Guide to finding the right clothing manufacturers in China

Learn how to find the right partners in affordable outsourcing destinations. 

Looking to design your own T-shirt or launch a knitwear collection? Outsourcing to China or other low cost countries could be your only option.

In this article, I explain what you need to know when selecting a clothing manufacturer, substance regulations, material quality and managing the product development and production process.

Regardless of whether you are an apparel start-up looking to try out a new product line, or you consider yourself the next Karl Lagerfeld, this article is packed with actionable advice for you. But first, I will explain why buying wholesale clothing from China is rarely an option.

Buying wholesale clothing from China

The Minimum Order Quantity (MOQ) of clothing and textile items is often 300 to 500 pieces per design. That translates into a major investment, assuming that you want to launch an entire collection. Many importers assume that the solution to this is skipping manufacturing to purchase off shelf clothing from wholesalers.

Of course, there are clothing and textile wholesalers in China. In fact, there are tens of thousands of them. However, these wholesalers, trade items manufactured for the Chinese market. Take a look at Taobao.com (China’s Ebay) and see for yourself. You can get a T-shirt for 2 dollars and a pair of jeans for the price of a Big Mac meal. But, China is not a magic land where basic economics don’t apply. In other words, you do get what you pay for.

In fact, you might get a bit more than you really want. At least in terms of regulated substances, such as Formaldehyde and AZO-colors. China’s substance regulations are more lax than those in the west. Thus, buying wholesale clothing from China is rarely (if ever) an option, unless you are willing to risk having your items seized by customs – or face a forced recall.

Important factors when selecting a clothing and textile factory

Not all clothing and textiles manufacturers are equal. Making a random factory selection online, without verifying that the supplier is able to reach your quality requirements, is likely to end up in disaster. Below follows an introduction to the three main factors that really matter, when selecting clothing manufacturers in China.

#1: Substance control and compliance with foreign textile regulations

Clothing textiles are regulated in most countries, including the United States, Europe and Australia. Most applicable safety standards, such as REACH (Europe) and FHSA (United States) regulate substances, such as formaldehyde, AZO-colors and asbestos. Most Chinese manufacturers, especially the smaller ones, are not aware of the substance content in their textiles.

It’s a deeply rooted issue that goes way beyond the manufacturer. All clothing manufacturers purchase fabrics and components from sub-contractors. The number of sub-contractors can range from two or three, to more than one hundred. Ensuring that no non-compliant fabric slips through requires the supplier to test a large number of samples, which most small factories consider too expensive and time consuming.

#2: Textiles labeling requirements

Clothing and textile regulations are not only limited to substances, but also product and packaging labeling. These labeling requirements vary greatly between different countries. However, most countries require labeling to cover Country of Origin (Made in China), textile fiber content and washing instructions.

However, a supplier cannot really be compliant or non-compliant with labeling requirements. In fact, it’s your job to design the textile label, and verify that it’s compliant with applicable regulations in your country. The supplier’s job is to print it. That said, they must be able to provide you with information about the textile fiber content and washing instructions.

#3: Fabric quality

Good suppliers provide high quality fabrics and bad suppliers provide low quality fabrics. But, it’s not that simple. A couple of years ago I learnt that myself, the hard way.

In 2011, we were tasked with managing the product development process of a new polo shirt collection for a European brand. They had already selected a new supplier in the southern Fujian province to manufacture their new designs. It was a good supplier. Clean facility, long history, plenty of capital, modern machinery and a strict quality management system.

The client received the samples and testing began. A few weeks of usage and washing later, it was clear that the material quality was far below the clients' expectations. While they wanted to match brands like GANT and Ralph Lauren in terms of quality, this sample would go straight to an outlet.

Obviously, the client was upset about this, and we submitted a complaint to the supplier. They made another batch of samples. But the result was the same. This was when we realized that this may be a reliable supplier, yet unable to match our buyers quality requirements. It turned out that they were indeed specialized in making low end apparel, and pretty good at it too!

Before you get started, you need to get your fabric specifications in order. Never assume that a Chinese clothing and textiles manufacturer is specialized in making items matching your quality requirements, regardless of their technical qualifications.

Product development process

When you have selected a few suppliers (not only one, as explained further down in this article) it’s time to put them to the test. Keep reading, and find out how to manage the clothing product development and production process:

Step #1: Design drafting, material selection and product specifications

Chinese manufacturers are entirely accustomed to producing items according to buyer specifications. While some suppliers offer design services, they will certainly not help someone to design a new collection based on a random inquiry on an e-commerce platforms like Alibaba.

