OEM Clothing Manufacturer

5. Things to look out for in OEM contracts: a key checklist

When signing a contract with an OEM manufacturer, a detailed and clear contract is the cornerstone of your business success. The following is a detailed list of core considerations：

1. Minimum order quantity (MOQ)：Clearly agree on the MOQ for the initial order and subsequent orders. Ask if SKUs of different colors or sizes can be combined to reach the total MOQ, which gives you flexibility.

2. Pricing Structure：

   • Clearly state whether the unit price is FOB (free on board) or CIF (cost, insurance, and freight), as this determines who pays for freight and insurance.

   • Does the price include sample and mold fees? How do fabric price fluctuations affect the final pricing (for example, is the price locked in when the order is placed or calculated based on the market price at the time of production)?

   • ️ Indicate the payment currency (usually USD).

3. Payment Terms：This is the core of risk control. Common installment payment methods are:：

   • Pay a 30-50% deposit after placing an order.

   • After production is completed and inspection is passed, the balance (40-70%) must be paid before shipment.

   • Avoid accepting “100% upfront” or “cash on delivery” terms, which are unfair to both parties.

4. Delivery time: clearly stipulate the total production cycle from deposit payment to completion of goods.The contract should include penalty clauses for delays caused by the manufacturer, but it should also understand reasonable delays caused by force majeure (such as epidemics and typhoons).

5. Warranty and Guarantee：

   • The manufacturer warrants that the products will be free from defects in workmanship and materials.

   • Clarify the criteria for defining quality issues (for example, refer to AQL inspection standards).

   • What are the solutions for problems that arise? Return, restocking, or compensation? How long is the warranty period?

6. Termination Clauses：It stipulates the conditions under which either party can terminate the contract, as well as the handling methods after termination (such as the handling of semi-finished products and special fabrics, the proportion of deposit refund, etc.).

7. Intellectual Property (IP) Protection: Crucial! It must be clearly stated that the copyright and ownership of all designs, drawings, patterns, and trademarks provided by you belong to you exclusively. Manufacturers are not allowed to produce the same or similar products for any other third party.

8. Non-Disclosure Agreement (NDA)：Make sure your contract includes a confidentiality clause to prevent the manufacturer from disclosing your designs, customer information, and business plans to third parties.

9. Quality inspection standards：Clearly agree on the inspection standards to be used (such as the internationally accepted AQL 2.5), and stipulate that you or a third-party inspection agency has the right to inspect goods during production and before shipment.

10. Liability and Insurance: Clarify who bears the risk of damage or loss of goods during transportation and who is responsible for purchasing insurance.

Final advice: Before signing any contract, be sure to have it reviewed by a lawyer familiar with international trade or apparel manufacturing.

6. The process of launching a clothing line with an OEM partner

Here’s a complete roadmap from concept to market:

• Step #1: Identify your target market: Conduct market research to identify who you are targeting (age, occupation, style, spending power). Their needs will determine every detail of your product.

• Step #2: Create a business plan: Plan your brand positioning, financial budget (costs, pricing, profit), sales channels (online, wholesale, retail), and marketing strategy.

• Step #3: Design your collection and create a Tech Pack: This is the core creative phase. Draw up your designs and create a detailed Tech Pack, including sizing charts, process instructions, and fabric and trim requirements. This serves as the “common language” for communication with the factory.

• Step #4: Find the right garment manufacturer and take samples: Follow the previous guide to find a factory. Sampling is crucial and usually requires multiple iterations of “first sample,” “revised sample,” and “pre-production sample” until the sample meets your requirements.

• Step #5: Create a marketing and advertising plan: During production, work on marketing. Shoot a lookbook, build a website, manage social media, connect with influencers, and prepare pre-sale events to build momentum for the launch.

• Step #6: Bulk Production and Quality Inspection: After confirming the pre-production sample, the factory will begin mass production. During this period or after the production is completed, you will need to conduct mid-term or final inspections to ensure that the quality of the bulk product is consistent with the sample.

