount of manufacturing industry, of course, but lately they’ve been appearing far more often on, on the labels of mainstream brands. You’re starting to see products with origin labels all over the world. There’s different reasons why a brand would be interested in manufacturing in different places other than just cost. 

Skye Della Santa: That’s it. 

2) Ethical Sourcing in Fashion

Richard Gregory: Okay. So moving on, let’s talk about ethical sourcing. What does ethical sourcing actually mean? What is an ethical factory? 

Skye Della Santa: At Prototype, we work with a lot of factories throughout the world, throughout Southeast Asia and internationally. And ethical manufacturing is something that is a very big standpoint for us when we are meeting new factories. When we’re sourcing new factories it’s something that is first and foremost. We have a very strict structure, the, you know almost a tick list of who are we going to work with and, and are they up to our ethical standards? For us, what we, we would be looking for is the working conditions. Who’s working there? And what are the conditions like? Are they getting paid the, the right salary? Are they working standard hours? Is it a comfortable and safe working environment and are all the people over the age of they should be working? This is something that is so important to us. And, you know, first and foremost, it’s always going to be the very first thing we check.

Richard Gregory: Yeah. I think ethical sourcing is a lot about… It’s really common sense. It’s if you walk into a factory and you can see that the floors are clean and the walls are clean, they have a clean bathroom. The lights are on the it’s bright enough so that, you know, the workers aren’t straining to see what they’re doing.

That’s really a sign of an ethical factory. They may be in it for different reasons. It might not be strictly. They’re trying to be ethical. It could be because they’re just being efficient. They’re just being realistic about the kind of conditions that workers need to do their best work. But when we look at a factory, we’re looking at it in a, in a general sense.

We’re not looking at what certifications it has, you know, does it check off the, you know, ISO 9,001 or whatever It doesn’t… none of those things really matter compared with actually going to the factory and …

Skye Della Santa: meeting the people.

Richard Gregory: Yeah! Like, are they happy? Are they smiling? Are they, are they glad to see you? Are they, are they allowed to talk to you for a minute while they’re working?

Skye Della Santa: Yeah, that’s it. For us, we find that the certifications are great, but not all factories can get certified. Certifying is something that you have to pay for. And when we’re working with smaller factories, they don’t have the money to be certified with big international standard boards. 

Richard Gregory: Yeah, yeah. Yeah.

Like it’s just, logically, if you think about it, a factory that has, let’s say 50 workers that’s located in a small town, what we would consider like buying local shop local we’re we’re well used to thinking of small businesses as being generally more ethical, more of a sustainable way of doing business, but yet those, those small factories, they don’t have access to the kind of money and certifications that these companies do that have like 50,000 workers. So if you’re looking at certifications…

Skye Della Santa: Not always the answer. 

Richard Gregory: Absolutely. 

Skye Della Santa: Yeah. So for us, it is always the case of going there, meeting them, having a chat to them, seeing, seeing what the conditions are like with our own eyes and speaking to the employees. That’s, that’s a big part for us.

Richard Gregory: That’s one of the big reasons why we manufacture in various different countries is because different countries have different strengths and weaknesses. Some countries are very, very, very detailed when it comes to their standard, their ethical standards, their pay scale and all that stuff like America.

You can’t, you’re not going to find a sweat shop in America anymore. 

Skye Della Santa: No, not at all. 

Richard Gregory: I’m sure. In, in most kind of top tier, you know, type countries. However, that doesn’t mean that they’re any more ethical really. What about the guy in Indonesia, who’s working with his family to make handmade leather shoes. He’s working at home, they all stop for lunch. Maybe they have a nap. Yeah, they’re not being paid the same pay scale as that worker in America. But if you’re going to really look at it from a holistic point of view, you can’t make the argument that American workers are any better treated than a worker in another country like Indonesia.

Skye Della Santa: No, not at all. 

Richard Gregory: Some countries, however, definitely have poor records. Some countries have a predatory business practices. In general, a big company coming into Cambodia and opening a factory is not going to be subject to the same level of scrutiny that a factory would… 

Skye Della Santa: In America, yeah. And that, that is one thing to say that when you are working with factories in not as established areas, that is something that you really need to be aware of because they don’t have the same government standards. There is no one checking on the facility.

