Manufacture Apparel in Vietnam - Getting Started

1. What will you learn in this course?: Hi, my name is Chris. I'm an American living here in Vietnam working in the apparel manufacturing industry. I've had the pleasure of working of his fashion startups in Vietnam over the last 12 years. I observed the challenges they faced. I discovered the tips and tricks, they got them started quickly. All of this led to the creation of this course so that I can share my apparel manufacturing in Vietnam. Insider knowledge and experience with you. In this course, you will learn how to reverse engineer your minimum order quantities, calculate your factory target price. Learn three common mistakes to avoid and be shown. The first three steps you need to take before contacting a sewing factory in Vietnam. By the end of this course, you will understand what the factories need. You will know what you must do to prepare before contacting them. If you do everything I teach you, then you will be ready to get started producing apparel. In Vietnam. We will compare the cost of design and development versus bulk production. We will address the risks of working with small quantity factories. I will explain what it takes to work with certified fair trade factories. You will learn the difference between LDP and FOB prices, as well as what the AQL standard is and why it's important. We will consider the markup options you have and how they affect your ability to negotiate. We will go over what is included in a tech pack, explain how to do a quantity breakdown list and create a quality control checklist. My passion is advising entrepreneurs as they meet factories in Vietnam for the first time, to negotiate prices, negotiate terms, and to follow through with production, quality control and shipping. Where are you in your journey? My assumption is that you have an idea. You have designed a garment, now you are ready to contact a factory. And my right. Or do you have an existing brand that is growing and you want to move production overseas. Perhaps you are producing locally and the factory can't offer you the design options that you want. In any case, this course is for you. Let's get you to the point where you are ready to present your designs and initiate your detailed plan to launch your production in Vietnam. In the next lesson, I share a bit more about how I got started in Vietnam apparel manufacturing. Thanks for listening and welcome to Vietnam. 2. Who is the instructor?: Vietnam was never on my radar until a friend invited me to visit for five days back in 2008, I fell in love with the weather, food, entrepreneurial spirit of the people and the traffic. I chose to settle down in Vietnam because I felt safe. And there were many business opportunities. It was clear that apparel manufacturing was one of Vietnam's strength. I started working as the marketing manager for a sewing factory. I learned the business by meeting customers and answering all of their questions. I acquired a deep understanding of apparel manufacturing from a factory's point of view. My first chance to work on the factory floor was working for visit tech and Australian work where brand they hired me to source sublimation printing by fleece fabric and manage sewing garments with reflective tape. I love apparel manufacturing because you get to be creative during the design phase and you get to be technical during the manufacturing phase. My navy training as an electronic technician came in handy when working with electric sewing equipment and following procedures. It's amazing to watch how two-dimensional fabric transforms into a three-dimensional garment. Given that my mother was an educator, it was natural for me to start teaching. After one year of explaining the basics of apparel manufacturing to dozens of fashion startups. I decided to write down everything I had learned. This turned me on to writing and publishing e-books. My ebooks focus on the practical knowledge needed to get a factory to say yes. My goal was to prepare people for price negotiations, production, quality control, shipping, and more. E-books allowed me to share my tips, tricks, knowledge, and experience with people around the world. In my first book, I explained 16 production steps related to apparel manufacturing. I start with choosing your fabric and end with making sure your shipment passes customs inspection. After reading this book, you will feel prepared to meet with Vietnam apparel manufacturers. In 2018, I was getting many inquiries for ICO fabrics and decided to research them myself. I studied organic cotton, bamboo, hemp, recycled polyester, wool, and silk. I introduce 46 sources of eco fabric and explain various standards and certifying bodies. If your brand is based on ego fabrics, then this book is for you. Quality control is a dry subject, but it is a must know subject. In this book, I explain how to use the acceptable quality limit system and the four-point fabric inspection system. I also introduce third-party QC companies operating in Vietnam, as well as share QC insights based on interviewing six different factory owners. This is a great book to read on the plane as you arrive in Vietnam to oversee production and quality control. Finally, in my make tech packs in Vietnam book, I list out 27 questions that should be answered for a tech pack to be complete. I explain how to use your tech packs as contracts, as QC checklist, and as cost breakdown guides. Tech packs are the key to success when manufacturing in Vietnam. Working in factories, advising dozens of entrepreneurs and doing the research for my books has given me the confidence and excitement to share my knowledge with you in this course so that you can be successful first time you step into factory. In the next lesson, I will give you my best advice based on ten years plus of working with entrepreneurs in Vietnam, making their dreams come true. My advice is reverse engineer your minimum order quantity based on your initial capital investment amount. 3. Best Advice: Reverse Engineer your MOQs: Are you planning to produce apparel in small quantity in Vietnam? Here is my best advice. Reverse engineer. What is possible based on your capital investment amount? Start with your initial capital investment in amount, estimated manufacturing price. And from these two numbers, figure out your minimum order quantities. I call this reverse engineering your minimum order quantity, you're MOQ. Most people assume that you must get the manufacturing price from the factory first before you can decide how many pieces to produce. My experiences that you don't need to wait for the factory to give you their price, to figure out the quantities you will produce. You can and should figure out your quantities before talking to a factory. Allow me to explain. How much financial capital do you think the average entrepreneur begins with? $10,000.50 thousand dollars or a $100 thousand. How much do you have to invest? Let's assume you have $50 thousand. With $50 thousand, let's say that for every dollar you spend on running the business, you have $1 for producing garments in Vietnam. That's a ratio of one-to-one. This means you have twenty-five thousand dollars for running the business and twenty-five thousand dollars to produce garments in Vietnam. Make product. Now focus on the twenty-five thousand dollars you have to make your garments in Vietnam. My question for you is, how much of the $25 thousand for making product will be used for. Wait for it. Design and development. Remember, factories in Vietnam do not offer design and development services. Factories produce garments. They don't do design and development. You have $25 thousand to make product. I estimate that you will spend approximately $5 thousand for design and development costs. Therefore, you only have $20 thousand for bulk production. You can produce $20 thousand worth of product. This is good information, It's a starting point. We now know how much capital you have to produce your garments. You might ask why $5 thousand for design and development? Well, my answer is, you will have to pay technical designers, graphic artist, and sample rooms to document, document your designs, details on paper, and make multiple samples. In my experience, you'll have to make at least two to three sample iterations before you will be happy with your design. There will also be travel costs, sample shipping costs, and material cost during the design and development phase. The design and development expenses are a reality and often overlooked or not anticipated. Now, let's look at the numbers. If you only have $10 thousand as your initial capital investment. With $10 thousand initial capital investment, you still have to spend $5 thousand for running the business and $5 thousand for making a product. This means that you don't have any money for bulk production. Because the $5 thousand that you have to make the product will be used for design and development and you have no money leftover for making your product. The freelancers that you hire, they don't adjust their prices based on how much initial capital investment you have. In this scenario, if you only have $10 thousand, you are in a pickle. It's a no-go conclusion. Do you see why knowing the initial capital investment amount is so important? I asked my clients this difficult question from the get-go. And often they are taken by surprise and sometimes even offended or defensive. If the business numbers don't make sense, then stop and rethink your plan. Knowing how much capital is available for both bulk production allows us to see the quantity breakdown possibilities, which we will go over in a minute. And it also allows us to make a go no-go verdict quickly. The ultimate question is, is your plan realistic from a financial perspective and keeping in mind the minimum order quantities that are imposed by the factories in Vietnam. If there is not enough capital investment. I'm not saying give up. I'm simply suggesting that we go back to the drawing board and devise a realistic financial plan. Okay, now let's go back to the $50 thousand capital investment amount where we had $20 thousand available for bulk production. Imagine you have $20 thousand for bulk production. First thing we need to do is estimate the manufacturing price. We will estimate the manufacturing price of the t-shirt to be $5. I will explain how to