This is longer than our usual ones, but it covers changes ATD Supply operations that i felt needed to be shared with customers and followers.
Thank you for taking the time to read it.
The correct markup: a necessary obsession.
I primarily started designing bags because I am a gear nerd and have been obsessed with adventure equipment since I was a kid. Plus, I’m presumptuous enough to think I’ve figured out how to make a couple of things work a little better compared to what was available, and that my design choices could have made travel and carry in general better for some users.
These were undeniably the first drivers, but they could no longer be the most important ones once I incorporated and started a company. When I decided to commit to launching the ATD1 backpack—and possibly more products after it—I also had to focus on financial sustainability. This is what I really needed to be obsessed with: otherwise, those design ideas would have benefited users for one product, maybe two, and then bankruptcy would have stepped into the story.
Speaking of financial sustainability, there are lots of important things to consider—like constantly trimming processes and costs, tirelessly scouting better materials, or actively negotiating better pricing with suppliers—but the most important point for me (and the one I’ve struggled with the most since the beginning) is applying the correct markup to each product.
The correct markup must ensure enough cash flow to:
- invest in R&D
- meet raw materials’ high MOQs
- keep part of those materials, already paid for, immobilized until subsequent production runs
- provide fair wages for the people involved so they can live off (and focus on) this without working somewhere else
- allow for multiple productions at the same time, avoiding the need to go out of stock before making new products
- quickly launch products when needed in order to stay ahead of the curve by meeting market demand when it arises.
- leave room for wholesalers, distributors, and agents to sustainably step in; otherwise, the company will be forced to adopt a direct-to-customer-only model (which can be a good choice, as long as it is a choice).
All this while keeping a final price that still makes it possible, for the targeted users, to purchase the product.
Not easy, I agree.
Manufacturing in Italy: potentials and limits.
ATD Supply products have been manufactured in Italy since the ATD1 was launched back in 2018. I did not promise domestic production, then switching to overseas factories once pre-orders were placed, like some did: I actually delivered it, for each product and each production run, since the beginning—seven years ago—until now.
This has been a strength and a weakness at the same time. The main issue with domestic manufacturing—and the reason why the company had constant but slow growth and wasn’t able to attract more retailers, or launch more products or colors—is the cost of production. It is so high that, in order to keep final prices affordable for the customer base, it forced me to apply a much lower markup compared to competitors—two-thirds or even half of the industry standard.
The margins generated were enough to fund R&D and sustain the company, but they didn’t allow the project to scale up, let alone do so quickly, because of a constant lack of cash flow. This led to products being made one at a time, all in black—since colors sell more slowly and come with their own MOQs—and generally pushed the company to take fewer risks, because a single failed product could have quickly forced it to shut down.
Plus, even if ATD Supply products are featured by some of the best retailers and distributors worldwide, and many more have shown interest over time, the current markup grants them a lower margin compared to competitors. Not being able to sell B2B on a constant and predictable basis slowed down the return on investment and everything else along with it.
On top of this, the world is changing and markets are changing with it, bringing uncertainty in the form of logistical issues and tariffs. Considering that ATD Supply imports USA-made materials, process them in Italy, and exports 98% of its products—50% to the USA alone before the introduction of tariffs—gives a sense of how deeply these changes have impacted operations.
So, just increase the markup, right? Wrong. Applying the average industry markup to our actual production costs would make these packs cost more than €750 each. I never planned to make cheap bags (there are dozens of companies far better at doing that), but current final prices already cut out many potential users: increasing them further would make them unsustainable for even more customers.
In the end, packs with similar quality that are made in the Far East cost their makers a fraction of what the ATD1 or ATD2 costs me, but they do not cost the final customer that same fraction. Increasing the final price would be impossible, so production costs have to be reduced in order to ensure a markup that can keep the entire project financially sustainable.
Single manufacturing partner: an asset but also a risk.
Italian bag production is mainly tuned for leather and the luxury fashion market, often more focused on materials than construction. The few manufacturers specializing in sport, lifestyle, and outdoor softgoods are essentially small, often family-run businesses, without enough margin to employ stable sampling teams. They are often understaffed, with one or two employees handling all new and existing clients at the same time. If an employee or a sewer gets sick, deadlines are simply postponed.