Before you even bother to contact manufacturers, you need to get your specifications in order. These include, but are not limited to, the following:

• Design drafts
• Design elements (e.g. collar)
• Dimensions
• Fabric type (e.g. 96% cotton and 4% spandex)
• Fabric weight (e.g. 120 gsm)
• Printing or embroidery (e.g. screenprint)
• Pantone colors
• Buttons (design, material)
• Seams
• Textile label (design files and dimensions)
• Compliance requirements (e.g. AZO-free colors)

You may also complement a product specification with physical product samples, in case you intend to replicate a certain color, material or design elements of an existing product. However, certain components, such as buttons, are better left open until you know what the supplier has to offer.

In case you fail to provide sufficient product specifications, you are likely to receive items of very poor quality. Misunderstandings occur easier than you could possibly imagine, and there is no universal definition of what “good quality” is. Nothing should be left out of your product specification.

Step #2: Sample development

This is when it gets interesting, but act with caution. First of all, it’s way too early to make a final supplier selection at this stage. Instead, you shall select at least three or four suppliers that produce clothing samples simultaneously.

In my experience, roughly 50% of the suppliers fail to manufacture satisfying samples. They might lack the precision to get the seams straight, provide low quality material or prove that they don’t really care that much about following your design requirements.

Samples take time to develop, and often require a few revisions. All of a sudden three months have passed. If you have made a final supplier selection too early, you might need to start all over again. That’s why it’s critical to keep several supplier options at hand at this stage. Thereby, you can simply ditch the supplier failing to produce satisfying samples, and move on with those that succeed. Yes, it costs a bit extra to buy samples from four suppliers, rather than only one. But, considering the time and money you will save, it’s well worth it.

Step #3: Compliance testing

Previous compliance means that a supplier can prove that they are able to ensure compliance. While that is a key qualification requirement, it’s not a guarantee for future compliance. Thus, you shall submit material samples for compliance testing, before mass production begins.

But, this is also when it gets really complicated. Fabrics are purchased from sub-contractors, and suppliers rarely keep them in stock. The fabric samples that are available during sample production may not be available by the time you place your order. Even if the fabric used for mass production is visually identical, it may come in another batch (thus it may contain other chemicals) or be from a completely different sub-contractor.

In a worst case scenario, this means that you could end up with clothing made of non-compliant fabrics, even though the pre-production fabrics passed compliance testing. However, despite this risk pre-production fabric testing is critical. One way to minimize the risk further is to have fabric samples compliance tested as soon as the batch used for your items arrives in the supplier warehouse, but before mass production begins. That way you can at least avoid a situation where you are left with an entire batch of non-compliant apparel. Sounds complicated? Not so much, if you follow the process below:

1. Select fabrics and confirm applicable substance regulations
2. Ask your supplier if the fabric used for mass production originates from the same batch and/or from the same sub-contractor
3. Collect and submit pre-production reference fabric samples to the test laboratory
4. Supplier begins mass production and order fabrics from one or more subcontractors
5. Collect and submit batch sample reference fabrics to the test laboratory
6. If compliant: approve production

As one material, and sometimes color, requires a separate compliance test, costs increase if you use many different fabrics and colors. If you are on a small budget, try to limit the number of different fabrics used in your apparel.

Step #4: Sales contract

Before you pay the deposit and production begins, a Sales Agreement shall be signed by the clothing manufacturer. The main purpose of the sales contract is not to get prepared for future disputes, but to prevent them.

First of all, it shall prevent misunderstandings. Thus, it shall include product specifications, design drafts, material specifications and color samples. You may also attach physical samples, for the supplier to sign and stamp.

However, these specifications may be useless unless you put pressure on the supplier to actually comply. This can only be achieved if you make the supplier understand that you will verify compliance, and that you have a bargaining chip at hand, in case they wouldn’t.

In order to verify compliance, you need to follow up with Quality Inspection. I’ll get back to that in a bit. The payment is also critical. If you pay a supplier 100% in advance, they no longer have an incentive to remake or repair defective items, in case the quality inspection fails. This is why the final balance payment shall be withheld until the quality is verified.

Step #5: Quality control

Manufacturing is not a science. Quality issues are certain to occur, to a varying degree. They can’t be completely eliminated, but they can be managed and reduced to a degree that they don’t affect the viability of your business.

