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My name is Sylvia Ajaelu-Peters. 25 year old from London. Turning an obsession with fashion into a business ♥
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when choosing a manufacturer...
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Hi everyone,
Now that I am in talks with manufacturers both at home (UK) and abroad, I thought it would be a good idea to make a post about what to consider when shopping around for a manufacturer to produce your goods. Other than the idea, I would say choosing a manufacturer was one of the most important processes within the development of a product; single-handedly effecting both the quality and cost of the product that you will later go on to sell.... So below are a few tips I've put together; I hope it helps!
The first thing that I would suggest is to protect your brand, I couldn't stress this enough! In the midst of discussions, most companies will ask to see either designs or prototypes of the product you would like them to produce. However, you will not go into business with every manufacturer you come across and so it is essential that an agreement is drawn up between the two of you, stating that the company is restricted from using your ideas or designs if you decide to subsequently go with another manufacturer. You can do this easily by drawing up what is known as a Non Disclosure Agreement, that should be signed by both you and the manufacturer before any designs are released. You can ask a lawyer to draw these up for you for a small fee or you can even find a few free templates online, just simply adjust them to suit your needs as a company. *Links are below*
This way your ideas and brand is protected by law.
This way your ideas and brand is protected by law.
The second thing I would say is to have an idea of the quantity of products you would like made, and work around that figure. Although this seems like quite a simple concept, one thing people often overlook is that most manufacturers have a minimum order quantity that needs to be fulfilled before going ahead with any business agreements (I learned this the hard way). In the days when I was looking into clothing manufacturers I found that the figures that I was aiming for were far too small for most companies to go ahead with but there was also no way I could push the amount of products they were asking me to purchase. After AGES of research and running up my phone bill with constant international calls, I finally found a manufacture that could produce at the volume that was more suitable for a small business just starting out. Unfortunately, it was at this time that I decided to go in a different direction, funny how things work out...
**This next part is for those based in the UK, while manufacturing in Europe**
**This next part is for those based in the UK, while manufacturing in Europe**
And lastly,for those looking at manufacturers abroad, I would suggest that you look into your taxing strategy. Businesses in the UK do not have to start paying VAT in the UK until they are earning a certain amount...(I believe it is around £80,000 a year, but don't quote me on this figure). However, do not be fooled, you have to pay VAT somewhere, whether that be in the country you are manufacturing your product or the country you are selling your product; what you must now determine is whether it would be more profitable to pay taxes abroad or at home (before of course, you start earning a certain amount and have no choice other than to pay taxes at home). What I found again, in the midst of setting up my clothing store, was that although the VAT was higher in Italy (were I intended to produce my clothes), at 22%, paying VAT there actually took a smaller chunk out of my profits than it did paying VAT in the UK, were the VAT was 20%. This was because 22% of my estimated manufacturing costs was actually less than 20% of my estimated profit. Of course, these were all estimates and reasons why you need to be realistic when calculating them.
Anyway, I've babbled on for long enough....I really do hope this helps some of you while looking for manufacturers and please click links below for free NDA templates x
xoxo
Muna's angel x
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