What’s the Difference between Small Batch vs On-Demand Manufacturing
Did you know that “small batch” is not the same thing as “on demand” in the manufacturing world?
In the competitive world of apparel manufacturing and retail, these two concepts have gotten a lot of attention over the past few years. While both terms are often used interchangeably and certainly share common ground, they are definitely not the same and they each require a different approach to both production and business model processes.
What is a Small Batch?
Typically, a small batch is a production run of less than 500-1000 units per style, with many factories now allowing minimum order quantities (MOQ) of even fewer. Custom manufacturing facilities and micro-factories can support MOQ of as few as 10-20 per style or colorway.
What is the main characteristic of small-batch? It’s a self contained project; once the run is produced and shipped, it’s done! If a style is unlikely to be continued after a season or a trend is over, a small batch approach is often the best approach.
The main risk for the brand in this approach is that fabrics used may not be available for a re-order at a later time, and the unit costs are typically higher than doing mass quantities. Also, while making smaller batches reduces the upfront cost of producing a collection, brands do still have to fund their expected inventory upfront. If the style doesn’t sell well, the brand or retailer absorbs the cost.
What is On-Demand?
On-demand production takes flexibility a step further. It means producing microbatches (20 units or less) in most cases, so that a smaller inventory can be held by the seller and then replenished when demand depletes the stock, or particular sizes. In an extreme definition of on-demand manufacturing, some factories will support production of even a single unit that is made and shipped when a customer places an order for it. Think of it as truly “made to order,” where the product doesn’t exist until someone buys it. [Note: this is not the same as print-on-demand where a brand is simply applying a design to existing “blanks” such as T-shirts.]
For uniform buyers, on-demand can be aligned to hiring cycles so that only the sizes that match employees’ bodies are purchased.
This approach requires a different production and business model for both the brand and the factory. Long term planning is required, and often a brand will need to invest in a minimum amount of their fabric and materials that can be stored at the factory for quicker reorder.
On-demand is in demand, but very few factories are willing or able to pull it off. Some factories such as Resonance have found the best way to accomplish on-demand at scale is to limit the types of fabric and styles that it offers. Others, like Balodana, work with microfactories who can do fully custom design support.
The biggest drawback to on-demand production is cost and time. Each unit costs more, and the time to a customer’s doorstep may be weeks instead of days. However, the cost of returns or unsold inventory is minimal compared to traditional methods (many ecommerce sites report up to 50% return rates for apparel).
The Overlap: Benefits of Flexibility
Both small batch and on demand production are powerful solutions that share several significant advantages:
- Reduced Waste & Oversupply Risk: Both approaches drastically minimize the risk of overproduction and the common problem of unsold inventory. This leads to less material waste and reduces “sunk cost” of inventory.
- Test First, Learn Fast: Strategies like these lead businesses to “test first” new designs, fabric, sizing or colorways without committing to massive production runs. This allows for fast market validation and product evolution, since you can make corrections or changes to the style pattern.
- Improved Resources: Less inventory means simpler purchasing, reduced warehousing costs, and a better cash flow.
- Opportunities to Experiment: Always wanted to expand your size range, but didn’t want to overinvest? Curious about whether your textile design will be a hit? Investing in an on-demand or small batch model gives you the runway to try new things and to budget for experimentation in all kinds of ways!
👉 Ready to shift how you source, size, and scale? Let’s build smarter together.