How the industry has changed forever

This is the entry I mentioned in passing yesterday. Since I tend to ramble, it’ll have to go up in several parts.

I know most of you don’t make children’s products but like it or not, CPSIA has forced long term trickle down effects through out the industry so you should read this anyway. Even if we could hit the pause button or wave a magic wand and just make this whole thing go away, there are larger economic and retail trends bringing these as yet, unlabeled trends to bear.

The biggie:
Everyone is going to have to get a lot more professional. I took a lot of heat saying that before. Professional doesn’t mean bigger. It means better.

I was talking about this with a friend of mine and honestly, feeling a bit vindicated because I’ve long said people should focus on their core competency. This environment -with or without CPSIA- now forces it. We will see more retailers abandoning manufacturing and more manufacturers abandoning retail because few do both well. I’ve always felt that many manufacturers who retailed, did it because in a manner of speaking, they disrespected or minimized the intangible intelligence of what it takes to move product at retail. Likewise, retail must not have thought it was hard to manufacture and it wasn’t; not using facilitated private label programs, hiring out the heavy lifting as they are/were.

What no one seems to see, is that the issue at the forefront now is accountability. Whoever you are, you’re more accountable and responsible than you were before CPSIA whether you make kid’s products are not. Companies are looking for ways to reduce their risk and liability; they will resume their core activity abandoning the rest. Sure, some can eke out a space for themselves and hang on by their fingernails with disruptive technologies (consumer direct, internet sales) and hope for a return to those heady days of freewheeling consumer spending but who knows when that will be? In sum, I think there will be more gains in traditional retail/manufacturer relationships.

In my discussion with my friend (she’s a retailer who does some private label) we agreed there would be a return to traditionalism, like selling via reps to retail and wholesale. The market is going to shake out anyway, retail was already in trouble. In the case of CPSIA, if we are later permitted to use vendor certification of components, consolidation will still be inevitable. For starters, the market will be weeded to only the larger of the smaller players who have access to traditional sourcing venues. You can only get vendor certs if you’re buying from mill representatives -but not jobbers like so many are. As my friend said, if jobbers don’t even know the fiber content of the goods they sell, they won’t have the mechanisms to pass along certs if they’re buying overstocks from other mills or even excess inventory from other manufacturers. The affect of CPSIA will be that children’s wear designers will be forced back into the most traditional format of manufacturing probably before anyone else. I don’t expect anyone will like it; many got spoiled by the ease afforded by technology to reach the consumer. But now, those edges aren’t so fuzzy anymore, they aren’t so nebulous. We have hard rules now. And you’d better believe that retailers of any stripe have taken notice affecting everyone in this market.

But back to a return to traditionalism and professionalism (better, not bigger). Speaking of, how many of you don’t even have an RN number? You’re going to need one now. They’re free, may as well sign up now.

The big reason why you’ll need one is because retail will shake out itself with a lot of failures. The stores that survive -the ones you and everybody else wants to sell to- will be more professional (better, not bigger) themselves. As such, they have standards you’ll have to meet if you want to get in. Traditionally, manufacturers had little recourse in selling their products themselves, so they had to adhere to strict fulfillment criteria of (often larger) stores. Any manufacturers that failed to meet those standards were mostly eliminated at Market or even delivery. This was especially true of products subject to rules or bans like children’s wear. This system was not perfect but this holistic vetting system of professional retailers as gate keepers prevented unsafe or substandard product from entering the consumer stream. It may not seem that way now (you can only imagine product that doesn’t make the cut) but it had been and it will certainly be moving back in that direction. Retail must react because in this climate, consumers are demanding more value.

A lot of tiny operations out there resent me. I’m an easy big target. I say things you don’t want to hear. My point being, you’re going to start hearing a lot of the things I’ve been saying from other people, assuming they’ll talk to you at all. Mostly they just won’t. Even in this climate of hungry sewing contractors, they’re also getting pickier because they don’t have time to waste. Many are refusing children’s products altogether so if you do manage to get in anywhere, you’ll have to know your stuff. I spent yesterday talking to a contractor who ran a net loss last year. Too many people coming in the door with bad patterns that held up production. Everything flows in process.