figure this out later. Then we divide 20 thousand divided by five and we get 4 thousand t-shirts. This is good information. Now the question is, will 40 thousand t-shirts be enough quantity for the factory to say yes, based on my experience and they will say yes to your order. The reason is most t-shirt factories have a minimum order quantity of at least 1000 t-shirts per style per color. You're probably asking, Chris, How did you come up with $5 for a shirt? And my answer is based on experience and typical retail prices of t-shirts. I explained how to do the math and calculating the manufacturing price based on retail price. In the next lesson called manufacturing math. Let's look at some other estimated manufacturing prices. Here are some ballpark manufacturing prices for different products. Take a few seconds to look at the table closely. I got these manufacturing prices based on experience. By dividing the typical selling price for each type of product by five, which is a typical retail markup. If you're selling direct to the customer, use your selling price and divide it by five to get your estimated target manufacturing price. I explained this in more detail in the next lesson titled manufacturing math. Of course, these prices will vary depending on the complexity of your product. Quality control testing that you require or special packaging requirements that you have. For the purpose of business planning, financial planning, these estimated manufacturing prices can be used to reverse engineer what quantities are possible based on your initial capital investment amount. In summary, initial capital divided by estimated manufacturing price gives you the quantities you can produce. Your quantities needed to be big enough to meet the minimum order quantities of the factories in Vietnam or else they won't produce for you because they will lose money. So how much do you have to invest and what quantity breakdown Do you wish for? Is your plan realistic given the minimum order quantities required by factories in Vietnam. If you work with me, then we will spend time figuring out what is possible based on your initial capital investment. We will figure out if the quantities you wish for actually make business sense in Vietnam or not. If they don't, we will figure out just how much capital you will need and go from there. In summary, decide how much you will invest. Estimate the unit price, estimate, the target MOQ. Realize what is possible. Make adjustments if necessary. If you don't have enough initial capital investment, then either raise more capital or meet the MOQ by rethinking your collection and the quantities per style. The amount of money you have to invest determines what kind of factory you'll be able to work with. Many of my clients. They asked me for a certified factory where the workers get a fair wage and have a good, good working conditions. If you only have a small amount of money to invest and therefore want small quantities, then you may have to place your order in a workshop which may not meet your standards. Bottom line is, if you want to work with certified factories than you need to meet their MOQ. And therefore, you need a high enough amount of initial capital investment to get started. My best advice is to reverse engineer what is possible based on your capital investment. In the next lesson, we will calculate your manufacturing price based on your retail price and compare your profit to the factories profit to understand why some factories refuse to work with you if you're doing small quantity. Thanks for listening and have a great day. 4. Manufacturing Math Manufacture Apparel in Vietnam: The $1 million question on everyone's mind is just how cheap will the price be if I'm manufacturer in Vietnam? Don't worry, the price will be cheap. But the real question is relative to what? In this lesson, I will try to convince you to focus on what the price needs to be relative to your retail price and markup percentage. We will also calculate how much profit you can make and compare it to how much profit the factory will make. Do you have math anxiety? I do. My mind shuts down when I start doing the math. Well, I'm here to tell you, do whatever it takes to face the numbers. You will feel empowered and safe by having a good handle on basic manufacturing numbers. Knowing the numbers will give you confidence. Let's start by defining landed duty paid price, LDP price. Ldp price is the price you will have to pay to get your goods into your warehouse. Ldp includes factory price, shipping costs and import tax. Important duty. Commit this to memory. Ldp includes factory price, shipping costs and import tax. It is the ultimate price you will have to pay before you can sell your goods to your customers. Ldp can also be thought of as your cost of goods sold. Later, we will use the LDP price to calculate your profit. Now, let's talk about markup percentage. Let's assume you are selling direct to your customers. You're selling retail. How much will you mark up your products? 304%, 105%, 100%, or 600%? In the past it was normal to mark up the landed duty paid price by 600%. But since e-commerce has boomed and there's a lot of competition and downward price pressure. 300% or 400%. Markup is realistic. In my opinion. My point is that choosing a markup percentage is a business decision. And knowing years yours will help you work with factories in Vietnam. How much you mark up your price depends on your product, your competition, and your ability to sell. A brand like Gucci might mark up their products 1000, 0%, whereas Walmart or CNA may only mark up their products to 100%. My question for you is, what is your markup? The formula for markup is retail price minus your landed duty paid price divided by your landed duty paid price. You can also think of it. Think of it as your sale, sell price minus your cost divided by cost. For example, if you sell a t-shirt for $30 and it costs you $6 to make and get shipped and pay your duty, then your markup is 400%. Who cares? You might ask, well, if you know your retail price and your markup, then you can calculate your landed duty paid price. You can calculate what the price needs to be in order for manufacturing in Vietnam. To make business sense. You, the formula is retail price divided by mark-up plus one equals your landed duty paid price. Let's say you are making a woman's legging and you plan to retail it for thirty-seven dollars. Let's say you decide that you will mark up the leggings 300%. Now we can calculate that the landed duty paid price needs to be $9.25. Do you see why this is helpful? Having this information before you contact the factory should give you a sense of calm and control. In anticipation of negotiation. You have a clear target. If the price that the factory offers you is over this target, this target price of $9.25, then no deal. If the factory price is lower, then you're in good shape. When you calculate mark-up, you'll get an integer number like three. And you might wonder, well, how do you go from three to 300%? Here, this slide shows you that three equals is the same thing as three over one, which equals 300 over 100, which is equal to 300%. So just remember that a markup of three is the same thing as saying a markup of 300%. Get practice doing this manufacturing math by completing the worksheet associated with this lesson. If it's not a 100% clear to you. Now remember, there still is shipping cost, which I'm estimating here to be $0.50. Then there is the import duty cost, which I'm estimating a $1.30. You get the factory target price. So you're landed duty paid price is $9.25. But the price that you want to be focused on when you're talking to the factory is the land of duty paid price minus the shipping and the import duty. What I'm calling here the factory target price. This $7.45 is the actual target price the factory needs to achieve. These numbers are important because you want to have that sense of control and calm at the negotiation table. And you achieve that by knowing what the factory price needs to be and why it needs to be at that price. Knowing your factory target price also helps you to choose the type of factory you can work with. Let's say your retail price for a T-shirt is $10, then your factory price will be very low. You will have to work with a cheap factory, which is risky, like a workshop. But let's say you are able to sell a t-shirt for $40 because your brand is popular and you have a very good sales team, then your factory price will be higher. And you can work with expensive factories, which means better customer service and less risk. Never give your target price unless they insist. Some people say never give your target price because you want to maximize your profits. This is good advice. But what if the factory insists? The, my advice is to give them your target price minus $0.50. If your target, your factory target price is $6, tell them that your target price is $5.50. The factory will know right away if they can be close or not. If your target price is way too low, then they will tell you that you saw that nobody wastes time. If your target price is workable, then they will continue the discussion and the mood at the negotiation table will be positive and hopeful. In any case, you know exactly what the price needs to be. And that's what matters most. Calculate your target price in advance so that you can have that sense of calm and control at the negotiation table. Knowing these numbers gives you confidence. Now, let's briefly talk about other prices that you will encounter. Ldp price, you already know landed duty price. It includes the factory price plus shipping and duty. I recommend that you memorize the meaning of FOB price and x factory price. Fob stands for free onboard. And it is the price you pay the factory to deliver the finished goods at the nearest port in Vietnam. Their service includes getting the garments free onboard the container ship. You are then responsible to pay for shipping and import tax separately. Now let's talk about ex factory price. Ex factory price is the price you would pay if you picked up the goods at the factory. Ex factory is very rare. But good to know. Fob is the most common pricing terms that you will work with. These price definitions are important to understand simply because you will hear them once you start manufacturing and Vietnam