Forget about returning defective items to China. Low cost manufacturing is cheap for a reason. Instead, you must verify that your clothing reaches your quality requirements before it’s packed and shipped. Thus, a Quality Inspection shall be executed in the manufacturer’s facility, after production – but before shipment.

There are a number of defects that may occur when manufacturing clothing. Below follows a list of defects I have stumbled upon:

• Poor seams (e.g. not straight, loose threads)
• Discoloration
• Skewed embroidery
• Incorrect dimensions
• Loose buttons and zippers
• Dust and dirt

However, certain quality issues cannot be detected during a single factory inspection. For example, poor quality fabrics may lose fitting, only after a few washes. This is why extensive sample testing, and actual usage, is critical, before production begins. 

This article is re-published with permission from Frontier's content partner, ChinaImportal, an e-commerce platform that assists businesses looking to import products from China.

See the original article here.

Private equity investment in French-speaking Africa

Paris-based law firm, STC Partners, assists French and foreign investment funds in managing transactions in listed and unlisted companies. In this interview executives at the firm Laurence Elong-Mbassi (Attorney at Law - Of Counsel, Head of the Africa Tax and Legal Practice) and Anne-Sophie Hébras (Attorney at Law - Of Counsel), talk about how reform initiatives in certain countries in West and Central Africa are helping to make investing more flexible and efficient for private equity investors.

How has STC Partners helped private equity fund managers invest in French-speaking Africa?

We have assisted private equity firms in many French-speaking countries in West and Central Africa, and in the Maghreb, notably Morocco and Tunisia, as well as in some English-speaking African countries, such as Nigeria. We have helped teams throughout the deal life-cycle of the investment fund by advising on the legal and tax structuring of the fund itself, drafting and negotiating the fund documents, structuring transactions between the general partner and the advisory and other associated companies, and in performing legal and tax due diligence for investment and exit purposes. Our affiliate, C2A, supports us through their presence in several countries of West and Central Africa, including Côte d’Ivoire, Guinea, Cameroon, Congo and Gabon.

In your experience, how has the Organisation for the Harmonisation of Business Law in Africa (OHADA) benefitted private equity fund managers and investors operating in the OHADA* region?

Firstly, the OHADA Uniform Act relating to commercial companies and economic interest groups (the Uniform Act) benefits private equity investors focused on this region by introducing a common form of law for these groups across OHADA treaty signatories. This greatly enhances efficiency in structuring and administration, and reduces the relative risk when investing in the different countries of the OHADA area.

The Uniform Act has recently been amended (effective 5 May 2014) and introduced greater flexibility in the management of the legal structures available to investors and funds to help secure their operations in the OHADA area. One of the main innovations was the introduction of the “Société par actions simplifiée”, or simplified joint stock company, which allows shareholders greater freedom in structuring their partnership and portfolio company investments. Additionally, the revised Uniform Act brought major innovations relating to securities, which greatly benefit private equity funds. Some examples include the ability to: (i) create preferred shares which can be issued without voting rights, with double voting rights, with suspension of voting rights for a specified period of time, or with a preferred dividend and so forth; and (ii) provide access to capital through the creation of securities or entitling the allocation of debt instruments, which opens up greater funding opportunities, in addition to common equity, for firms incorporated in the OHADA area.

With the increased global focus on Africa, what are some of the issues managers and investors should be aware of when looking to invest for the first time?

One of the main issues faced by clients investing in Africa is the efficient transfer of the proceeds of their investments, in particular the proceeds of sales. There is typically no issue when transfers take place between the Euro zone and the CFA Franc zone. Moreover, as the latter is indexed to the Euro at a fixed rate, there is absolutely no exchange rate risk. Things can prove to be more complicated in North African countries which have foreign exchange control regulations that are much more restrictive than those found in the CFA Franc zone. For other types of transfers, such as dividends and management fees, one must comply with legislation in force (e.g. domiciling service contracts, holding shareholders meetings to approve annual accounts and allocating profits within the time limits prescribed by law).

From a tax perspective, capital gains tax arising from sales of interests in portfolio companies can be an issue, but we find in this respect that the strengthening of the double tax treaties network of African French-speaking countries has allowed a gradual improvement in the profitability of foreign investments by reducing cases of double taxation (wide double tax treaties network with France, and expanding with Mauritius and Morocco).