And financing? Have you ever heard the expression, “Capital is a coward”? Colin Powell is most often credited with saying that but I learned the phrase in an Econ 101 textbook nearly 30 years ago (gosh, I don’t feel that old).

Attracting this money isn’t easy. Capital is a coward. It flees from corruption and bad policies, conflict and unpredictability. It shuns ignorance, disease and illiteracy. Capital goes where it is welcomed and where investors can be confident of a return on the resources they have put at risk. 

Do you know what it all boils down to? It’s trust. Trust and confidence. More worrisome than a reduction in consumer confidence is diminished confidence among business partners. As Colin implies above, trust is based on credibility. In this tightening market, you may not have money but you must assume the responsibility of developing credibility no matter how unpopular it may make you (me). I’ll write more about that next.

Get New Posts by Email

7 comments

  1. Victoria says:

    Thank you, Kathleen, for helping us to see a way through all this turmoil…Somehow, what you said made me feel very humble. Trust and confidence. What could be more important in any relationship?

  2. ginevra says:

    I understand professional means better, not bigger. I’m all for professionalism, credibility and building trust, no problems there.

    My worry when I read this, ‘tho, is does more professional mean more expensive? Particularly with the financial crisis, does professionalism mean I can’t now/won’t ever be able to afford entry into this game?

    I wonder whether similar worries explain most of the flack you get…

  3. Donna Sebastian says:

    Kathleen, I have been following this thread for some time and have a question. I belong to a fiber collective here in Silver City, New Mexico. Members make garments and anything else from fiber and sell through our retail store, The Common Thread. I have been wondering how the laws effect artists who sell on commision or consignment. It seems that a garment being sold in the open market is a garment no matter what. I put care labels and fiber content labels in my garments but no one else seems to even think about this.

  4. Kathleen says:

    My worry when I read this, ‘tho, is does more professional mean more expensive? Particularly with the financial crisis, does professionalism mean I can’t now/won’t ever be able to afford entry into this game?

    Like I keep saying over and over (how come no one listens to me?), it costs less to do things right the first time. Everyone consistently minimizes the intangible costs of DIY and write off their own labor because it’s “free”. I get it, I really do but often, it’s really a difference in priority. People tend to form very clear ideas of how the process should work and ignore anything that conflicts with it. Or maybe they don’t ignore it, they can’t see that which they don’t understand. The example I consistently flog is people who say they can’t afford to buy my book because they need every penny to hire a sewing contractor (why they’re contacting me) to sew up a bunch of products they don’t even have orders for but if they’d read it, they never would have been backed into that corner. In these cases, they’ve typically gone the DIY route with patterns, again minimizing the intangible costs and then their order is hung up at the contractor because it can’t be sewn successfully. But again, by then they’re backed into a corner and after the fact, have to scramble for the money to pay excess costs for sewing that never needed to happen. There’s one big difference between better. With better, most of your costs are up front in one neat package price. With unsupervised DIY, it’s pay as you go and often at highly inflated prices.

    Yes, there’s costs inherent to the process but they don’t have to be inordinate. In all cases, even patterns, it helps to know the right people who can help you work through it. We do this all the time on the forum. The quality of the company you keep matters a great deal. Previously I’d written:

    The difference between you and people you want to be like is that they have already figured out that they won’t find what they’re looking for wherever it is you’ve been looking… the only way you can move up another level is to move up another level with respect to the company you keep. You are a reflection of who you hang with, whether it’s your line or your friends. Their influence and advice rubs off on you.

    Based on my recent experience of joining the AAFA -which I could not “afford” (meaning, justify based on anticipated return)- I’ve found my own advice to be even more true than ever.

    Switching gears, Donna says:

    I have been wondering how the laws effect artists who sell on commision or consignment. It seems that a garment being sold in the open market is a garment no matter what. I put care labels and fiber content labels in my garments but no one else seems to even think about this.

    They’re required to comply with labeling laws too.