know that factories most likely will not give you an ex factory price. And they will not give you an LDP price. They will give you an FOB price. In other words, they want to sell to you on FOB terms. You can ask for x factory or LDP. But the majority of factories prefer FOB. The reason they prefer FOB is that they don't want to be responsible for paying for shipping and import tax. Doesn't make sense. I recommend you Google Incoterms. Click on the images where you will see this chart. And it will help you understand. Shipping terms like x factory, FOB and LDP. Study this chart for a minute. X works is the very first one at the top E XW. And it shows you the point of transfer. The factory delivers the goods to you. From the factory. The seller being the factory. Fob is the fourth from the top. Ldp is listed as DDP at the very bottom. Delivered duty paid and landed duty paid have nearly the same meaning. Now, let's talk about estimating profits for you and the factory. The question is, what is your profit if you make a 1000 t-shirts and the LDP price is $5. Let's say you sell the t-shirts for 25 bucks, then the LDP, LDP price is $5. So your profit is $20 per shirt. If you make it 1000 shirts times 20th, $20 thousand. Not bad. Pretty motivating. It's good money. Now, take a minute to understand how much profit the sewing factory will make. You will be shocked and understand why most factories don't like doing small quantity. The FOB price that they sell to you is $4.50. Their cost of goods sold is $3.75. So they make $0.75 profit per shirt. By the way, that's a 20% markup, which is typical for small orders. Most factories operate on a 5% to 20% profit margin. If they are making large volume for a company like Nike, then they are probably operating on a 5% profit margin. If they are producing small volume, like 11000 pieces per style per color, then their profit margin might be as high as 20%. As you see in this example. Factories are lucky if they make $0.75 per shirt. So their total profit is $750. Not very exciting. Not as exciting as compared to your $20 thousand profit. Do you get my point? Do you see why factory shy away from small volume manufacturing? Clients often say, I'll be happy to pay more. Well, even if you paid $2 profit per shirt extra, It's still not exciting for a factory when you do the math. Factories only make exciting profits when the volumes reach numbers like 10 thousand units. Manufacturing in Vietnam is all about achieving economies of scale. To maximize profitability. Factories will still work with you even though they are only making 20% profit versus your 300% profit. The takeaway here is that they will probably lose money on the first-order. Their strategy is to get your repeat business and grow with you. They make their money on subsequent larger volume orders. The point of this lesson is to understand the numbers by doing the basic manufacturing math and seeing the numbers from both your point of view and the factories point of view. Thank you for listening and have a wonderful day. In the next lesson, we will talk about when is the right time to contact a factory. 5. Right Time to Meet Factory?: Approach the factory at the right time. There are three common mistakes I see startups making when producing apparel in Vietnam. The first mistake is to approach factories too soon. The right time to contact the factory is after you have completed 80% of your design and development phase. In other words, you have a tech pack and a physical sample. If you contact factories too early, you risk losing your window of opportunity. If the factory is recognize that you are still in the design and development phase, then there is a high chance that they will mysteriously disappear and you will be left frustrated and in the dark. Let me shed some light on this common mistake and offer some solutions. The journey you are embarking on in manufacturing apparel and Vietnam has three phases. Phase one, the design is in your mind. Phase two, you create a physical sample. And phase three, you hire a factory to mass produce your sample. The first two stages are called Design and Development. Question. What stage are you in? The right time to meet a factory is after phase 12. After the design and development is completed. Factories make garments. They don't design and develop garments. I see my clients hoping the factory will help them with design and development. This is a common mistake. Why? The reason is the staff working in factories are not trained to do design and development. Merchandisers source the fabric and trims you want. They don't source what they think is best. They do what they're told to do. Sewing staff are trained to copy your design over and over. In Vietnam, the culture does not teach brainstorming nor creative thinking. In school and at home. They are taught to do as they are told. Taking a timeout and considering alternate ways to produce your design is not what they are hired to do. Asking a factory to do design is like asking the Starbucks barista to combine a pumpkin spice Frappuccino with a TASO Chai tea to see how it tastes. Then telling the barista, if it tastes good, then I will buy it. It doesn't work at Starbucks and it doesn't work when producing apparel in Vietnam. These sores are very good at making the same thing over and over. They are not good at design development and brainstorming. They are hired and trained to specialize in one skill and repeat it quickly. Here you see sample room sores. They are the best source who can so any kind of garment. Their job is to make samples based on your technical specifications. They will reproduce your sample according to your instructions. They will not alter your design in a way that they think is better. Some of my clients tell me, I can do the design and development myself. Yes, you can. I support you to do so. But my advice is get help and pay for it. There are freelancers and companies who offer design services. Pay them to do design and develop your samples with them. Before you contact a Vietnamese sewing factory to show them your samples. Work face to face with these freelancers to learn and to quickly make improvements based on what you learn as you go. Here are some design and development companies that can help you. Lucas is the founder of product refinery. His team offers services like brainstorming, design options, creating tech packs, and making samples. Here you can see a jacket he designed and produced for his client in Vietnam. He even came to Vietnam, which is how I met him. He came here to work directly with factories on behalf of his clients. He is based in Ohio, USA and can be found at product refinery dot. Ceo may co-design is another company that can help you prepare to meet factories. They have teams of experts in Austin, Miami, San Francisco, and Toronto. Check them out at Makkot design.com. In fact, there are companies or individual freelancers in every major city around the world. They can help you through the design and development phase. For example, sarah specializes in women's fashion and is based in Manchester, United Kingdom. There are communities like makers row in New York with a plethora of resources and classes. Learn more about them AT Makers row.com. Deep where offers full-service production and has 12 offices around the world and manufacturing teams In Thailand, Vietnam, China, Portugal in India. India source in Los Angeles also offers design development and small quantity manufacturing. Learn more at Indie source.com. Depending on where you live. Just Google, things like Fashion Incubator, and then insert your city. For example, here we googled Fashion Incubator in Berlin, Germany. Or you can Google fashion design company, for example in Paris, or fashion designer in Vancouver, or pattern maker in Dubai, or seamstress in Johannesburg. As examples. Those keywords plus your city will help you find professionals who can help you with design and development. Get their help to make your tech packs and physical samples before you contact factories in Vietnam. Insider tip number one, get an editable version of your tech packs. When you negotiate the price and terms with your freelance tech Packer, have your tech packs made. Insist on getting an editable version of the tech pack. You will want to be able to easily update the tech pack yourself in the future as you make changes during the design and development and production process. If the tech pack is delivered to you as a non editable PDF, then making updates requires that you pay more money to the tech pack creator every time you want to make a simple update. The right time to approach a factory in Vietnam is when you have tech pack that is 80% complete and you have a physical prototype that is 80% accurate. Insider tip Number Two, rookie mistake is to come to Vietnam with just one sample. The first factory you go to, we'll ask you to keep the sample for a day or two, or maybe even three or more. If you don't leave it with them. Then number one, they will suspect that you are visiting other factories and feel that there is no loyalty. Number two, It's harder for their technical team to accurately quote price. If they don't have a physical sample in hand. Plan to have at least four samples made and give out three of the samples to the factories you meet. Always keep one for yourself. In the next lesson, we will talk about another mistake that startups make. They fail to understand why M O queues are so hi, thanks for listening. Have a great day and welcome to Vietnam. 