 So I think it’s a really big, really important factor that when you are working with a company that, that they’re the ones that are ensuring that the factories are going to be to standard. 

Richard Gregory: Exactly. You might go to a country, a small and poor country. And feel like you’re doing good by giving, by giving work to those people, to by, you know, hiring a factory in that country to do your production.

And that makes perfect sense, but it only makes sense if you’re actually following through and checking and ensuring that that’s really the case. If you’re going to a small town and you’re finding a small, independent business and you work it out directly with them. And everything looks good and you’ve seen it with your own eyes then great! That is the best possible scenario. But if you’re just going to Alibaba and you want to buy t-shirts from Laos and you think, oh, Laos, I went to Laos once I love Laos! I want, you know, Laotian people to make my, make my t-shirt. Well, that could be, you could be helping the situation or you could be hurting someone. It just really depends on the exact scenario that’s happening behind the scenes, 

Skye Della Santa: That’s it. Who is the factory and what are the conditions like? It’s such an important thing . We get so many people asking.

I think one of the things that I’ve really noticed over the past few years is people are becoming more aware of this. They’re not just sourcing factories or sourcing countries on price. It is really something that, that people are starting to come more attuned to and they are, they are happy to pay a little bit more if they know that it is a really amazing factory that is giving back to the country and giving back to their workers.

3) Apparel Sourcing in Indonesia

Richard Gregory: Yeah, that’s true. And that’s why we are here in Indonesia. 

We started this business in Indonesia because we wanted to get close to the source. We weren’t interested in relocating to China and working with China, our own values personal values and our, some of our company values don’t align best with China. They do align very well with Indonesia. 

So what are some of your favorite things about Indonesia?

Skye Della Santa: For me, one of my favorite things about working within Indonesia is I just find that Indonesian culture has really good, really strong values.

And that really does translate to how they treat their staff, how, how they work. It’s, it’s something that really resonates with me, of who I want to work with. 

Richard Gregory: Yeah. We get a lot of clients who will ask us to tell them about the working conditions here. And they want, of course, they want assurance about, you know, whether or not we’re running a sweatshop or whether we work with sweatshops.

And when you’re here in Indonesia, that’s a really funny question. Because, first of all, every shop is a sweatshop because it’s always hot. And most, many, many, many Indonesians don’t like to work with air conditioning because they believe that it gives them a cold, they catch a cold 

Skye Della Santa: Masuk angin…

Richard Gregory: Yeah. And it’s true. I mean, after a couple of years living here, I got real sensitive about the air conditioner and I don’t like to have it on all the time. I feel like if I sit in front of the air con, I’m definitely getting a cold. The other thing that I think is funny about it is that Indonesians will not take any shit from you.

 If you try to make an Indonesian work overtime without pay, if you try to do something unfair and pull some kind of shenanigans and tell them like, oh, I’m gonna fire you if you don’t work 12 hours today, they’re just going to be like, bye. I don’t need this job. And they don’t, they’ll just go home. And hang out and have a good dinner. And they’ll forget about you in a heartbeat. I feel like we have to work hard to keep staff here. We have to, we have to work for them. You know, like we have to work hard to retain our staff. We can’t be demanding.

Skye Della Santa: No. And in saying that though, we, you know, we do get a lot of people. I’ll be on calls with clients. I might be on a call with a client from Europe. And they’ll ask the question, you know, where, where are you, where are you calling from? I’ll say, I’m calling from our factory in our design studio. And, and quite often I’ve gone. Let’s, you know, if it’s a video call, I’m like, let’s come for a walk with me and I’ll show them around the factory because it’s amazing.

It’s, it’s a great place to be. And, you know, with our factory alone, we’ve got a beautiful staff that, that are like family. 

Richard Gregory: Yeah. And when we go out into Indonesia, it’s not to say that there aren’t bad factories here. It’s not to say there aren’t sweatshops. I’m sure there are. We’ve been to so many, we’ve toured so many, so many factories here and there’s very few places I’ve ever seen that I found like, objectionable. Mostly, they’re great! 

