Archive for September, 2010

Buying New Zealand made – Jeans?

September 12th, 2010 2 comments

In my last post, I indicated that I had a side project that had chewed up a bunch of my time. As part of the Bright Ideas Challenge, my flatmate and I had been investigating the plausibility of making jeans in New Zealand. After much research and spread sheeting, we determined that it was not economically viable for us to pursue this venture.

This is not to say that it’s not viable for someone else to pursue, but in my current job as a programmer, the extra supplemental income doesn’t match what I would make by going contracting and working sixty hours a week for a bank. The hours would be the same, but with more consistent income, and without the added hassle of juggling jobs and chasing up suppliers.

Our target market was the men’s denim market at around the $140 retail per pair price point. The observant among you will note that this is approximately the price of a pair of red tab Levi’s. In order to make it worth while for both us, it would have required around the fledging company to have taken or generated around 20% of Levi’s market share in New Zealand. That’s much more difficult than it sound.

Finally – this simply isn’t our area. If you’re in fashion design and manufacturing, it might be possible to make this work, but for an accountant and a programmer, we were going to have to contract in everything, and we simply don’t have the contacts to cut the kind of deals required to make this work.

So – what did I learn?

Firstly, New Zealand suppliers are awful. In May, I gave Ross Green of Drive Technologies a hard time for his statement in a NZ Herald article where he lambasted local manufacturers for not keeping up;

“But the simple fact was we just couldn’t get the subcontractor support locally, and we couldn’t get the logistics performance locally,” he says. “Local subcontractors just didn’t understand the importance of meeting dates.”

This matched up all to well with my own experience. Almost nobody in New Zealand was willing to give quotes, talk about schedules, time frames, or anything involving numbers. Several of my calls and emails from a few weeks ago are still unanswered. One contractor said the she did not have the equipment to sew denim. I asked how many would be required to make it economic to buy the equipment – in effect, subsidising an upgrade. She was not interested in doing that as it was “too much of a hassle”. Anyone familiar with Kiwi culture may find this all too familiar.

In contrast, my discussions with overseas suppliers were much more constructive. An organic producer in Australia happily gave me a full price list with bulk discount options, and then if asked if I’d like a sample book of swatches couriered to me, even though I had stressed that we were merely at the information gathering and concept stage. That’s service.

When we purchase a good at a retail store, we pay, in part, for the convenience of not having to deal with the myriad of details that involve the supply chain. The more complications and difficulties that beset that chain, the more the final good will cost. I can’t help wondering, how much the glacial responsiveness of the New Zealand fabric and garment manufacturing industry impacts on the final price of locally made clothing.

Which brings me full circle to my original question a few months ago – if New Zealanders aren’t ready to pay workers a first world wage for common goods, how can we expect to maintain a first world lifestyle?