6. Understand why MOQs are so High: Understand why M O queues are so high. The second mistake I see my clients make is not understanding why MO cues in Vietnam apparel manufacturing are so high. If no one explains the reasons to you, then how can you know, allow me to explain? Moq stands for minimum order quantity. If you order less than this number, the factory will decline to work with you. The majority of factories in Vietnam are big like you see in this picture. Mass production factories only become profitable when they reach economies of scale. In this lesson, I will illustrate why quantities are so high. We will talk about MOQ for each step in the production process. If you have never been inside of a factory, then how can you know how they operate? If you have never seen this scale of factories, then how can you understand why they need large volume? Seeing is believing. The problem is that most startups never get a chance to see inside factories and therefore believe what they want to believe. They believe that there must be a factory that can do small quantity. While I support not giving up and holding on to your dream, we must be realistic. This lesson focuses on showing you what the reality is in countries like Vietnam, China, India, and Egypt. Now there are small factories and all of these countries. But the good small factories grow quickly into big factories and they stop accepting small orders. These good small factories will say yes, too small orders today. But as soon as they get a big profitable order, they disappear. The bad small factories stay small for a reason. And it's usually because the management is not good. You don't want to be working with them. So be cautious when any factory accepts to do small quantity. The bad small factories stay small and exemplify the stereotype of sweatshops. Do you want to be working with them? Can you manage them by e-mails? Only? In my personal experience here in Vietnam, even when I've worked with small sweatshops face-to-face, I struggle, I struggle with communication and quality control. They simply lack professionalism and are risky. Read together with me, sewing factory, MOQ, trim, factory, MOQ accessory factory, MOQ, fabric factory, MOQ printing factory, MOQ, and yarn factory MOQ. Did you know that indirectly, you are working with all of these factories? One concept that took me a while to wrap my head around is that we don't just work with one sewing factory when producing apparel in Vietnam. In fact, we work with all these different factories. Most people just focus on working with a sewing factory because that's who they talked to. They don't realize that the sewing factory is just one of many factories that are used in the apparel production process. It's important to understand that while you communicate with only one factory, that factory is actually working with multiple factories on your behalf. And each factory has their own IQs. By the way, you might ask, what is an accessory and what is a trim? Accessories are anything you throw away. The first time you put on a garment, like carton boxes, poly bags, hang tags, etc. Trims are things that you don't throw away, like care labels and woven labels. Here are some examples of factories and their MOQ is for all of the steps in apparel production. Here is a picture of a yarn spinning factory that's processing bales of raw cotton. Their MO cues are measured in tons. This is a spinning machine where cotton fibers, like what you saw in the previous slide, are spun into yarn. The output of our cones of yarn, which you can see here. The cones are then sold to knitting and weaving factories. Their MOQ is measured in kilograms. Kilograms of yarn. Here is a picture of a knitting factory. This is a circular knit machine which produces t-shirt fabric. Note the cones from the yarn factory that are on the racks. Operating, operating at 100% capacity. One of these machines uses about 120 cones, which equates to approximately 1000 kilograms of fabric, which is approximately 3,500 T-shirts. T-shirt, fat fabric MOQ is approximately one hundred, ten hundred kilograms, which is around 3,500 t-shirts. This is alone that makes woven fabric, like bed sheets, silk, and denim. You can see the yarn being fed in from the top. This machine makes around one hundred, ten hundred meters of fabric per cycle. This factory has over 100 looms and their MOQ is 2 thousand meters. With 2 thousand meters, you can make around 1800 pairs of jeans. Next is the dying factory. Here you are looking at diverts. I call them bathtubs of colored water. The grayish fabric you see stacked up in the crates is washed in the colored water multiple times to get the exact color that you asked for. These diverts hold one hundred, ten hundred kilograms of fabric at a time. One thousand kilograms of fabric can make around 3,500 t-shirts. There are diverts that are 200 kilograms and 500 kilograms in size. So there is some flexibility in fabric dyeing MOQ per color. The correct term would be MCQ. Minimum color quantity. Question, starting with a total of one hundred, ten hundred kilograms of grain fabric. If the factory had 500 kilogram diverts, then how many colors could you die? The answer is 2500 kilograms of fabric would be dyed one color and then 500 kilograms of fabric will be dyed another color. But the total is still 1000 kilograms. So the MOQ for fabric is one hundred, ten hundred kilograms, and the MCQ, in this case is 500 kilograms. The number of colors you can make depends on the die VAT sizes the fabric dyeing factory has. After the fabric is dyed, it has to be set. This is a fabric setting machine, is basically a big dryer. The fabric is stretched to the desired width and then heated to work out the wrinkles and create stability before it is rolled up and shipped to the sewing factory. These setting machines cannot be easily turned on and off. They need to run continuously to be efficient. Can you imagine the expense of buying, maintaining, and running this fabric setting machine? Then you have the printing factories. Here you see a screen printing factory with ten tables. Screen printing MOQ start around one hundred, ten hundred screen prints per artwork or accessory factories. Here you see a poly bag factory. Their MOQ is 2 thousand poly bags. This is a woven label machine. The MOQ is 5 thousand labels. They can do less than 5 thousand labels, but the price goes up significantly. For example, the price at 5 thousand labels might be $0.02. But for 1000 labels, the price will increase to ¢4.2, more than double. This is a 20 head embroidery machine. All 20 embroidery heads need to be used simultaneously to reach maximum efficiency. There are embroidery machines with as few as just one head. But can you imagine if the order is 1000 t-shirts with an embroidery? The embroidery technician would have to do 50 rounds of embroidery to finish 10000. Let's say each round took 15 minutes to set up, embroider and remove. That is 80 per hour. In an eight-hour working day, they can do 640 embroidery. This number crunching gives you a feel for the pace at which an embroidery factory operates. The bigger the machine, the more efficient. This is a ROW TO grow sublimation printing machine that does printing for duvet covers, blankets and sportswear. Each station has one color. Each station has one metal roller with artwork etched onto the surface of the roller. Paper is fed through the rollers where the different colors are printed onto the paper. One roller costs around $800 to make. That is for the etching of the roller with your design. You don't actually buy the roller. This printing technique is very fast and low cost, but requires a minimum of one hundred, ten hundred meters per artwork. Once the paper is printed, then the ink needs to be transferred to the fabric. This is step two of rotor gravure printing. You can see the paper fed in on top and fabric fed in on the bottom. Both paper and fabric are pressed together at high temperatures. The ink flashes to a gas and transfers from the paper into the synthetic fibers of the fabric. The MOQ for rotor gravure printing is 11000 meters and it's a two-step process. Bottom line is that whatever kind of printing or embroidery you want, each kind has different MOQ is an order of 1000 Chuck Taylors. One color is very different than an order of 10000 Chuck Taylors in four colors. A shoe factory might accept to go as low as 10000, all one color. But as soon as you asked for multiple colors, you don't meet the fabric MCQ and they refuse. You might say, I just want red, white, black, and blue. Surely those colors are available in stock fabric. While it is true, you can buy stock fabric and available colors, but most likely the exact blue or the exact read that you want is not available. Chances of you finding exactly what you want in stock fabric trims or accessories is very slim. It's important that you'd be upfront with the factory about your MOQ and your MCQ. You must meet both. Rookie mistake is to ask the MOQ, but not asked the MCQ. Most likely the MCQ will be the deal killer. For example, these three bags are the same design, but the color or prints are different. The factory will tell you their MOQ is one hundred, ten hundred, but fail to mention their MCQ. And you don't think to ask, you will think, great. I will make 1000 with three different colors when in fact the factory will need 1 thousand per color or per print. If you want to make three different prints, then you have to order 3 thousand, not 10000. Be sure to distinguish between MOQ and MCQ when talking, talking to a supplier for the first time. Plan for quantities equal to or greater than 1 thousand per style, per fabric per color, or print. Factories will politely disappear if you don't meet their MOQ is if you don't meet the MOQ of each factory in the supply chain, somebody loses money. Nobody wants to lose money. The factories won't lose money. They know exactly what they can and cannot do. If they calculate that they cannot earn a profit with your order due to minimum order constraints, they will simply disappear. There are manufacturing companies that will do small quantity like source studio dot CEO, French people design.com, and simply Saigon.com. These three companies are all based here in ** Chi Minh City. They are rare and they are agents, not factories. If they agree to work with you, then they will charge a premium so much that it might not make business sense. In the next lesson we will cover the third mistake I see people making the first time they manufactured in Vietnam. They try to manage design development and production by email. My advice is to have boots on the ground. Thanks for listening, Have a great day, and welcome to Vietnam. 