How have you seen the tax environments in French-speaking Africa change, and are they becoming more efficient from a private sector investment perspective?

In general, we have noticed that, although the tax rules are evolving towards a strengthening of anti-abuse and anti-tax avoidance systems, local tax authorities are becoming more and more aware of international practices. This helps enormously to facilitate effective discussions between the authorities and our clients. In addition, several countries have formalised the possibility for taxpayers to request a tax ruling to validate the regime applicable to a given scheme. While in some cases it is too early to truly appreciate the positive impact this may have due to some practical implementation issues, it certainly contributes to helping secure transactions made by foreign and local investors. 

In relation to private equity in particular, we are seeing tax rules introduced in support of private investment, notably under the lead of the West African Economic and Monetary Union (WAEMU), which has issued several directives which harmonise the taxation applicable to securities among WAEMU members and the taxation applicable to closed-end investment companies within the WAEMU. 

These rules have been implemented in various countries, notably Senegal, Benin and Togo, and provide favourable tax regimes (e.g. exemptions from corporate income tax, exemption from tax on capital gains derived from the sale of securities) for listed and unlisted investments to stimulate regional financial stock markets and offer alternative ways of financing the economy. We believe that this type of legislation, combined with the recent Uniform Act developments, will encourage the emergence of additional local investment funds.

*OHADA is a system of business laws and implementing institutions adopted by 17 countries in West and Central Africa. It is the French acronym for "Organisation pour l'Harmonisation en Afrique du Droit des Affaires", which translates into English as "Organisation for the Harmonization of Business Law in Africa".

Interview sourced from Frontier's content partner, African Venture Capital and Private Equity Association (AVCA)

Top 5 food markets in sub-Saharan Africa

By Kurt Davis

The food sector is the focus of investors who are seeking to capture the opportunity of a rising middle class in Africa. 

They were lost in Luanda, Angola's bustling capital, until they found the McDonalds. Being American in a familiar place in a foreign country is home until you see the price for the burger meal: $14. 

This being Africa means there must be a local twist, says the American tourist John, and sometimes the twist is the price.

Investing in the sub-Saharan African market is the right move at the right time. Call it the “last frontier” or the “last big opportunity.” Either way, the numbers speak to great prospects.

The International Monetary Fund’s (IMF) latest Regional Economic Outlook for sub-Saharan Africa projects GDP growth to reach 5.5% in 2014 from around 5% in 2013. The accelerating growth is expected to be buoyed by large investments in infrastructure and mining, maturing investments in transport and telecommunications, and a rebound in agricultural output.

The sustained boom creates more consumers. Global management consulting firm Mckinsey & Company projects that more than half of African households will have discretionary income by 2020, rising to 130 million households from 85 million today. Restaurants want a piece of the pie.

Kentucky Fried Chicken (KFC) and McDonalds are the big first movers. Other American brands, including Burger King and Pizza Hut, are salivating at the growing opportunity. But franchises are not the only players as local brands, including South Africa's Debonairs Pizza and Nando’s, continue to expand across the region.

Here are the top 5 countries for restaurant expansion in sub-Saharan Africa:

Nigeria

It has a Johnny Rockets! But the entrance of lesser known brands Johnny Rockets and Dominos underline two big things about Nigeria: (1) its approximate 170 million-plus population (biggest in sub-Saharan Africa) and (2) its GDP, which stands north of US$520-billion - the largest in sub-Saharan Africa.

Nigeria’s population is likely to overtake the United States by 2045, according to the United Nations, and its GDP is likely to surpass US$1.6-trillion by 2030 with a yearly growth rate of 7.1%, propelling it into the top 20 for economies by GDP. In a similar time frame, global management consulting firm Accenture in a recent report projects consumer spending to grow to $167-billion by 2020.

Tapping into this market is obviously imperative to gaining market share in sub-Saharan Africa. But creativity is necessary – for example, throw in jollof rice or seafood okra to excite the local palate. Nigerian tastes span local delights to British adoptions and American transformations.

Kenya

Kenya is a favored destination for investment in Africa. It is sub-Saharan Africa’s sixth largest economy and population. And its birthrate remains in the top quartile globally. The IMF projects the Kenyan economy to grow 5% in both 2014 and 2015, compared to 4.7% in 2013. All this being said, the underlining numbers in Kenya indicate more spending consumers in one of Africa’s biggest food-loving countries.

