Approaching the world of sourcing in a place like China can be a daunting endeavor, particularly because there is no “correct” way of doing so. There is little to no information on the internet to help with this process and because of this, it can be a challenging task for small to mid-sized companies.
So when choosing the right factory where does one start? What are the options like out there and does factory size matter? Obviously there are many different aspects to look for in a factory, but as a starting point, it is important to determine the most beneficial factory size to place your company in. So in this case, yes, size does matter. A LOT! So how does one make the right choice?
The key concept here is that order size and factory size must be well matched. Innumerable issues begin to arise when these two are misaligned.
THE BIG GUYS
When looking at larger factories, it is true that there are some benefits. Large factories are designed to produce mass quantities of shoes—so these are better matches for big companies who have larger order numbers. Larger factories can usually be trusted to be financially stable and reliable because they have huge clients like Nike or Adidas with a lot of revenue. They have a well established system of sub-suppliers that they can rely on, a good reputation, as well as a perfected shoe-making process that has been time tested. . However, this is where false assumptions arise in the eyes of smaller to mid-range companies when they look at these larger factories that the kings of footwear use.
It is a false assumption amongst smaller to mid-sized footwear brands that larger factories are more secure, can provide better services, have higher quality standards, and are more reliable when compared to smaller factories. These smaller brands with smaller orders become much less important in larger factories when they must compete against the industry giants like Nike or Adidas. Due to this mismatching, when a problem on the production line arises for one of the industry giants, their importance level increases and yours decreases. This is a scenario that would cause the large factory to be less responsive to your needs as well as creating possible delays and quality issues. You would likely feel like you are knocking on the door of an empty house. The solution here would be to find a smaller factory that can be more attentive to your needs.
THE SMALLER GUYS
Although finding the right smaller factory might take some more time and be a bit more challenging, a small to mid-sized company may find that they are more important and relevant to the smaller factory. The smaller company might even become a quarter of that entire factories’ business. And when something goes wrong and problems arise, the factory will be attentive to the issue because they value the business. Because of this, it is possible to develop more personal, trusting relationships with such factories, allowing for a smoother project from start to finish.
There are, however, some things to keep in mind when using smaller factories. The bottom line is that they are simply more risky. They don’t have the buying power and strong financial relationships with sub-suppliers that larger factories do. This, in turn, means that sometimes these smaller factories can get pushed around by the sub-suppliers, causing delays or quality issues. Also, unwanted surprises are more likely to occur at smaller factories. Having boots on the ground at these smaller factories is crucial to make sure the process is running smoothly and that expectations are being met. Lastly, it is also true that these smaller, lesser known factories might not have the latest technology. But this does not mean that they cannot match the quality and speed of a larger factory, nor does it mean that they are not capable of producing new, innovative concepts for shoes.
So how does factory size correlate to matching technical innovative footwear ideas? Most of the time it doesn’t. If you have a new shoe concept to produce, obviously you have to research and find a factory that can get it done, but it goes much deeper than that: it all starts with finding the right partner. It is crucial to find a factory with an owner and a team that is engaged and excited about the new idea. They need to be able to clearly understand what you are trying to do and be passionately interested in making it happen. This partner needs to be inspecting and fine-tuning the shoe along every step as they communicate with you and the production line.
Finally, it is important to understand pricing differences between large and small factories. Larger factories have more costs due to more labor and overhead. Therefore, it is more expensive to run a larger factory than it is to run a smaller factory. On the flip side, when it comes to materials, larger factories have lower costs because they make larger material orders and buy in bulk.
Again, many have found it to be challenging to find the right factory by searching on the internet. Yes, there might be a dozen or so famous factories that are highly visible online and easy to learn more about, but there are thousands of smaller factories that are unknown by the industry at large. This is why it is imperative to have a guide to help make sense of the chaos. And this is exactly how Concept 21 can help. Concept 21 has been creating relationships with factories around the world, both large and small, for over 30 years. We also have many connections throughout the footwear industry, so if we cannot directly find a factory that matches your needs, we can find one through our network. Due to our experience, we understand how the system works and have perfected the process. From commercialization, to development, inspections, and logistics, we can handle all aspects of making a shoe. Lastly, we have boots on the ground at every step. We also have team members that live by the factories, constantly inspecting quality and making sure the show is running smoothly. So when assessing how factory size matters to you and which factory to choose, we think size does matter—and Concept 21 is here to help you make the best possible decision for your company.
Written By - Chaz James