7. Plan for Boots on the Ground: Have boots on the ground. The third mistake I see fashion startups making when they start to produce a parallel in Vietnam is trying to manage production by email. My advice is to have boots on the ground To do what I call sit on the factory. Your brand is like your baby. Would you ever leave your baby at home alone while you went out to see a movie? Parents hire babysitters to have peace of mind. My point is hire someone to take care of your brand in Vietnam to have peace of mind. This is a picture of a good factory based in the center of Vietnam from where I live in the south of Vietnam. It's a plane ride away. I never placed an order in this factory because I did not want to jump on a plane every time there was any issue that could not be easily resolved by email. Let's face it, factories don't really care about your brand the way you care. It's just another day at the office for them. If something isn't right, nine times out of ten, they will avoid addressing the issue. That issue may not be a big deal to them, but to you, the brand donor, it's a matter of life or death. I speak Vietnamese well, but still have to be super careful to understand and not be misunderstood. Do you know that when Vietnamese people say get to the outside of the road, it actually means get to the inside. This confuses the heck out of me. I'm trying to tell a taxi driver to get off the highway and onto the frontage road. All languages have nuances that can lead to confusion, which can lead to costly mistakes. Here is an example of a three-letter word in Vietnamese that has four different meanings. Jaw means to give. Jaw means doc, means market, and means to wait. Whether you are speaking the same language or a foreign language. Communication is the key to success. The best communication is face-to-face communication, regardless of what language you are speaking. Have you ever explained something to someone and you get the deer in the headlights look, they smile and nod as if they understand. But your sixth sense tells you they don't really understand. I have seen this happen many times in Vietnam. I will use myself as an example. First, if I'm speaking Vietnamese with a Vietnamese friend, I listened carefully to them and I think I understand. But in fact, I don't. My brain plays a trick on me and tells me to pretend and change the subject quickly. Basically, I feel stupid for not understanding and my natural instinct is to quickly move on to another topic. When this first happened to me, I was surprised and I could totally sympathize with the factory workers who pretended to understand me when speaking in English, only to come to find out that clearly they did not. I call this the deer in the headlights syndrome. Many times I speak Vietnamese, sorry. I speak English with workers in the factory because their English is better than my Vietnamese. And they tell me they understand, but it becomes glaringly obvious that they didn't understand later on down the road. This issue happens to us all regardless of our language abilities. How can we manage this problem of glazing over communications, miscommunications? Well, one thing is for sure it is easier working in person, then trying to catch them resolve communication problems by email. Why? Because in-person you can read their body language to detect signs of confusion. You can ask them to demonstrate understanding, either by having them repeat back to you the idea or having them demonstrate understanding using physical objects or motions. Have or higher boots on the ground to overcome the deer in the headlights syndrome. In Vietnam, culture consists of both the old and the new way of thinking and doing. Remember that many older Vietnamese people lived through a war. Their way of thinking and doing things is unique. Here are some cultural differences. To illustrate my point. As a child, I was taught to wait 30 minutes after you ate to jump back into swimming pool. Vietnamese let their children jump in the pool with food in their mouth. I was taught to always say please and thank you. Vietnamese people rarely say please and thank you. They show respect other ways. They believe that drinking ice water when you have a cold flu or sore throat is bad. This was news to me. These examples just remind us that beliefs and values are different around the world. The most important cultural difference that applies to manufacturing is that you are not supposed to shame anyone. You are supposed to save face at all costs. This means that if someone makes a mistake in the factory, they will not admit it and no one will call them out. Consequently, mistakes go unreported until it's glaringly obvious. At that point, a solution is implemented without figuring out the root cause and sometimes not implementing corrective measures to prevent it from happening again. When working in Vietnam, we must respect this concept of saving face and find ways to identify problems quickly and resolve them without blaming a person. Logistics needs to be monitored, monitored closely to ensure no delays. This map shows all the shipping vessels waiting to get into the ** Chi Minh City Bay where there are many shipping terminals. Traffic jams on the road happened in Vietnam due to road construction, which can lead to goods arriving late to the port and missing the boat. Goods can also be held up at customs if the paperwork is not perfect and thank you. Money has not been paid to the right people. You need someone on the ground anticipating these problems and ready 247 to fix. For example, logistics problems quickly. Quality control issues arise that must be solved quickly. Even with in-house QC and third-party QC inspections, mistakes happen. For example, the third party QC company you hire may reject so many garments that overall the QC inspection fails. And then there is a standoff between you and the factory. If you are not there to see with your own eyes just how bad or not so bad mistakes are, then how can you decide easily to cancel the whole shipment or not? Or you may request a color fastness test. And the color fastness is below standard because the dying factory used low quality inks. How will you easily resolve this problem by email? Often QC mistakes are not a deal killer, but someone needs to make the call. And if you have boots on the ground, it's easier to make the right call quickly. I often hear clients say, I don't need anyone on the ground because my products so basic and simple. If you are just ordering out of, out of a catalog and there are no changes being made to the product, then maybe it's not necessary to have boots on the ground. The problem is, is that the kind of manufacturing we're talking about is not ordering out of a catalog. Your designs are unique. I guarantee there will be modifications to the design throughout the production process. These modifications need to be handled quickly. The main reason you need boots on the ground is to manage change. Working directly with factories by email can be done if you are doing simple products like a coffee cup or a key chain, but not apparel. Here you see me with a baseball cap factory owner and his merchandiser. Even with me working on the ground. With them, we had to go through three rounds of samples and it took two months. This is after my clients spend six months going back and forth by email with another factory and no success. If you don't have boots on the ground, then you are at the mercy of the factory. The reality is that there are many delays that happen during the design development and sampling process. If you want to receive quickly, you need someone on the ground that is highly motivated. Motivated means paid. Well, what options do you have? You can manage everything by e-mail. You can hire a local staff. You can hire a local agent. You can live in Vietnam and work directly with factories. If you only have one simple style, then managing by email mike work, give it a try. Hiring local staff is possible, but hiring, but the hiring process will cost between 200 to $500 for advertising your job and receiving the CVs and interviewing the candidates. You will have to pay between 700 to $900 per month to attract an English-speaking staff that has garment merchandising experience and a strong network of factories. Hiring a local agent is an option, but they charge five to 9% and expect high volume orders. High volume means 5 thousand pieces per style and up. I recommend you live in Vietnam for a few months and work directly with the factories. The cost of living will be around 1 thousand to $2 thousand per month depending on your living standard. This is Chris offering. Working with a factory owner. He paid me to go and visit for factories in a day. He then spent eight months working in Vietnam with multiple factories to complete the design, development and production of his first products. Here he is discussing fabric options with merchandisers in another factory. I'm happy for him and proud of him because I helped him get started. And then he was the boots on the ground that led to his success. This is Erin, and here is his success story. He started with $50 thousand and a one-year timeframe in Vietnam. He wrote, I had a dream to build the world's only bike to work, backpack capable of transporting a business suit crease free. Within a year of starting out, I had done that. My prototypes were not that stylish, but they were functionally sound and could transport suits in my backpack without wrinkling my blazer and the dress pants. Here you see his first prototypes. He went on to write. I met with the backpack manufacturer regularly to review every aspect of the pack. We went over details like straps, connectors, zippers, zipper pulls, fabric trims, interior fabric and netting options. I went to the factory frequently to meet with the design team and then the production team. I was present during both production and shipping. Building a product for the first time requires a lot of face-to-face communication that cannot be replicated on Zoom or phone call or e-mail, have boots on the ground. And quote. In the next three lessons, we will go over the first three steps you need to take to get started manufacturing apparel in Vietnam. The first step is to fill in your quantity breakdown list. Thanks for listening and have a great day. Welcome to Vietnam. 