 Why is collaboration essential to custom apparel entrepreneurs?
It may be true that healthy competition can benefit the consumers and drive the desire to innovate. But in the long run, too much competition can also kill innovation because of the "island-effect" that it can cause. The custom apparel industry in the Philippines is considered fragmented. No single big company controls the entire industry. The downstream companies (raw material and equipment suppliers) are quite few in number but the upstream players (manufacturers, sewers, subcons, marketers, designers, printers, etc.) proliferate and they are now distributed all over the country, from Luzon to Mindanao. The fragmentation results to less bargaining power among the custom apparel players, which can result to more intense competition. The buyers in the custom apparel industry are a mix of big and small ones. On one hand, those who serve the big buyers suffer from more intense competition such that the "island effect" becomes more prevalent among them. On the other hand, the players serving the small buyers face less intense competition. Overall, competition is still intense. If the fragmentation continues, more custom apparel players will perish and new ones will appear, creating a faster cycle of "rise-and-demise". So, how do we reverse this trend and stop this vicious cycle to happen. The only logical thing to do is to encourage the custom apparel players to compete vertically and collaborate horizontally. See next article on Horizontal Competition and Vertical Collaboration
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Be a reverse entrepreneur More than 5 years ago, I coined the word Reverse Entrepreneur, which was the title of my website blog. I came to realize that the reason why so many small entrepreneurs failed is because they forgot this principle. Unsuccessful entrepreneur starts from the left. The successful entrepreneur starts from the right, that is why it is called Reverse Entrepreneurship.  The proliferation of business seminars focusing on low-capital-and-easy-to-produce products have resulted to so many start-up failures. Examples of these seminars include soap-making, candle-making, screen-printing, flower arrangement, and many others. As you can see, the focus of these business seminars is the low technology requirement as well as the low barrier to entry (meaning, anybody can join the industry without much capital). They are so simple such that the focus of the seminars is to show you that they are so easy and inexpensive to produce. The focus is the left side of the above diagram. What you will not learn is about the right side of the diagram above - the customers, the competition, and the industry you will be competing in. What do customers really need and how do you compete in their minds. Later, you will find out that learning how to produce the product is not the end of it. What makes the venture fail is the need for skills and big capital to spend for packaging, advertising, and distribution. They totally forgot about the growing competition from big and small companies, which sprouted because anything that is easy to produce invites many competitors. The seminar participant, who only have a few hundreds in his pocket is made to believe that if only he can learn to produce the product in small quantity, he will have a business and can be successful. That's not totally true! Been there, done that. The whole point here is that you should be deeply analytical and not believing anything at face value. Start with the customer and the industry analysis. How is reverse entrepreneurship applicable to customized sublimated sportswear First, customization is a highly reverse business operation. Every order starts from the customer. No production can start without a firm customer need. Custom team uniforms are not something that you produce after a one-time market study and customer analysis and interaction, and then sell them. The customization market is a fully reverse operation. Interaction with the same customer continues all throughout the business life. There is no doubt custom team wear business is profitable. If it is really profitable, how come the big brands are not doing it. Actually, they are venturing into customization but they don't seem to be that successful. One possible reason I know is that the big companies are structured differently. They don't own the factories who do their products. and these companies are designed for big lot production (and not small lots needed for customized market). Their marketing outlets are not organized to take customized orders and doing a reverse business operation for every sale is a whole lot of logistical and control nightmare. So, I believe, the customization market will remain a domain of the smaller and more flexible companies who can do guerilla operation. In the customization industry, sublimation technology offers the best alternative because it is much faster and economical to do in small batches. The traditional cut-and-sew team uniforms require longer turn-around. To be a successful entrepreneur, you need to have a bat. Yes, just like the baseball bat, figuratively, so you can hit the ball flying. BAT stands for
When I say business skills, it means everything that the business school teaches. Although, you may not need a formal business school education, it helps to know the basic teachings in business, which fortunately, can now be learned outside the school. Aside from formal schooling, you can learn from your past business ventures, whether successful or a failure. You can also learn from the internet, from so many published insights and experiences of successful and unsuccesful people. In this internet age, you don't need to experience it yourself to learn from it. Instead, learn from others' experiences. Learning more about the business principle and practices helps you calculate the risks involved and avoid unnecessary failure. More inspiring BAT discussion in the succeeding blogs. |
AuthorHe is a licensed civil engineer who applied his skills into sports fashion engineering and made it a business. He took up MBA when he realized that it is much easier to construct a building than to manage his boss. Because he lacks social skills in his younger days, he turned to books as his mentor. In the process, his imagination became so clear that he started making sketches and drawings in his mind while in the toilet. He realized it is much easier to refine drawings in the mind than on paper. Archives
August 2017
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