This content was created by Lara Guevara. This content was uploaded by Lara Guevara. This is a YouTube video titled "The Hidden Cost of Going Direct" featuring Lara Guevara discussing the challenges and hidden costs associated with going factory direct for production, including issues with minimum order quantities, lack of local oversight, and limited options for quick changes.
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Everyone loves to say Go Factory Direct to save money, but I've seen so many brands lose margin, time and sanity because they went straight to the source without realizing what that really meant. Scenario number one when your MOQ is too small Factories are built for efficiency. They want long production runs, big orders, and zero interruptions. If your order is small or customized, they'll still tick it, but you'll pay the inconvenience tax. Set of fees, longer timelines, smaller disks, all because your order doesn't fit their system. A good trader would have combined your volume with others and made it workable. Scenario number two when you don't have local eyes, factory Direct works when you can manage it when you're visiting, inspecting, and following up on every step. But if you're doing it remotely, you're at their mercy. A missed update or a bad batch might cost you an entire launch cycle. That's when having a trader or sourcing team on the ground saves you. Scenario number three when you need options Fast factories rarely introduce competitors. If you need a backup or a faster lead time, you're on your own. Traders, on the other hand, work with multiple factories. They can pivot, split production, or switch SKUs without starting from scratch. Factories Direct isn't wrong. It's just not always cheaper.