8. Fill in your Quantity Breakdown List: Step number one to getting started with manufacturing apparel in Vietnam is to fill in your quantity breakdown list. When you first interact with the factory. What do you think is the most important topic to discuss? Is it design? Price or quantity? Again, my question for you is, what's more important? Design price or quantity? What should you discuss first when you first meet an apparel manufacturing factory in Vietnam, most of my clients want to discuss their garment design. They want the factory to confirm that the factory can produce their design. Factories, on the other hand, want to discuss quantities. Why is that? If your quantities are high enough, the factory will figure out how to make your design. Before you reach out to a factory, prepare your quantity breakdown list. I call it the cube. A cube l shows the factory the quantities per style, per fabric per color. Cube L gives the factory the big picture view of how easy or complicated your order will be. A cube gives the factory a clear visual of the business that you bring to the table. Their priority is profitability. Once they can smell the money, they will jump through hoops to get your design done right. Study this cube with me from left to right. Notice the description and style number column. Choose names for your different styles just for the sake of ease of communication and try not to use numbers. Notice the fabric description column. This just helps get the big picture of how many different fabrics there are in which styles use the same fabric. Notice the fabric color column. Same thing. It just gives the factory the big picture as to how many colors there are in total and which styles use the same color. Notice the artwork description column. So if you've got embroidery or prints or some other type of embellishment then listed here to help the factory understand the MOQ per print or accessory. Notice the sizing breakdown columns. This is here just for additional information. You can have any size breakdown you want, but it's just good to have it all in one place. Notice the total pieces column, which is probably the most important because it's, those are the numbers at the fact that we will look at. And then finally the HS code, which is just added benefit, beneficial information, as well as all the information at the bottom. Let's go over in more detail. Cube has many uses. You can use it as your quantity per style, per fabric, per color, per artwork quantity breakdown list. Think of it as your wish-list or your preferred purchase order request. You can use it to project how much profit you will make and how much profit the factory will make. The factory will use it to project how complicated your order is or is not. The factory can use it to predict if you will meet the fabric MOQ, the fabric minimum color quantity, MCQ, the printing MOQ, and the sewing MOQ. If this quantity breakdown list does not make sense and don't panic, pause the video, studied the quantity breakdown list, and you will grasp its importance. By all means, modify this list to meet your specific order. Scenario. Here you can focus on the pieces per fabric type. Can you see how four of the styles use the same fabric? Number 2356? Use 100% cocked in pKa, 190 GSM. But number one and number four are using recycled Pali interlock a 180 GSM. Number 14 will be combined to know if you can meet the fabric. Moq. Numbers 2356 will be combined to know if you can meet the fabric MOQ for the cotton fabric. Here you can see the quantity breakdown by Pantone color. Even though number 12 have the same color, the fabric will still be dyed separately because the dye chemical used for polyester are different than cotton. So do you see how the fabric color combines with the fabric description? To understand the simplicity or complexity of completing this order. Again, recycled polyester uses different dying chemicals, then 100% cotton. So even though the colors the same, they'll have to be dyed separately. And the factory will recognize this right away. To understand the complexity of this order. Here you can see the quantity per print. There are just two prints, so it seems easy. Mickey Mouse has a total of 975 prints, and Minnie Mouse has a total of 975 prints. Seems simple, right? Well, from an MOQ perspective, the screen printing MOQ is usually around 10000, meaning the printing MOQ should be okay. But again, comparing the artwork description to the fabric description and thinking about how the dye chemicals will react with the polyester versus the dye chemicals that will react with the cotton. There are different the dying chemicals that you have to use. Four, sorry, not dying, but screen printing. Screen printing also uses chemicals. The chemicals that you use when doing screen printing on polyester are different than the chemicals that you use when doing screen printing on cotton is not as simple as it might seem. But this quantity breakdown list shows it clearly. So the factory can understand exactly what they're expected to do and how complex it will be. Here you see the size breakdown. You can have any size breakdown you want. There is no minimum for quantity per size. Size breakdown usually follows a bell curve, meaning that L gets the most and then the quantities decrease equally on both sides of L. Or sometimes M for medium. If you know your size breakdown, then put it in the Cube CTL just to show that you are professional and prepared. Add as much additional information as you can to alert the factory of any special conditions. You need. Things like delivery date, preferred payment terms, destination, country and port, and any notes that you want to add. If you're not sure, just put in a question mark or write in to-be determined or need factories recommendation. Can you see how having this already can facilitate a very good first meeting? The HS code is used by the Customs and Border Protection agencies around the world to determine the amount of import tax you need to pay. If you don't know it, then contact the freight forwarding company or a customs broker to find out. You can ask the factory for their opinion, but you still need to confirm it yourself. If you're not sure what the HS codes are, then Google, what are HS codes? I cover HS codes later in this course. You can also just leave it blank and put a question mark or put TBD to be determined. I can't stress enough the importance of a cube for both you and the factory. It is packed full of valuable information. The more information you have, the easier it is for a factory to just to decide if they want to work with you or not. If they refuse you, then ask them what changes to the Cube CTL can you make so that they feel happy to accept your order. If your quantities are below their MOQ and MCQs, then the next logical question will be, how high do I have to go so that we can both earn a profit, execute this order. Getting to this point in the conversation during your first interaction with the factory is the holy grail. Clients often tell me, Chris, I need to know the price before I can tell you my quantities. This is a rookie belief. This is a classic. I am fresh off the plane response. Season professionals know their target price. As we discussed in the previous manufacturing math lesson, seasoned professionals know their quantities as well. Write down what quantities you wish for to appear professional and go from there. Fill in your quantity breakdown list as best you can given the information you have. At this moment. If you don't give your desired quantities because you want to know the price first. The factory is going to tell you, we can't give you a price until you tell us the quantity. It's a dead end and dead end tactic. And they are right. The manufacturing cost of 50 pieces is very different than 5 thousand pieces. So don't get caught in this trap. Be proactive and give the factory as much information as you can by filling in the quantity breakdown list from the get-go. When you meet the factory for the first time, have your Q BL ready. If you show up with no detailed information and ask for answers, it's like walking up to Starbucks cashier and not knowing what you want. The factory will smile at you and be thinking, okay, when you have all the exact details of what you want and how many you want, come and visit us again. Filling in the Cube helps everyone. It helps you and your team have clarity on your objectives. It helps the factory understand what you need produced and how simple or complicated your order will be. Factories want your business, but only if it makes business sense, they need accurate data to make an accurate assessment. In the next lesson, we will discuss step number two, getting started with manufacturing apparel in Vietnam, which is to make your tech packs. Thanks for listening, Have a great day and welcome to Vietnam. 9. Create your Tech Packs: How do we communicate our ideas across the ocean? If you live in New York City, you are having your garments produced in ** Chi Minh city. Then you will need to communicate your design ideas over a language and cultural divide thousands of miles away. All the details of your garment needs to be communicated, understood, disgust, and brought to life by a team of people from a different culture speaking a different language. How do we do it? With tech packs? A tech pack is a document that contains numbers, images, and text descriptions that a factory uses to produce what you want. Allow me to explain and show you. Do you have tech packs? If yes. Then are your tech packs 20% complete, 60% complete, or 90% complete? My point is that many people contact me and say they have their tech packs done. Upon inspecting the tech packs, I learned that the tech packs are not finished. How can you know if your tech packs are complete? If a factory reads your tech pack and they have no further questions, then your tech pack is complete. I'm going to show you what tech packs look like and give you an idea of what goes into them. First-time around. They're not easy to do. But like anything in life, the first time is the hardest. Tech packs are the key to success in the apparel industry. And they are an industry standard. So buckled down and accept the fact that you're gonna have to learn about tech packs and master them. Rookie mistake is to think that the factory will make the tech packs for you. They won't. And I will explain why later. The solution is to get professional help. But first, let's go a little deeper into why tech packs are important. Let's say you are doing quality control checks on the first day that production starts in the factory, you grab a garment off the sewing line to check the instructions on the care label or wrong. Is it a big problem? Who's at fault? You check the tech pack and see that the factory wrote exactly as it's written in the tech pack. In this