Accenture projects consumer spending to grow to US$38-billion by 2020. back in 2012, an Africa-focused private equity firm invested in Nairobi Java House, a local Kenyan coffee house and restaurant, signifying a new focus of investment firms. A large expansion by Kentucky Fried Chicken (KFC) only further underlines the opportunity. And Subway has entered and likely confronting Subzone, a healthy eating alternative in Nairobi that has a similar look and appeal of Subway.

The Kenyan palate, to a distance observer, initially seems fulfilled by the simple presence of meat – ideally chicken. But locals will suggest that you have only tapped the surface if you leave with that belief. Asian influence, British and American influence (from Kenyans studying abroad), and a well-travelled middle class undoubtedly implies greater diversification.

South Africa

The former “largest economy” in sub-Saharan Africa is still trying to get its growth back on track. The IMF projects the economy to grow 2% in 2014, only barely surpassing the 1.9% growth in 2013. Weaker economic numbers worry investors and politicians alike. Yet consumer spending remains strong with untapped potential.

Consumer spending, projected at US$315-billion in 2020 by Accenture, will be approximately double that of Nigeria. The South African palate is nuanced accompanied by larger pockets. Local brands, including Spur and Ocean Basket, compete strongly against Western brands inside (and outside) South Africa. It is also easy to find a McDonalds and a KFC in country.

Skeptics routinely suggest that the food service business is approaching saturation in South Africa. Yet all the numbers indicate growing competition, but nowhere near any level where investors cannot snag great returns.

Uganda and Tanzania

This grouping will not excite Tanzanians and Ugandans – the countries are definitely different in many ways. But they do have a lot in common too. As the 5th and 7th most populated countries in sub-Saharan Africa, Tanzania and Uganda already possess large consumer bases. This base will only expand with birthrates in the top 20 globally – Uganda at the 3rd highest and Tanzania is the 18th highest.

Tanzania and Uganda embody the East Africa boom. Underpinned by recent natural resource discoveries, both countries possess fast-growing economies. The IMF projects the Tanzanian economy to grow 7% in 2014, compared to 6% in 2013 while the Ugandan economy grows at 6.25% in 2014, compared to 5.75% in 2013. As commercialisation of these resources take hold and pipeline projects mature, these growth figures may very much be higher in a few years.

If not for the supply chain challenges, many investors think these two countries would rise to the top as investment destinations for the food service industry. Yet a lack of commercial quality inputs, ranging from potatoes typically for French fries to meats (i.e. chicken and beef) stymie operators and create deficiencies throughout the value chain. Focused efforts on agriculture from central governments and local investors will continue to improve the industry’s prospects.

Honorable mention: Angola and Ethiopia

This article is re-published with permission from Frontier's content partner, Ventures Africa.

Ventures Africa chronicles business and investment news, and the success stories of African entrepreneurs and business leaders.

How to start an importing business

Small businesses worldwide are increasingly getting involved in the trillion-dollar importing and exporting sector. 

With the rising demand for products by consumers in Africa, now is the right time to consider establishing an importing business.

Get our handy guide for start-up importers and access essential advice on how you can establish your own importing business and become successful in the lucrative international trade.

Click on this link for more

Top property markets in Africa

Andrew Golding, the chief executive of Pam Golding Properties, tells Frontier why he is optimistic about the property sector in Africa.

Which African countries have the best opportunity for property investors?

Each African country has its own specific dynamics and opportunities. Pam Golding operates in all the SADC countries, and in Kenya and Uganda in East Africa. 

Mozambique is 'the flavour of the month' at the moment, due to its booming resources sector. There is a lot of activity across all the segments of the property sector, with cranes dominating the skyline of Maputo. One can find upmarket leisure developments just south of Maputo that cost US$10-million a unit. Two years ago this would have been unthinkable. Mozambique has a shortage of A grade residential accommodation, but this area is developing rapidly. We are very optimistic about the extent that this is going to happen.

The same thing is happening in Nairobi (Kenya) where the market is really doing well, and has similar characteristics as South Africa's. There is shortage of stock and yet there are many buyers with purchasing power.

We are seeing more investment in residential and commercial market segments across the board. There is a culture in many countries of investing in residential property - the buy-to-let market. Nairobi has strong buy-to-let developments. There is definitely a strong but small residential market in Lusaka (Zambia). Namibia, Zimbabwe and Swaziland are enjoying quite a strong residential market characterised by shortage of stock, moderate to good price growth (depending on the focus market), and a strong buy-to-let market.

