Tuesday, May 12, 2009
Business Ethics... Who Needs 'Em Anyways?
We know we all need them. We all feel strongly about being fair in business, don't we? Of course we do. I'm going to share some of my experiences with business ethics over the years in the clothing production business.
About 5 years ago, I started High Style Productions, Inc. where I would work with medium sized clothing companies and source their clothing productions with overseas factories. At first, I loved it. It was new and fascinating to work with other companies on their designs! But, it quickly become a big game in racing to get the cheapest price, not the best price, but rather the cheapest price. I was a small business owner making very small commissions while competing with larger companies who sourced at cheaper prices.
Needless to say, it was too competitive to work with larger companies who wanted me to constantly drive down the prices at factories while they maintain their prices and the factories make less. Oh, the first to suffer are the actual labor workers who sew. Larger companies will often hire someone to source their goods for them who then will give the order to the cheapest and fastest factory. I am beginning to wonder if these large companies even know how their goods are being sourced or if they are turning their heads because they don't want to know.
A couple years ago, after working with a few smaller, private clothing labels who demanded high quality, I secured a production unit in India that works with us on smaller minimums while maintaining high quality. I was then motivated to focus on these customers! This was at the same time I started designing Bubele.
I have come in contact with so many other great small companies since starting Bubele, especially other momprenuers who have created their own items to sell! But unfortunately, I see a lack of business ethics on this side as well. Recently, when working with a customer who was actually referred by another customer, they ended up cutting out HSP from their orders and going straight to my sources. How did this happen? Well, it was a freight forwarder we used for these particular shipments who we believe put them in contact. The first step was making sure we never use that forwarder again.
I need to vent a little bit about this one because this company who was started by a mom who took on a partner to expand her business keep driving down the prices and also was very concerned about how workers were paid and treated so much that I had signed a Ethics Statement for them. I had no problem doing this because 1. We check all factories we use to make sure they comply with all environmental and labor laws and 2. We had a contact do a private inspection of this specific factory.
I guess that's part of the reason I feel so burned. That and the fact they had guaranteed future orders with us, so we cut our commissions and pre purchased some of the sourced fabrics in bulk. I have spent countless hours sourcing that fabric!! Not to mention that after they had gone behind my back, they had the audacity to say that they had their eye on the Bubele line for the future! I immediately looked in the mirror looking for "stupid" on my forehead!
To them, I am sure they thought it was better for their business to get cheaper prices without considering the implications on my company who sources all of their materials (which is not known to the actual factory for this reason) and spends a lot of time perfecting their productions. I was thinking it would be the right thing to do to tell them that the way they are pushing low prices with the factory is going to affect their quality, but I think I need to completely step away from this.
So, lots of lessons learned in business. Especially this past year with Bubele!
Even though my trust has been tested time and time again, I still do think it's possible to have trust in business relationships, but with caution! I am making some more changes to my business practices that will get us more organized and better protected.
I think we all need to remember that we need to have a certain level of respect for other businesses and treat them as you would want your own business to be treated! Simple, huh?