case, whoever created detect packs is at fault. In this case, it'd be you, the brand owner. You have to accept or pay more to fix the problem. The factory followed the tech packs instructions correctly. Then you notice that this leaf length is ten centimeters. You check the measurement chart in the tech pack, and the measurement should be 12 centimeters. This is a big problem. The factory is clearly at fault. The factory did not follow the tech pack instructions. The factory needs to fix the problem at any cost. Tech packs come in handy when problems arise. It's easy to determine who is at fault and avoid. He said she said arguments that lead to nowhere. Tech packs help resolve problems, they help resolve misunderstandings. And if you do everything correctly, all these mistakes should be caught early on because they're written down and clearly easily seen. Imagine you have seven styles in your collection. Read together with me. Women's track suit, a woman's broad top, woman's leggings, men's t-shirt, a man's board short, man's hoodie, and a woman's hoodie. The question is, how many tech packs do you need? In this case? The answer is seven. The reason is that each style has different measurements. Let's say you want the track suit to have four colors. Do you need one tech pack for each color? The answer is no. All four colors share the same measurement chart. You only need one tech pack per track suit. You only need one. Tech pack per style. And this style is defined by its unique measurement chart. This is what a measurement page in a tech pack looks like. It is the most important page in a tech pack. The measurements are necessary for what's called the pattern, which determines the fit and fabric consumption. Both extremely important. Each size has unique measurements that must be perfect. Note that m for medium is in red. This denotes that the M is the sample size. Note the column called tolerance on the right TO TOL plus minus. This becomes very important during the quality control checks. Note the POM column on the left. Pom stands for point of measurement. The POM letters go together with the point of measurement diagram. The point of measurement diagram is very important when checking measurements during quality control checks if the point of measurements is not crystal-clear. In other words, open to interpretation, then the factory can take the liberty to measure in their favor in case a measurement is out of spec. This diagram shows clearly exactly where to measure for each measurement. There is no standard tech pack. For example, this tech pack has the bill of materials on the cover page, but the bill of materials can be on any page. The sketch you see here is called a flat sketch. And every tech pack has flat sketches. If you are trained to use Adobe Illustrator or good at drawing by hand, then flat sketches are easy to do. Otherwise you will have to hire someone to do your flat sketches. Note the column on the right called supplier in the bill of materials. This is very helpful because if you have already sourced a supplier for the individual components in the BOM, then you can clearly list their name to help out the factory. If you need help from the factory, then add the words need factory to source. This helps during the initial meeting. When you go over the tech pack and you let them know what you've already sourced and what you need help with. This visual bill of materials is not necessary. You don't see it all the time. But it helps if you have images of the exact or similar trims, accessories, and fabric that you want. The more information, the better. This is a call-outs page. Call-outs help bring attention to any details. You consider very important and required detailed explanation. The construction page you see here lists technical details related to the type of stitches, their width, and stitches per inch. Sea in the far-right stands for seam allowance, is the distance between the edge of the fabric and the line of the stitching. This page requires deep technical knowledge, which is why I recommend you hire a professional. If you want to make great tech packs. If you don't specify this information than the factory will choose. Most of the time, the factory will make the right choice. But in case they don't, then can you complain? All these jackets have the same measurements, so they're part of one tech pack. The only difference is the color variations. Note the Pantone color codes. Pantone color codes is the industry standard way to define the exact color that you want. Pantone has a website where you can see all the colors with their respective codes. Include Pantone color codes in your tech pack. Every time you need to specify a color, not just for fabric, but for trims and accessories as well. Branding labels, size labels, and care labels need to be described in detail. The actual artwork will be provided separately by e-mail by you. Do you see the note with an asterisk under the care label description? Please use stock label. If you're not sure and are willing to use stock labels or whatever the factory chooses, then specify in writing as you see here, accessories are anything that gets thrown in the trash when you unpack and put on the garment for the first time. Things like hang tags, poly bags, carton boxes, silica gel bags, tissue paper, or cardboard inserts. All of these accessories need to be described or Illustrated or else the factory will guess. Factories they don't like to guess because then they are liable. Specify the dimensions, the thickness, artwork, placement, etc. The more information the better. If you're not sure about the details, then again, state clearly need factories help. This page illustrates and describes the poly bag. If there is print, then you need to provide the exact color using Pantone numbers and send the artwork separately by email. Poly bags are either P P or P. P, P is polypropylene and PE is polyethylene. Pp is more commonly used because it is 100% see-through. Whereas PE is a little bit cloudy. If you don't care how the garment is folded, then forget about this page. But if you have specific folding procedures, then specify it in the tech pack, like you see here. What is the value of a tech pack? With a tech pack in hand? You say to the factory, here's what we want. Please have a look at it. If there is anything not clear, please ask us. We will work with you until you understand it. Then quota surprise and make us a sample, please. You can e-mail a tech pack to multiple factories and ask for a price quote. You will be comparing apples to apples when you get prices back. If you don't have tech packs, then basically you have to go and visit the factory multiple times to answer their questions and get all the details right. Tech packs are an extremely valuable communication tool. Here's what a backpack Tech Pack looks like. Note the size of the zipper in the zipper call-out box is in the upper left-hand corner. You can see material. And then size number five. Zipper sizes come in. Number three sides up to number 12 size. The higher the number, the bigger the zipper teeth. If you don't know exactly what kind of zipper you need, then get help from a professional. Size. Number five is a normal fashion jacket, zip or size. But for example, sturdy backpack might use zipper size number eight. Notice the webbing on the right side. In fact, there are many different kinds of webbing, different fiber compositions and different weaving structures, and of course, different sizes and thicknesses. If you know, it's best to specify as many details as possible. If not, then write clearly need factory recommendation. Notice that they call out the care label, which is great. But what is written on the care label, it is your responsibility to specify the care instructions. It could be a legal matter in the future. If a customer returns your backpack because of some fault, and it turns out they didn't follow the care label instructions. In fact, you're not liable. But that all depends on what's written on the care instruction label. The factory will not and should not write the care instructions for your backpack or garment. Is this page easy to understand? Is there a better way to present this detailed information? Here is a hat tech pack. In fact, this is a hat illustration. Not really a tech pack. Notice that it is missing the measurement chart. It specifies gray, orange, and black color, but it does not give the exact Pantone color. There are more than ten shades of gray. For example. Factories can work with this design guide sheet, but the factory will be a bit frustrated and have to collect all the missing detailed information separately with you by email or some other means which waste time for both you and the factory. So my advice is have all the detailed information. Ready in advance, especially the measurements. And if you just don't know, then clearly state, I need help with this and leave a space in the tech pack where that information can be inserted. For future, for version two, version three, etc. Basically the tech pack is like a to-do list. These are all the things that we need to talk about. These are all the points of information that have yet to be determined and we need help filling them in. You discuss, you fill it in. Tech packs, updated, boom, done, check. Move on to the next thing. This is a line sheet. It is not a tech pack. Don't make the rookie mistake thinking that this line sheet can replace a tech pack. This is also a line sheet and not a tech pack. If someone came to me with this and asked me to work with the factory, then I would refuse. Tech pack still need to be made. And they take time and money. The customer might say, oh, our businesses growing and we will order 5 thousand pieces per artwork. Well, if their business is really that big, then wouldn't it make business sense to hire professional designer or garment technician to do the tech packs correctly. Think about the math. These sets will cost $10 each and they will sell them for say, $20. They double their money. 