    I think much of the broo ha ha over CPSIA is forced compliance with professionalism (better, not bigger). Till now, people had the “freedom” to do as they wished, thinking the laws didn’t apply to them for whatever self-defined reason they had. Again as I said before:

    With respect to the tiniest of producers, I think an issue that has not been discussed openly is the conflict born of entitlement, often expressed in blogs and forums across the web as “freedom”. As the system existed, they had the freedom and entitlement to conduct their affairs as they saw fit and it won’t be that way anymore. It is only natural to resent that. We all resent forced change but it’s not practical to wallow in it or throw fits about it. Even under ideal modifications, this law will force many to either become more professional [better, not bigger] or get into something else. If this is something you love, it can only rankle being forced to put on a suit that’s too new or big for you. The truth is though, the only difference between many Etsy and eBay sellers and members of our forum is not company size but professionalism (for some reason, visitors and forum guests think we’re all big companies).

    It boils down to forcing a commitment where there once was freedom and explains why men resist proposing marriage. This law may force the decision among tiny producers to become more serious about it. I don’t know how they can comply with the labeling requirements if they’re not using better management and tracking methods. And it’s not that they must use full-bore practices used by the largest firms (we don’t) but they’ll need to mature and adopt accepted standards that stand the test of time (in my book). For what it’s worth, if I were a tiny producer, I’d resent any of these options. It doesn’t seem quite fair if you’re used to doing things your own way and want or need to be flexible. It doesn’t feel fair to take something away from you that you’ve always had

  5. Julia says:

    To quote Ginevra: “My worry when I read this, ‘tho, is does more professional mean more expensive? Particularly with the financial crisis, does professionalism mean I can’t now/won’t ever be able to afford entry into this game?”

    I can understand your thoughts, but I think as Kathleen has stated, and everyone else has realized is that this industry is a BUSINESS. Always has been. If you don’t understand or know the business aspect of this industry, then there are a lot of things that could go wrong if you are not educated on what this industry is all about.

    I am a freelance designer and a fashion designer instructor at a local college. I do my best to pound into the heads of my students that they have to get the stars out of their eyes and realize that this industry is not glamorous and to be realistic in what the industry will hold for them. They have to know how to sew, make patterns, draw (both freehand and computers), Gerber, market research, consumer behavior, all of it, before they can ever be “designers.” That titel goes to those who have been able to successful stay in the business year after year.

    We had a seminar last night with several industry professionals who kept saying over and over again the need to know the business aspect of our industry – its 95% business and 5% creative. But all they heard is that patternmakers COULD make $50 an hour (and this fee was mentioned by one of the guest speakers who oversees local costume design production) and that you better know how to make that pattern with your eyes closed or you are not going to make it, at least not with her business, and that she looked at quality of work as well as years experience. What did the students hear? That they would be making $50 an hour…not that they had to have the skills and knowledge, but that once they were out of school, they were going to be making big bucks! Yeesh.

    What I am trying to say is that everyone can enter the game…but only those who KNOW the game will be winners. The whole CPSIA thing has brought to light (if we are trying to see something positive out of all of it) that the weak will be out of the game…it is survival of the fittest and the fittest are those who know the business first and foremost. That’s not to say that people who were doing well and now with the CPSIA issues will have to drop out of business due to cost factors, were “weak.” It’s just that people need to realize all of the elements that go into creating a clothing line from scratch….product development, target market research, marketing, sourcing, contacts (!), you name it, you better know all of it before jumping in.

    As Kathleen stated, “Like I keep saying over and over (how come no one listens to me?), it costs less to do things right the first time…There’s one big difference between better. With better, most of your costs are up front in one neat package price. With unsupervised DIY, it’s pay as you go and often at highly inflated prices.” Know what you are doing from the get-go and then proceed ahead.

  6. Trish says:

    I find it amazing that anyone wants to hassle Kathleen about this website and the information offered free here. Kathleen is providing a service to all of us… and she did NOT make the CPSIA!

    I highly respect Kathleen and I find it objectionable for people to pick on her… no one is forced to read this blog. If you do not respect Kathleen’s formidable knowledge and professionalism, there is always the mighty X at the top right hand of the page!!!

Leave a Reply

Your email address will not be published. Required fields are marked *