Monday, February 20, 2012

Made in China? I'm thinking out loud, people.

Over the course of the past ten years, the cloth diaper industry has grown in leaps and brands.  New brands.  New styles.  New fabrics.  Most of the change has been positive, however, a new trend that has come on fast in the past year involves the availability of generic cloth diapers, directly imported from manufacturers in China.  If you check eBay, it's not hard to notice listing after listing of ultra low-cost diapers that look like their name-brand counterparts.  Out of curiosity, I bid on a listing this weekend -- for the low price of $3.25, I'm the proud new owner of a one-size pocket diaper.   As unbelievably low as that price is, that price includes both the diaper *and* shipping & handling from Hong Kong; considering it costs $1.80 to send a letter to Hong Kong, that puts the cost of the diaper itself at roughly $1.50.

More and more, I'm noticing customers mentioning generic brands in the store. On occasion, customers ask me about certain brands, mistaking them for diapers made in Canada (more often than not, the 'WAHMs' who import these diapers fail to make mention of it on their website).  I can't really offer too much input on what they're like, which was one of my motivations for ordering a sampling of these diapers, so I can know how they compare to the name brands we sell.  

My other motivation for ordering samples is to consider selling them -- if people are eschewing name brands in favor of generic brands, I'd be a fool not to consider stocking a generic brand of cloth diapers.  The majority of generic pocket diapers (with two exceptions) are imported directly from one specific company, in my limited exchanges with them, I'm not sure what kind of after-sales support would be offered if ever an issue arose (the language barrier is an issue, to say the least).  The companies who import and sell these generic pocket diapers, along with the manufacturer, don't seem to post specific warranty information which leaves me wondering how warranty issues are handled.  If we were to order and receive a batch of diapers with defective PUL, what kind of support would we get from the manufacturer?  A recent batch of bad snaps saw Fuzzibunz replace diapers for customers, and increase the warranty on their diapers' PUL and snaps to a lifetime guarantee.  One of the great things about cloth diapers is that they can be used for multiple children -- if diapers aren't made to last, I'm not sure parents are really saving money in the longrun.

Warranty issues aside, the incredibly low markup of these diapers gives me pause to stop and think about stocking them. Cloth diaper margins are already slim (that's why you don't see stores like ours in Toronto, folks!), the businesses importing and selling generic pocket diapers in Canada seem to be applying an even slimmer markup.  The overhead of a brick and mortar store is much higher compared to that of a home-based online business, I'm not sure it would be wise (or feasible) to dedicate floor space and cash flow to product that does not offer even slim margins.  If I'm selling the diapers at barely-above-cost, will I be any further ahead?  

I understand one of the prime motivators for people to use cloth diapers is to save money.  However, when you consider the long-term picture, you will always save money when you choose to use cloth diapers.  We recently started stocking the Econobum prefold kit, manufactured by Cotton Babies, a family could get set up with 24 one-size prefold diapers and six covers for less than $100.00 -- cheaper than any generic pocket diapers, these diapers come with the standard one year Cotton Babies warranty.  

At this point, I'm not sure what to do.   I think the availability of generic pocket diapers is a game-changer for established businesses who retail brand name diapers, but I'm not sure how to respond. I want to sell products that I'm confident in, and that we can stand behind.  Selling cheap diapers purely for the sake of selling cheap cloth diapers doesn't feel right to me, but if we're losing customers to businesses who do just that, I need to consider it.