The two countries with massive growth opportunities that we are now targeting are Angola and Nigeria. The Nigerian market is huge (150 million people) and potentially an enormous opportunity, but with a lot of potential pitfalls.

Uganda is an interesting market. We have just been appointed to do a project there - a residential golf estate located between Entebbe and Kampala, a beautiful site on Lake Victoria. The developer who is associated with a hotel which is already operating is now launching 100 residential units at an average cost of US$1-million per unit. All indications are that the project will be finished successfully. In Uganda and several other countries, there is a lot of demand for upmarket property.

Other notable markets are the Indian Ocean Islands of Mauritius and Seychelles. They continue to tag along remarkably well. The Marina development in Seychelles that we are involved in is almost complete. We have sold 450 out of 550 properties, to the value of more than US$500-million. The country continues to attract buyers looking for that sort of lifestyle, whether it is leisure or permanent. There is a big cross-section of nationalities that have bought property here. 

We are about to launch a new big development in the north of Mauritius. We have been involved in this project for the last 10 years. There is also potential of at least 500 units in the form of an integrated resort scheme in the south. The scheme will allow owners to buy in at an entry level of between US$1 -1.5m.

What is your strategy for entering new markets?

We have a few models. In Zambia we have a franchise in which we are shareholders. In Kenya, it is a 100% franchise. It depends on the individual operator that we find in a specific country. The key to success is finding somebody who fits into our corporate culture and who we believe we can have a long-term relationship with. In Nigeria, we are an equity participant in a business. Our entry strategy is guided by various factors such as the appetite of the investors - whether they want us there or not, or whether they would benefit from our participation as shareholders as opposed to being an operator.

What are the trends in South Africa’s property market?

Two years ago and 18 months ago someone turned on the lights, and suddenly the stock started to dry out in one or two pockets. Now most of the metros are characterised by the same phenomenon - a critical shortage of stock, buyers competing with each other, and property starting to sell at asking prices or even above asking price...

Click on this link to read the rest of the interview

Tips for buying product packaging from China

Imagine Apple selling iPhones in ziploc bags instead of the glossy cartons we are used to. It wouldn’t be the same thing. Well designed and high quality packaging adds plenty of value to your product. In this article we will explain what you need to think about when buying product packaging from a Chinese supplier – including design options, materials, warning labels and marking requirements.

“Do I need to find a packaging supplier on my own?”

No. While few Chinese suppliers are manufacturing product packaging in-house, most have established relationships with sub-contractors specialised in packaging and printing. Therefore, you don’t need to bother with locating a product packaging supplier by yourself. However, In case the suppliers sub-contractor is not able to provide a satisfying product packaging, you may still source one on your own.

That said, it comes with certain complications. The packaging must still be delivered to the final assembly supplier. Unless you have a reliable partner in China, I don’t suggest you attempt to manage such a transaction.

Product packaging design

When buying product packaging from China, you basically have two options. You either use an existing product packaging, or you design one on your own:

Option #1: Custom designed product packaging

This approach is somewhat complicated. First of all, you must design the packaging according to the product shape and dimensions. Never rely on your supplier to make final adjustments to your packaging design. Chinese suppliers are accustomed to a “make to order” approach, and simply forward clients product packaging designs to their sub-contractors. Unless you have previous experience designing product packaging, you may want to get help from a professional. If you decide to do it yourself, keep track of the following specifications:

• Material (e.g. PVC plastic)
• Lock type
• Surface lamination (e.g. glossy)
• Thickness
• Outer dimensions
• Inner dimensions
• Printing (e.g. Silk screen printing and Offset printing)
• Pantone colors

Customized product packaging also requires additional tooling. Tooling costs are always paid by the buyer, but varies depending on the type of tooling. That said, product packaging tooling costs are usually quite low, and rarely adds up to more than a few hundred dollars.

Option #2: Using a factory designed product packaging

Using an existing product packaging design comes with two benefits. First of all, the packaging design is already tested and based on your products design and dimensions. That’s quite a bit of time and money saved right there. Secondly, the tooling is already paid for by the supplier, or its sub-contractor, and can be used free of charge.

Even if you do decide to use a factory design, you can still add your own touch by customising the layout. The layout must of course be based on the packaging design and dimensions, but most suppliers can provide you with a digital template.

