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Small-Batch Sourcing Benefits? Ethics, ESG and No Piles of Inventory

Siafu Home’s Gladys Macharia credits Powered by People with helping the home textiles brand she co-founded in September 2020 “gain credibility.”

The startup’s weavers produce blankets, tea towels, bath mats and more exclusively using Kenya– and Uganda-sourced organic cotton on handlooms clustered in a bustling Nairobi workshop, building on Macharia’s dream of restoring her native Kenya’s status as a maker of high-quality, fashionable textiles.

Connecting with Powered by People, a business-to-business marketplace exposing artisan brands to retailers seeking curated product from small-batch makers, turned out to be a “great refresher” for Siafu Home, said Macharia, who studied patternmaking at the Art Institute of Florence and earned a bachelor’s degree in fashion and apparel design at the Accademia Italiana.

PBP, as it’s called, “has allowed us to improve on areas that we as a small business needed support in, telling our story across the globe, and reaching out to a wider audience, something that we would have struggled with,” Macharia said, pointing out that Siafu has also taken notes on “how we present our brand to market.”

Conscious consumerism is fueling demand for goods produced without unethical strings attached. The U.K.’s ethical consumer spending and finance market stood at 122 billion pounds ($148 billion) in 2020, according to the Ethical Consumer Markets Report 2021, which documented a 24 percent uptick from 2019. Mindful living and trends around wellness are just two of the influences pushing the sustainable home décor market toward $556.3 billion by 2031, according to Allied Market Research, which pegged the sector at $331 billion last year.

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“Consumers are demanding more information about their products—who’s making them, where they’re made, how they’re made,” PBP co-founder and design chief Alison Phillips said. “They want to reward those brands and makers that align to their values. Yet retailers don’t really have a destination to source those products. We’re looking to be that source.”

Though it just celebrated its first anniversary in June, PBP already seems to be making a difference for emerging ethical labels aiming to cast a wider net, said Phillips, who channeled diversified experience at Club Monaco, Aritzia and BlackBerry into her role launching the platform along with CEO Ella Peinovich, the brains behind the Kenyan-artisan-made Soko jewelry line carried by boutiques and brands from Reformation to Marine Layer.

Bringing PBP to market was a matter of “trying to meet the moment,” now that tech has infiltrated parts of the world often left behind by life-changing innovation, Phillips said.

“We saw this opportunity to help enable the small-batch producers around the world that are producing responsibly made products and be able to try to eliminate some of the traditional hurdles that have historically kept them back from being a viable alternative to mass-produced factory product,” she said.

And the zeitgeist supports PBP’s mission too, with marquee nameplates such a Pottery Barn parent Williams Sonoma sourcing $50 million worth of ethically produced goods by 2025. Trend forecasters say progressive consumers who put sustainable living first could usher in a “caring economy” in the not-too-distant future.

PBP gives small-batch brands access to a suite of business-building tools, and strong adoption of the financing options signals a critical “need for cash-flow management,” Phillips said. Not only does flexible financing against current orders help makers source their materials and secure the talent they need to produce finished products, but it also means they don’t have to “wait once they’ve fulfilled an order before they can start another because they need that cash-flow injection,” she added.

That risk-reducing stability often brings much-needed relief to nascent brands where establishing reliable processes might be little more than a work in progress. Michele de Alba of Jalisco’s Al Centro Ceramica said the Mexican producer of handcrafted ceramic homewares welcomes the prospect of “systematizing our production in order to serve wholesale customers.” Since onboarding with PBP, “our growth has been very fast, since there was a market for our product waiting for us,” she added.

Michele de Alba of Al Centro Ceramica, a small-batch maker on Powered by People.
Michele de Alba of Al Centro Ceramica Courtesy

PBP plans to augment its prowess in hearth and home by chasing growth categories such as clean beauty and fashion accessories like jewelry and bags. “We will at some point look at apparel,” Phillips said. “We have little bits of that, but we still have a lot of growth within the current categories that we have.”

Makers on PBP, which has boots on the grounds in Toronto, Nairobi, Mumbai, Mexico and Turkey, haven’t been immune to the raw materials crunch plaguing the broader global supply chain, though the issues haven’t “been as widespread” as Phillips feared.

That’s largely because most artisans embrace a “spirit of no waste or minimal waste,” she pointed out. Many of PBP’s “heritage producers” employ all aspects of the raw material and hew to “historic ways of working” that champion responsible output.

What’s more, Phillips continued, small batch offers big upsides to retailers battling the shifting winds of Covid and now bracing for a “looming recession.” Working with product quantities that number in the dozens “can provide a lot of flexibility that large manufacturers can’t,” she added. Beyond the low MOQ and lack of container-load volumes, sourcing from small-batch producers gives retailers opportunities to customize or white-label, depending on the maker’s preferred parameters.

“Retailers can have the breadth that they’re looking for without having to invest heavily into inventory,” Phillips said, citing the sector’s biggest problem right now. PBP helps merchants “check the boxes” when it comes to serving conscious consumers and closing the gap on ESG targets while dealing with the reality of pricing economics, she added.

The platform offers a variety of options that take care of the nitty-gritty for retail clients. An indie boutique owner can log onto PBP, place an order and pay immediately without dealing with foreign currencies or last-mile hiccups. Then there’s access to “rich storytelling assets” that help retailers “communicate why this product is of value to their end consumer,” Phillips said. Retailers can list PBP as a vendor and gain access to the marketplace’s “hundreds” of makers, taking the headache out of the typically “laborious” vendor compliance process. Larger clients can leverage PBP makers to develop private labels or source bigger orders, Phillips said, while a dropship program is in the process of expanding to smaller retailers so that more merchants can benefit from a “wholesale type of structure.”

Though PBP is still getting its sea legs, Phillips says the platform has an opportunity to offer more of the core bed, bath and tableware products that encourage frequent reorders, such as the “perfect white plate.”

“There are so many beautiful novelty products on our site and I want to fill in those core basics so there’s always supply on hand for these retailers to buy back into,” she said. “We’re really putting emphasis on some of these core programs so they become the new bestsellers for our retail partners and they’re constantly coming back.”