With the New Year, there will be a need for uniforms, school, new businesses, new departments etc. So what are uniforms and what makes this a good business?
A uniform is defined as “the distinctive clothing worn by members of the same organization or body or by children attending certain schools”.
What makes this a good business is that there are so many markets to target:
B2B (business-to-business): company uniforms, industrial, airlines etc.
B2C (business-to-consumer): school uniforms, sports, training uniforms etc.
B2G (business-to-government): Hospitals, military etc.
The Uniform Industry
The uniform value chain looks more or less like the following:
Design > Supply of raw materials > Manufacture > Wholesale > Retail > Customise.
Depending on the type of uniform some steps may be merged. A good example is someone making uniforms from home, they will buy the fabric (raw materials) and sew it up themselves and sell it to the end user. We sometimes see this with school uniforms when some people make uniforms from home.
Can you design a better uniform, more functional, better fitting, better looking etc.
Supply of raw materials
This is the fabric and cotton that makes up the uniform.
A lot of uniforms are imported into South Africa. SA has lost manufacturing capacity across all sectors in recent years; the clothing industry was one of the first to go. When you can import manufactured goods with a tariff and pay VAT and still be cheaper than locally then you know you have a problem. But you are more than welcome to try to manufacture locally, obviously to whoever is willing to pay the local premium. Otherwise look at Lesotho, Swaziland and Mauritius if you don’t want to go to the usual suspects (China, Bangladesh etc.)
A wholesaler buys from manufacturer and sells either to reseller or direct to end-user/consumer.
A retailer or reseller buys from the wholesaler or even manufacturer and sells to the end-user. This is usually where the small business owner starts in this industry. Procures uniforms from supplier and wholesaler, customizes (via outsourcing) and sells it to his/her client.
Customizing is the personalisation of the uniforms: printing, embroidery, badges etc.
How a typical uniform startup looks like
Most small businesses in this industry start off by buying from a wholesaler and sells it to the client, and if client requests then it can include the company logo or organisation emblem (a stage which is usually outsourced). Some people focus on a single sector, usually where they have contacts like hospitality. But without contacts, people usually start with common items to target broad industries like manufacturing, mining and construction: work overalls, safety boots as well as other PPE (personal protective equipment), helmets, goggles etc.
Where is best to start
Where you enter an industry’s value chain depends on your available resources. If you have nothing then you start at the lowest possible point, lower down in the value chain is where there is the most opportunity for small businesses. In that case in reselling. Get a catalogue from supplier and go knocking door to door looking for business. Or if you can afford samples even better. Then you can work your way up the value chain maybe start to do your own printing and embroidery, or if it’s more lucrative start wholesaling yourself (or buying in bulk for better pricing and higher profits).
Running a vertically integrated uniform business
I personally don’t favour vertical integration in South Africa as its too risky, inexperienced entrepreneurs with pipe dreams often think they can work their way all the way up the value chain, in this case, that would mean, manufacture, supply and customize. Vertical integration is not a competitive advantage in SA, it’s a weakness; it leaves your value chain vulnerable to the whims of trade unions. If you running manufacture and your workers are unionized the textile unions can decide to strike for whatever reason, meaning you have no supply. If your manufacture is outsourced you can simply find a new supplier, maybe a few backyard seamstresses (lots of them out there that have lost their jobs to Chinese imports) or make friends across the border.
Any business or institution that wants to look professional needs a uniform whether its printed t-shirts in the construction industry to custom blazers for private schools.