5 thousand units per design times four designs. At $10 profit per garment is $200 thousand gross profit. Assuming they sell everything. Do you think they can afford to pay to have their tech packs done in advance by an experienced garment technician? I think so. I think it's a smart idea. This is another example of more of a design guide. It's not a tech pack. It's a good start. But look at the measurement chart. The ranges in centimeters are big. This is unprofessional and will make you look like a rookie. In this case, they're broad cups and Brock cups have many options. This tech pack does not specify the details of the Brock cups. This is more of a design concept sheet which you could give to a professional Tech Packer to begin the design and development phase, which includes making tech packs. At the end. We'll factories make the tech packs for you. Absolutely not. Y-naught. Once you have the tech pack in your hand, then you can e-mail the tech pack to any factory in the world to ask for a counter quote and sample, which is extremely valuable. Factories must make their own internal tech packs, but they will not give them to you. Factories are afraid that you will take their tech pack and go to the factory down the street to get a better price. Now, do you see the value of a tech pack? Making tech packs is something factories don't offer as a service. Imagine you are making 1 thousand t-shirts. Your retail price is $25. You're make price or your landed duty paid price is $5. Potentially you could grow $20 per t-shirt. That's $20 thousand. Does it make good business sense to spend $1000 to get your tech packs done? Well. Also consider that the next time you want to produce a similar t-shirt, the tech pack can be reused. So how much does it take pack cost. Here you can see one tech pack freelancer website. Her name is Belinda, and our website and company is called tech packs dot CEO. She's offering a basic tech pack for $625 and an advanced tech pack for $1295. I think her price is very reasonable. Especially if you get to work with her face-to-face. If her prices are too high for you, then you can hire freelancers. In India and Romania and Vietnam, that will do tech packs for much less. But if you're not in those countries and you don't have the chance to work face to face with the tech Packers. The experience and the value that you get out of paying for your tech packs goes down significantly. My advice is to find the local tech packer and work with them face-to-face. Because as you're doing your tech packs, you're going to actually be making changes to your design. And the tech pack freelancer will ask you intelligent questions and give you knowledge about different kinds of options, different kinds of fabrics, different kinds of buttons, different kinds of poly bags, different kinds of everything. That is of extreme value. Basically, the tech pack freelancer can help you with design and development as well as make your tech pack. But if you don't want to spend a lot of money, then try out the cheap ones first and see how far you get. Then send those tech packs to the factory and see how many questions the factory does or does not ask you. Once they get your tech pack. If they don't ask you any questions, well then the tech pack is good. But if the factory comes back with tons of questions, it means that the tech pack is not complete. Every major city in the world has freelancers trained in garment technology. They know how to make a terrible apparel tech packs and help you pick and choose all the options that you want. Login to Google and search for. Baseball hat designer or backpack designer or leather bag designer. Contact them and ask for help with design and development. Specifically ask them to create your tech packs for you. Our tech packs legal documents. I like to think of them as legal documents, but they're not they are not technically legal documents. I like to think of them as contracts. They are contracts between you and the factory. You are basically saying, this is what I want. All the information is in one place. Once production starts and problems arise, and they always do. The tech pack is the reference document for both sides. If there is a problem and it is serious, then refer back to the tech pack. Tech packs will help you find the root cause. No, clearly who is responsible and act as a starting point to negotiate a solution and move forward. In the next lesson, we will go over your quality control checklist. My advice is to prepare your quality control checklist in advance before you start your journey, present yourself as professional. Thanks for listening. Have a great day and welcome to Vietnam. 10. Prepare your QC Check List: Prepare your quality control checklist. Who is responsible for quality control? It's true that the factory is ultimately responsible for quality control. But I recommend you be proactive. Create a quality control checklist. The factory knows what you expect to be checked. Then let the factory know what your quality control standards are. In this lesson, I will show you how to make a basic quality control checklist and explain some common standards used in the apparel manufacturing business in Vietnam. First, if you are new to manufacturing, then you may not know that quality control is an industry and a science. There are people who dedicate their lives to quality control. And each year, millions of dollars are spent on executing quality control. What I cover in this lesson is a simple practical guide to help you get started with managing quality control for apparel production in Vietnam. There is no standard quality control checklist. What you see here is a bill of materials from a tech pack. I recommend you create your checklist based on your bill of materials. If you want to keep it super simple than just check each item on the BOM and give it either a pass or fail. Do a visual inspection of each item on your BOM to check the quantity, appearance, cleanliness, and durability. Here is an example of a basic quality control checklist for a basic garment. You will need one QC checklist for each sample you check, you will need a separate checklist for pre-production, inline, and final inspections if you choose to do all three. These are very basic checks that can help you identify problems early on and fix them before, during and after production. When is the best time to do quality control check? The best time to do a quality control inspection is inline, especially the first or second day the production starts. If you find any major faults, then order them to stop production until the fault is fixed. What if you can't be there for the first day of production? Are there any reliable third-party QC inspection companies that you can hire? Yes. There is V trust pro QC and Asia quality focus, just to name a few. If you search online, you will find many. I recommend you hire a third party QC company to do at least one inline inspection, which will cost you around 200 to $300 per mandate. Keep in mind that one QC inspector can only check around a 120 garments in an eight hour period. Here you can see V trusts pricing clearly as listed on their website. How many garments should they check? Is it realistic to do a 100% inspection of say, 10000 garments? Not really. Because you would have to pay for almost eight man days, which would be around $300 times eight, which is $2400. To find out how many we must check, we use an AQL standard, or a standard called AQL. Aql stands for acceptable quality limit. This system tells you how many garments you need to inspect in order to get statistically significant findings. At the end of this lesson, there is a ten minute video that explains AQL very well. It's mandatory. You must watch it. If you Google how to use the AQL table for products sampling and inspection on Google. You will find this video and I highly recommend it. And it's also attached to the course. Third-party QC inspectors will have their own QC checklist, but they will need a measurement chart and a point of measurement diagram provided to them by you. If you do the QC checks yourself, then you will also need these documents to do a proper QC check. Make sure you know clearly where you should be measuring and make sure you know what the acceptable tolerances are for each measurement. Now you have a basic idea how to do your quality control checks. Let's talk about standards. We talked about the AQL standard, which tells you how many garments to check. There are two other standards worth noting. The first is the four-point fabric inspection standard. Here you see a fabric inspection machine. The question is, how many defects or penalty points will result in the failure of the fabric. Meaning you, you reject the fabric. If there are more than 40 penalty points per 100 square yards, then the fabric is rejected. Defect points are given according to the chart you see here. Look at it for a minute. Let the factory know that you want to follow the four-point fabric inspection standard. Be sure to ask them to provide you with the fabric inspection report. The typical timeline is that the fabric will arrive at the factory and after they unloaded from the truck, they will do a fabric inspection. And it's during that time that they will create the fabric inspection report. So as soon as you hear that the fabric has arrived at the factory, start asking for the fabric inspection report. Another standard to follow is the color fastness standard. It is measured on a scale of one to five. If the test results for color fastness is a one, then the color will bleed a lot. One is very bad for color fastness. If the test result for color fastness is five, then there will be no color bleeding. Achieving a color fastness of four is difficult, but can be achieved if the dying factory uses good-quality chemicals and smart procedures. I recommend you set the standard for color fastness at four and wait for the response from the factory you are working with. If they agree to four, then great. If not, ask them what level of color fastness they can guarantee. Ask them when the color fastness tests will be done, who will pay for them? And will they provide the color fastness test to you for approval? Qc is not cheap given that the typical rate is $268 per mandate. And one man, they can check a, a 120 garments. Then the cost per garment is $2.23. If the total cost of the t-shirt is $5, then $2.23 is relatively expensive. Budget accordingly, for quality control, remember to watch the AQL video that's part of this course. This concludes the Getting Started with manufacturing apparel in Vietnam step-by-step course. Thanks for listening, Have a great day and welcome to Vietnam.