My Biggest Mistake: Stuart Findlay

Stuart Findlay, 47, is the chairman of Pelmark Group, a leading supplier of promotional merchandise. On leaving Bishops Stortford College at the age of 16, and reading a book in his local library called Get Up and Go, he packed his rucksack and spent the next two years hitch-hiking through 55 countries. When he returned to the UK, he spent one term at agricultural college, tried his hand at pig farming, then property development. Pelmark was founded in 1974, became the first UK importer of Tyvek industrial clothing, and has a pounds 7m turnover today.

MY BIGGEST mistake was in importing goods from overseas without first having them inspected. About five years ago we had begun to make our own promotional merchandise after setting up a factory in Malta. We were concentrating on producing polo shirts at competitive prices, so to me the cost per kilogram of the fabric we used was of the utmost concern. This was part of my mistake.

We had been let down by our former suppliers in China and were searching the world for other sources when we eventually found a manufacturer in Pakistan. The samples they sent us were good and the price was right. I placed an order for three containers of fabric - at a cost of pounds 65,000 - without going out there.

I did go to Pakistan shortly afterwards to discuss our long-term requirements, but due to flight delays I didn't take the time to see the mill. Instead, I met the knitters at their offices in Karachi, where they showed me the fabric they were supposed to be sending. I didn't foresee any problem.

We had been buying finished goods from all over the world for 12 years, and in the early days had employed local inspectors for our quality control. But they were expensive, and often delayed shipments. In our experience, this process wasn't worthwhile; we had found that suppliers want to give you a good product, so that you will place repeat orders.

This time it was different. The fabric in the first container was rubbish. It wasn't white, it had defects and even the width varied. It was not what had been ordered or what had been shown to me in Karachi. By this time the second container had arrived. The third was on its way, and we couldn't send them back because we had covered all three with one letter of credit.

We decided we had no option but to make the fabric into garments. Then we discovered the biggest problem: the garments shrunk by as much as 20 per cent. It was another expensive lesson - one of our customers took us to court and we paid pounds 30,000 in compensation.

The factory in Pakistan would not admit liability, so we had to call in an inspection agency with a branch in Malta to show that the fabric was sub-standard. It took a nine-month battle to get just dollars 15,000 out of the supplier. The whole sorry saga ended up costing us plenty but it taught me that you have to be very cautious when venturing out of your area of expertise. I had been over- confident in believing it was in the supllier's interest to give us quality goods.

We continue to buy from Pakistan, which produces some of the best cotton. But I chose my next supplier with more care. And, of course, we now use inspectors for all our fabrics, from Pakistan or anywhere.

(Photograph omitted)