Skye Della Santa: Agreed. Some of the ones that we work with are so advanced the machinery they have, the staffing they have is absolutely next level. I think the days of classing Indonesia as one of the less ethical countries is definitely gone.

Richard Gregory: Yeah. That is an outdated idea here. People don’t make as much money here. Yes. But if you look at their quality of life, they are not suffering. They don’t believe they’re suffering. So there’s no reason for us to pass judgment on them to say, oh yeah, because you all live together in one house and you’ve only got one TV and, and you sleep on the floor.

That’s not ours to judge. They are perfectly happy with the way that they live. And if we come at them with this mentality of , saying that their, that their lifestyle is somehow substandard, I think Indonesians are proud. They, they won’t like to hear that. And rightly so because, they’re living good lives. They have great, amazing families, amazing family structure, you know, Indonesia is a really good place to live. 

Absolutely. And also another thing, you know, when we’re talking about why would you work within Indonesia? They just have an incredible eye for aesthetics. 

That’s true. That is absolutely true. Indonesians are clever and creative and they don’t have any sacred cows. They’re willing to mish-mash things together that no one’s ever seen mashed together. And I love that. I love that they, they don’t have any, there’s no rules like we have in the west. We’re always so concerned about like, oh, is this going to look posh enough for this?

Or what is this style? We have all these like different, you know, stylistic kind of boundaries that we put on ourselves and Indonesia is just like, they will take any idea from anywhere and pair it with something else and just come up with something that’s so clever. So inventive. I just love that.

Skye Della Santa: That’s it. And, and they do have a very, like the Indonesian culture is so creative as well. I find like the design that’s coming out of Indonesia is just incredible. 

And one of the reasons also to talk about is the pricing like reasonable pricing pricing, comparative of manufacturing within Indonesia, against manufacturing to America, Australia, Europe, it’s, it’s unbeatable. There are always pros and cons when you’re going between each country, but definitely one of the pros is the pricing’s amazing. 

Richard Gregory: We often say that our products are American quality at an import price. That’s not just because this is an American based company. It’s also because Indonesian quality products are, is very high. It’s well up to the kind of standards that we’re used to because they they’re a bit old school. You know, they make products by hand and they they still have in their culture, the idea that you should make something that will last you, because you’re not going to have an unlimited supply of that thing.

So when you’re talking about sustainability, that makes a lot of sense, because , the order is reduce, reuse, recycle. The first step in that chain is reduce. That means you need to be building and buying better quality products . That’s the first step towards sustainability.

Skye Della Santa: Absolutely. The trend of fast fashion is fastly going out the door. 

Richard Gregory: Yeah. 

4) Sourcing Apparel Manufacturers for Our Clients

 So let’s move on to the next topic, sourcing for our clients. How do we do our sourcing? What’s the approach we take and how do we decide where to send a client’s products? 

Skye Della Santa: This definitely changes from client to client, depending on who they are, you know, what they’re minimum, what their order volume is like, is it just a little client that starting off or is it someone who’s larger that we can place with a country that can do the higher MOQ. Also something that we’d always look at is what’s the product. And potentially there could be a, you know, we would suit the country or the region of where we’re going to produce or where we’re going to manufacture to what the product is.

Richard Gregory: Yeah, every client has its own priorities. Every client is motivated by a different combination of practical requirements and ethical requirements, like what are the values of that brand? So we have to look at that and say, for example, if it’s a, a very specialized, very small company that wants to make things that are extremely sustainable, for example. That’s something that we would keep here in Indonesia because we know that we can get things made like I mentioned earlier by a small, let’s say a small craftsman who just works with his family and he might have just one single sewing machine in his house. And then the whole bunch of them just working out with one client basically. Handling the job really, really carefully and is able to accept a small MOQ

Skye Della Santa: That’s right. And then there could be larger clients who are more price sensitive, but then they have the volume to back it up. In that case we would be placing them with larger factories that can offer a higher efficiency. They can offer a much cheaper price. And then that’s when we would go looking for potentially a bigger factory within Indonesia or potentially if its specializing in a certain fabric, we could go to another country. 

