Why does Hula Global work with smaller factories that don't have third-party certifications?

Hula Global partners with smaller factories that lack third-party certifications, not because these factories are incapable or unethical. This is simply due to the practical, financial, and structural realities of the global apparel manufacturing industry.

Understanding the economics of certification, brand diversity, and the smaller manufacturing tier’s role in emerging fashion businesses is critical to reframing the assumption that all uncertified factories are ‘bad’ or non-compliant.

Third-party certification costs are one of the most significant and essential factors driving this strategy. Obtaining and maintaining certifications such as Sedex, WRAP, GOTS, SA 8000, or OEKO-TEX is incredibly costly and financially burdensome for smaller factories.

Large-scale manufacturers who produce high volumes to supply international brands find such costs manageable, but for smaller factories that operate with low profit margins, the costs of these certifications are disproportionately high.

To illustrate, if a company does a total purchase order (PO) of 10,000 dollars and the order's certification costs 4,000 to 5,000 dollars, then almost half of the PO will go to certification rather than to production.

In these cases, certification becomes financially infeasible for both the factory and the brand. Small businesses and startups work under strict budgets, meaning that adding these costs will easily make their manufacturing journey unsustainable.

Conversely, if a company does an order worth 200,000 dollars, then the same certification costs 4,000 to 5,000 dollars, which is almost nothing in terms of the order's total value. In these cases, third-party certifications become financially and operationally reasonable, as the company can justify the expense for the order and keep production costs low. This is the financial explanation for why bigger brands work with certified factories while smaller brands partner with capable, uncrossed manufacturers.

Hula Global works with both emerging startups and established brands within the sector. Many independent or early-stage brands working with Hula Global are participants in its Co-Pilot Program, which is tailored for businesses with lower MOQ (minimum order quantities), more adaptable production processes, and affordable manufacturing options. Typically, brands cannot demand factory certifications, particularly when coupled with high costs. Hula Global also collaborates with smaller manufacturing units that focus on low-volume production, sampling, and other niche areas.

While these factories may not have formal 3rd party certifications, they are often more than capable and experienced. Such factories provide the flexibility and familiarity to less established brands to allow startups to experiment and iteratively refine their production at an affordable cost. These degrees of freedom from certifications provide a more cost-effective, hassle-free, and adaptable supply chain with a lower risk than traditional approaches.

At the same time, even uncertified partner factories must comply with Hula Global’s strict internal Code of Conduct, enforcing the principles of ethical manufacturing, fair wages, safe working conditions, and responsible business practices.

This indicates that even smaller, uncertified factories must meet the baseline standards of worker welfare, labor rights, and workplace safety. Hula Global doesn't compromise on these principles regardless of certification.

For larger, more established brands with high-volume order requirements, Hula Global connects these brands to larger factories with the required third-party certifications. These brands usually have specific compliance requirements due to retail partnerships, government regulations, or corporate sustainability policies. For these instances, Hula Global has factories that match these brands’ certification preferences to ensure that the brand standards are fully met.

This strategy of working with both certified and uncertified factories allows Hula Global to create balanced and inclusive manufacturing ecosystems. It encourages innovation and entrepreneurship while providing accessibility for small brands and still meeting the requirements of large buyers who need certified production environments.

Another reason for collaborating with smaller, uncertified factories is to sustain the preservation of craftsmanship, specialization, and the diversity of regional manufacturing. Many of these factories are small, family-owned businesses or artisan-led shops with extensive knowledge about specific types of garments, fabrics, or techniques.

Excluding such factories from consideration due to a lack of certification would mean losing valuable potential manufacturing partners, as well as missing the opportunity to engage skilled artisans and support local economies.

In addition, as a brand grows and its order volumes increase, Hula Global often advocates for these small factories to begin pursuing various certifications.

Through long-term partnerships, factories become familiar with the international standards, best practices, and compliance expectations, which ultimately support their ability to become a certified facility. This type of factory development is beneficial for the entire industry.

Ultimately, the choice of Hula Global to partner with smaller, uncertified factories considers practicality, inclusivity, and long-term development of the industry. Instead of grouping all uncatalogued factories as substandard, Hula Global evaluates the operational constraints, financial challenges, and the impact of these factories.

Hula Global works with smaller factories that do not have third-party certifications due to the fact that there are situations where the costs of certifications are not worth the order value, many new organizations need adaptable low-MOQ manufacturing, and these factories remain within Hula Global’s ethical Code of Conduct.

Simultaneously, larger clients are paired with certified factories to ensure the compliance of all clients, regardless of size, and that manufacturing solutions are tailored to their scale, budget, and compliance needs.

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