Labelling requirements

Product packaging design is not all about posh artwork. Importers in worldwide need to ensure that the product packaging is labelled according applicable labeling regulations. In many cases, labeling requirements are part of a safety standards, such as CE (Europe) and CPSIA (United States).

Failing to comply with the applicable labeling requirements may result in a forced recall, or even a lawsuit. Keep reading and I’ll explain why.

Warning labels

Certain legal acts and directives requires the importer to attach a warning label to the product packaging, in case a product contains a regulated substance. In the case of California Proposition 65, which regulates hundreds of substances in consumer products sold in California, such a warning label shall include one or more of the following sentences:

WARNING: This product contains a chemical known to the State of California to cause cancer.

WARNING: This product contains a chemical known to the State of California to cause birth defects or other reproductive harm.

WARNING: This product contains a chemical known to the State of California to cause cancer and birth defects or other reproductive harm.

Such labels are certainly not going to make your product fly off the shelves faster. The only way to avoid warning labels is by verifying, through laboratory testing, that the regulated substances are within the legal limits. While California Proposition 65 is only relevant to business based in, or selling to consumers based in, California – similar warning labeling requirements are also outlined in the Federal Hazardous Substances Act (FHSA).

In the European Union, warning labels are not as common as in the United States. A logic explanation is that the EU decided to outright ban or strictly regulate substances under the REACH directive. Essentially, you need to ensure compliance or you are not allowed to sell the item at all – with or without a warning label. In South Africa, the law pays specific attention to the wording of labels and how products are advertised. The objective is to create an equal platform for all products by stating, for instance, having only facts and not confusing the consumer by word of implication.

Marking requirements

Certain directives, including the CE directive in the European Union and FCC in the United States, require the product packaging to contain graphical symbols.

Country of origin

Consumers have the legal right to know where a product has been made, before they make a purchase. If the country of origin (e.g. Made in China) printed on the product unit, is not visible through the product packaging, the country of origin must also be printed on product packaging.

Minimum Order Quantity

The Minimum Order Quantity, or MOQ, for customised product packaging (layout and/or design) is usually no less than 1000 pcs. The packaging MOQ is not controlled by the manufacturer, but the print and product packaging sub-contractor. This may cause certain complications when the product quantity is lower than the packaging quantity. While it’s hard, mostly not possible, to make the sub-contractor to cut the MOQ requirement – most suppliers still agree to store excessive product packaging for future orders.

Thereby, you can order a product packaging volume that exceeds the actual number of items made for your first order, without wasting money on excessive inventory. That said, make sure your supplier keeps your product packaging in a dry and clean storage area. Make that a clause in the sales contract.

Product packaging regulations

While labeling requirements concerns the item inside the packaging, there are also directives and legal acts specifically regulating packaging design, mechanical properties and substances. In the United States, the Poison Prevention Packaging Act (PPPA) regulates packaging for household items that may be harmful to children.

Most packaging regulations require the importer to ensure compliance with one or more ASTM (United States) or EN ISO (European Union) standards. Contact us today, if you want to know more about how we can help you ensure compliance when importing from China.

This article was originally published here. We re-published with permission from our content partner, ChinaImportal, an e-commerce platform that assists businesses looking to import products from China.

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Meet the Nigerian fashion designer building Africa's Hermès

By Mfonobong Nsehe

From Goldman Sachs to launching her own fast-growing high-end fashion start-up, Nigerian entrepreneur is looking to tap into Africa's growing luxury goods market.

Kunmi Otitoju, a 30-year-old Nigerian fashion designer and entrepreneur, holds two Computer Science degrees – a Bachelor of Science degree with first-class honors from Howard University and a Master of Science degree from Virginia Tech.

But her first love was Fine Art. As a high school student in Lagos, she won the Fine Arts prize at school every year for 3 years. Having moved to the U.S. when she was 17, and then to Europe at the age of 25, Otitoju found herself deeply enmeshed in western culture. Keen on preserving her Nigerian identity and eager to propagate facets of Nigerian culture, she conceived the idea of lining high-quality leather bags with Aso-oke fabric, a hand-loomed cloth woven by Nigeria’s Yoruba people.

In 2011, after stints at Goldman Sachs and a few other international corporations, Otitoju established Minku, a fast-growing high-end Afro-centric brand that produces luxury bags, wallets and other fashion accessories for men and women by subtly blending Aso-oke into contemporary Spanish leathers to present a transcontinental finish.

All Minku’s products are hand-made at a workshop in Barcelona, Spain, but they are sold at high-end stores in Nigeria and on the company’s website.