Richard Gregory: Yeah. So if it’s, for example, leather, we might be looking in Italy. And if we were looking for leather at a lower cost, maybe we’d be looking in Argentina and Brazil, you know, cattle, countries. It all really just depends on exactly what the, what the brand needs, but that’s, what’s so unique about us is that we will evaluate every single brand based on their very, very specific ethos. So if you had a brand that was making underwear for women and you wanted it to be made in a factory that it’s woman-owned. And you want a portion of the proceeds to go towards supporting some type of social welfare program, benefiting women.

That’s something that we can do. We can put that together. That’s not even a stretch for us. 

Skye Della Santa: No, that is actually why when we are meeting factories for the first time we put them through a very stringent checklist. You know, number ones first and foremost, we’re always making sure that they’re ethical. That the factory is up to the standards that we need. But another thing that we do too, is we look for factories that, have certain features. So we work with a lot of factories that are LGBT inclusive. We work with factories that are family owned. There’s a, especially within Indonesia, we have a large amount of factories that are completely women led and women owned.

So for us, that is, that’s a great thing because we know each factory and, and what certifications that they have that we’re going to use. So when we do have the client that comes in, that has a very specific need, you know, it might be a woman entrepreneur who only wants to work with a family run business or a woman led business.

Then, you know, we can look at the factories that we do have, we can pick the perfect factory for them, but not only just picking it for their price or the quantity or the specialty that they need. We can also pick a factory that, that is more driven by women or, you know, that fits the exact requirements that they do have.

Richard Gregory: If you look at it from that perspective, then cost is just one consideration. It’s not the consideration. Cost can be important for sure. But if what we’re trying to do is support a brand through it’s entire production cycle, we can add a lot of value to a brand just by– not just telling the story is I think nowadays there are, if you look at the about us page on almost with almost any company, there will be a charming tale of how those garments were made.

But in reality, that hasn’t really been fact checked very often. It’s not always accurate. I think what’s really important for any fashion label to consider is they need to be able to back up the claims that they’re making. . If you have a need to document the way something was made, if you want to show how that garment was made and by whom. We can help you do that

We’re used to seeing this I made your clothes posters. 

Skye Della Santa: Yeah. Yeah. That was a very famous, it was still is very famous, but I feel we’ve definitely taken the next step up from that.

Richard Gregory: We, we can go way further than that. We can build story so deep into your brand that nobody can contest it.

Skye Della Santa: Yeah

Richard Gregory: Cause it’s real.

Skye Della Santa: And we have for many clients, like, it’s not just us saying that we’re doing it. It’s also actually we can go there and photograph them, video them,, you know, you can meet the people.

Richard Gregory: Yeah. So I think to me that’s one of the most exciting parts of my job is that I love the opportunity to do that storytelling through the manufacturing side. Where that was never really possible before, or it was never really considered, right. It was never really considered valuable to explain where anything was made. 

Skye Della Santa: No one cared. But now , what we’ve seen over the past few years are people becoming aware of this. People are wanting to know, and people are building that into the story of their brand. It’s not just, I have this amazing t-shirt. Let’s talk about the story and where it got made and the customer is wanting to know that. It is such a value added part when you are building a brand and when you are buying into a brand. 

Richard Gregory: Yeah, customers want to believe in the products that they’re buying. They want to believe that they’re doing good with their money. They want that. And of course, we give that to them and the world gives that to them in a very artificial way, a lot of the time. But now it’s time that we step it up and put our money where our mouth is and really actually do these things and…

Skye Della Santa: And share the story because they are exciting stories behind these factories. 

Richard Gregory: Yeah. I love it.

 So I guess we’ve covered everything we set out to cover today, huh? 

Skye Della Santa: Yeah, this is our second podcast. So I feel like this one was a little bit easier than our first. And, and definitely we were talking before we started and I think this one was something that we’re very excited to talk about as well. It came a lot easier because it’s something that we’re super passionate about and we can talk a lot about. 

Richard Gregory: Yeah, this is something we love. Next week we also have a topic that we’re going to love talking about. Skye will be out next week, but I will be here interviewing my lovely wife DesNeiges who is our design director. We’re going to be talking with her about the creative process. How fashion designers work, how she works and how fashion designers can work with us. So tune in next week. We’ll see you then. 

Skye Della Santa: Thanks for listening. We’ll see you next week.