With the increased desire to quit fast fashion and decrease the overconsumption and environmental impact that comes with overproduction, more and more fashion brands are looking at small batch production models to move them towards a more sustainable future. Small batch production is also an attractive option for brands that are just starting out and want to test their products in the market before investing in large amounts of inventory. But, while producing small batch has a lower environmental and start-up cost, the cost per unit is actually much higher.
This is due to the fact that factory production is an economy of scale. Factories are set up to efficiently make large quantities of the same thing over and over. They have highly skilled workers and specialized machinery that makes each step of production as seamless as possible. Tasks are distilled down to their simplest form, workflows are set up to minimize wasted time and energy, and the whole process is documented and repeatable. The larger the order, the more savings the factory get by making the process this efficient because an order 10x times the size does not take nearly 10x times the work.
Cutting is a great example of how a larger order is way less work per unit than a small order. Production cutting is done differently than sample cutting. With samples, you spread out one layer of fabric and cut out the garment with scissors. With production, many layers of fabric are spread on top of each other and a paper marker that shows the pattern piece layout is placed on top of the stack. (To learn more about markers and fabric yields, click here.) Then the dozens of layers are cut all at once with an automatic knife. This way, for each pattern you cut out, you are actually cutting up to dozens of garments at once. The amount of work to cut an extra garment equals only the time it takes to spread another layer of fabric. With small orders, you aren’t able to leverage this at scale and thus the cutting cost is higher per unit compared to large orders.
Sewing is another area that is more costly per unit when producing small batches. You may be thinking that each garment still has to be sewn whether it is part of a small or large order so there is not much savings to be had at scale here. It is true that each garment still needs to be sewn, but it is not in the actual sewing that the economy of scale comes into play. It is the set up and handling that makes large orders so much cheaper per unit. Each machine in the workflow has to be threaded with the correct color of thread and adjusted for the type of fabric you’re using. If you are re-threading and adjusting multiple machines every few garments for small orders, that is alot of wasted time outside of the sewing time. By contrast, once you are set up, you can more quickly sew a large order without interruptions. It is all the handling between steps and the machine set-up that makes small orders less efficient and therefore more expensive per unit.
Even when you purchase fabric for your production run, the more you buy, the cheaper it will be per yard. For all the same reasons sewing factories are more efficient for large orders, so are textile mills. Another reason ordering more is less per unit is that the mill or vendor has to put time and effort into making each sale. Again, the amount of work it takes to make the sale of a large order is not that much more than it takes to make the sale of a small one, so they need to charge more for small or sample orders to make it worthwhile.
Even development costs are higher per unit for a small batch order. You still have to pay to develop a new style regardless of whether you are producing 50 or 5,000. When making only 50, though, you are dividing the development cost over fewer units, making the per unit cost higher.
While producing small batch does cost more per unit, that doesn’t mean you should just go order more. There are costs and risks with large production orders as well. It is best to understand what the costs and benefits (financially, logistically, and environmentally) are of each production model and decide which is the best fit for your brand, business values, and budget.