Otitoju recently spoke to me about her journey, her future plans, and the state of luxury goods in Africa.

Why Aso-Oke?

For me, Aso-Oke is luxury. It is hand-woven, the weaving is dense, in the imperfection of the weaving lies evidence of the human touch, and it comes in sophisticated colours and patterns. What is luxury afterall? For me, it is the finest aspects of one’s culture, distilled, packaged, presented to, and accepted by the rest of the world. For example, Italy has leather and coffee as some of the finest aspects of its culture, and that is evident with the luxury companies out of Italy. Same with Switzerland and watches. Africa was a bit late to the branded luxury game, but we are catching up. Aso-oke lets me contribute to this in a small way.

Are you expanding into other goods and services?

Yes. We now offer a personalization service that lets our clients customize a purchase with their name/initials/message embossed onto the leather. It is a nice way to personalize one’s Minku bag, or just to include a message that is a reminder of love or a feeder of good vibes.

In our latest collection, I introduce bracelets for men. Men’s bracelets have gained wide acceptance among males, from surfers in Cape Town to investment bankers in New Jersey. I personally buy into the idea of a man wearing a beaded bracelet — it tells a story of travel and daring, and it alludes to an open mind. So combining precious metals — 18kt gold, sterling silver — with powder glass beads hand-made by the Nupe people of Nigeria, I created a collection of men’s bracelets. Each bracelet comes in an Aso-Oke lined watersnake leather drawstring pouch of varying designs. The pouches double as key-chains.

You have been running Minku for three years now. How is it received?

Minku has been well received. Like any other entrepreneur, I have had some discouraging moments. But many good opportunities have also arisen, sometimes unexpectedly, and it is those that have helped Minku to grow. So I work hard on product and marketing, but I have also learned that serendipity is part of entrepreneurship.

Are there any specific experiences that shaped your resolve to be an entrepreneur?

My parents have been entrepreneurs for most of my life, so I had exposure to the idea of becoming one, quite early on. In 2010, I was accepted to Stanford University to study product design under the Stanford Mechanical Engineering Masters program. This was a dream come true for me because I love Formula 1 and I wanted to study how to design faster cars (I still do; I love working with constraints, and Formula 1 car design provides constraint sets that fascinate me). However, I had just moved to Barcelona less than a year earlier, and did not yet want to leave.

So, I had a hard question to answer: if I didn’t go to Stanford, could I still do good design, at a level similar to if I was a Stanford Product Design grad? I was not sure, but I decided to try. I think a lot of the courage to set out and start Minku came from desperately wanting the answer to that question to be a ‘yes’.

What do you think about the luxury market in Africa?

I think there is a fast-growing market for African-made luxury goods in Africa. Building this market to last will take a paradigm shift as to why it’s as cool to own a leather bag designed by a Nigerian or Kenyan luxury house as it is to own one from an Italian powerhouse. But it also takes much product/service refinement on the part of African designers and manufacturers. Recently, African designers have been hitting the mark on product refinement, even with local production. This has been producing results, and needs to continue. International gatherings like the 2012 IHT Luxury Conference also help to focus on Africa’s capacity for luxury creation and consumption. I like the idea of Africa as a destination for handmade luxury.

As a person running a business, what are some skills or attributes that you have found to be indispensable?

As a person running a business, I have found that optimism has helped me get far. If you combine an optimistic disposition with research and hard work, you can do great things.

As a creator of quality leather goods, what are some skills or attributes that you have found to be indispensable?

The main skill for me is creativity. I will go meta and say that an indispensable skill has been knowing how to get myself into my best creative mode.

Where do you see Minku in 5 years?

I try not to plan ahead much, because there are too many factors beyond my control. At the moment, growth for Minku is centered on making the most desirable products I can conceive. I am working with unusual materials: Aso-oke from Nigeria, and leather. So there is already some novelty there, but I am interested in seeing just how much excitement I can wring out of people, both men and women, on the mundane topic of bags. So much of my current focus is on that.

I belong to the generation where the most successful social network was started out of a dorm room, so for me, having a small atelier for working and an online storefront has not been unusual, and I am lucky that this model has been well-received. In five years, I would love to have a flagship store for Minku, perhaps in Lagos or New York City.

This article was first published by Forbes here

Mfonobong Nsehe travels across Africa, helping Forbes to chronicle the stories of successful African enterprises and entrepreneurs.