• Step #7: Launch your clothing line: Once the goods arrive in your warehouse, officially launch your line online and execute your marketing plan. Handle orders and logistics promptly, and gather initial customer feedback.

• Step #8: Analyze feedback and plan for the next season: Based on sales data and customer feedback, summarize successes and shortcomings and start preparing for the next collection.

7. Costs and expenses associated with the OEM clothing business

• Pre-production costs：

  • Proofing fee (usually refundable if you place a bulk order)

  • Plate fee (plate making/plate opening fee)

  • Design tool costs (software, fabric procurement, etc.)

• Production costs：

  • Fabric/accessory material procurement cost

  • Processing fee (CMT)：Factory cutting, production, and trimming costs

  • Logistics costs: international/domestic shipping, customs duties, and insurance from the factory to your warehouse

• Post-processing costs：

  • Tags, care labels, packaging bags/boxes

  • Local logistics delivery fee (sent to customers)

• Hidden costs：

  • Quality inspection fee（If you hire a third-party inspection company）

  • Marketing and advertising expenses

  • Platform commissions (such as sales on Amazon, Tmall, etc.)

  • Inventory storage costs

  • contingency fund：Be sure to set aside 10-15% of your budget for unexpected situations.

8. How to cooperate with OEM clothing manufacturers

The keys to a successful collaboration are professionalism, clarity and respect.

• Communication is key: Use professional terminology and technical packs when communicating, and avoid vague descriptions. Reply promptly, but also understand time differences.

• Build relationships: Treat factories as your strategic partners, not just suppliers. Good relationships will provide you with more support when you encounter difficulties.

• Trust but verify: Although trust needs to be established, all key requirements (quality, delivery time) must be written in black and white in the contract and verified through inspection and other means.

• Visit the factory in person: If conditions permit, visit the factory in person to check out the production environment, equipment, and technical level. This will build deeper trust and understanding.

• Be prepared: Do your homework and understand the basic production processes and cost structures. This will help you negotiate more effectively and gain the factory’s respect.

9. Tips for Finding the Right Apparel Manufacturing Partner

• #1 Define your needs: Know your product type, target quantity, quality standards, and budget. This will help you quickly filter out factories that meet your requirements.

• #2 Do your research: Look for factories through various channels such as industry exhibitions, B2B platforms, and peer recommendations, and carefully check the factory’s past cases and customer reviews.

• #3 Consider your budget：Find a factory that matches your budget. For small orders, look for a boutique factory that specializes in small orders, and for larger orders, look for a larger factory.

• #4 Request samples: Samples are the only way to test the factory’s technical capabilities. I would rather pay for the sample than see the actual quality.

• #5 Negotiated terms：The goal of negotiations is to reach fair and sustainable terms for both parties, rather than simply lowering prices, which might force the factory to compromise on quality.

10. Mistakes to Avoid When Starting an OEM Clothing Line

• #1Lack of in-depth research：Investing without fully researching the market, target customers, and competitors.Solution：Do your homework and verify whether there is a market demand for your idea.

• #2 Skip the sample stage：Blindly investing in mass production without confirming the pre-production sample will result in the finished product not meeting expectations and causing huge losses.Solution：Strictly follow the sampling process and confirm the pre-production sample before production.

• #3 Ignoring marketing plans：The “if you build it, they will come” mentality is deadly. Without marketing, no one will know about the best product. Solution: Start marketing during product development.

• #4 Pricing your product incorrectly: Pricing based solely on product costs while ignoring all expenses like marketing, operations, labor, and platform commissions, resulting in no profit. Solution: Use a “cost-plus” pricing method, calculating all costs and adding your target profit.

• #5 Neglecting quality control: Skipping professional QC inspections to save costs can lead to defective products, damage to brand reputation, and spikes in returns. Solution: Build QC costs into your budget and either inspect goods yourself or hire a third-party professional inspection agency.

Avoiding these common pitfalls can greatly increase your chances of success in your OEM apparel business. Good luck!