Plus, most Italian manufacturers nowadays lack some very common machines that make certain constructions much easier—and cheaper—to execute. When challenged with constructions that go beyond their usual workflow or capabilities, they ask clients to change their designs or simply refuse the order. At the beginning, while scouting for a manufacturing partner for the ATD1 here in Italy, I saw a dozen factories that didn’t even have bartacking machines anymore. I was told it couldn’t be made here, or I was asked €100 to €200 for labor alone—before raw material costs and shipping—from factories that clearly could not deliver the level of quality i required.
When i finally found the one-man-operated workshop i have been working with since the first ATD1 production run, even though costs were still that high, something clicked. Not only because he manufactured the products with the outstanding quality i was looking for, but also because he wanted to get involved in their engineering, never asked me to make things easier to cut corners and actively invested in machinery.
We have been working together ever since and will keep doing so, but i knew from the beginning that relying on one partner only is not sustainable and definitely too risky. At some point, I would have to look for other options, so I kept meeting potential Italian—and even EU—manufacturing partners, something i still do today, finding very few viable alternatives.
Meanwhile, i kept the full production with the original ATD1 manufacturing workshop. Over the years, he hired additional sewers and built a small but well-respected and highly specialized company, mainly developing and building their own designs for the military and tactical-medical market. As they grew, they stopped manufacturing for third parties, and we are now their only B2B customer. This led to heavy delays in recent production runs and, while I’m genuinely happy for them, it’s now clear that they can no longer support ATD Supply’s growth—not across all products and not for all production runs.
Transitioning to a new model: challenges and potential.
The company is healthy, but growth requires a different structure. We’ve seen why I need to increase markup without increasing final prices (possibly even reducing them), and why I need to find additional partners to reduce the load on my local one. For these reasons, I’ve been considering moving production overseas for over four years. Production is vital and by far ATD Supply’s main cost item: moving it overseas would reduce this cost, potentially lowering final prices while simultaneously increasing margins to a sustainable level. This would make it possible for more wholesalers to stock our products, allowing the company to launch more new products and variants, and ultimately scale up.
The potential issues were—and still are—four non-negotiable points: ethics, quality, trust, and workflow.
- Ethics means that ATD Supply and sweatshop labour cannot be on the same page, so i need a manufacturing partner to ensure fair wages, working hours and benefits to his employees.
- Quality means that I’d shut down the business before compromising on the build quality my customers are used to. Isolated QC issues can happen, but I need to be confident that our manufacturing partners can maintain the same level of meticulous craftsmanship as we grow.
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Trust means being confident that:
a) sending prototypes and patterns won't lead to cheap ripoffs in a Hanoi market, or “similar” designs appearing in brands using the same factory
b) if my pattern has a mistake (it happens) they will catch it and let me know, instead of just blindly sending it into mass production. - Workflow means that communication and shared operations must be smooth: if attention to email or precise quotations is low, imagine the attention paid to cutting fabrics or sewing up a pack.
Based on these premises, I’ve been in contact with around 20 factories across China, Vietnam, and Indonesia over the past three years—sending samples and receiving counter-samples, comparing quotations, exploring contracts, checking portfolios and certifications, and testing how they establish relationships. During this time, I personally visited six of them and felt a strong match with two.
We’re talking about factories that deliver outstanding quality, with state-of-the-art machinery, a skilled workforce (not inexperienced workers hired only because they work longer hours for lower wages and lower quality), fixed working hours in safe, modern environments, great communication, passionate and expert sales teams, qualified sampling teams, and portfolios that already include four or five top players in the industry. In other words, these people can—and already do—manufacture some of the most technically complex bags out there.
This is exactly why we are making this change now, not later: now that I’ve found partners who can address the four points above, and now that I can meet the higher MOQs they require, it’s time to move forward into this next phase of ATD Supply’s operations, and I can’t wait to grow these relationships.
In late April, we’re restocking our AFPs pouches, ASPs slings and some other small accessories (Links, Modular shoulder straps and padding, etc.). These items will no longer be made in Italy, except maybe for some special editions. Updated APC Packing Cubes, as well as some new products, will follow in late 2026. This means that anyone who wants to secure Made-in-Italy versions of these products—if still available—should act now.
ATD1 and ATD2 backpacks, together with the ARB Tote, are still being made in Italy for now but this could change in the future.
This change is not about making more money, cutting corners, or abandoning what made ATD Supply what it is.
It’s about making sure ATD Supply can keep developing versatile, innovative and durable carry products in a way that is financially sustainable, ethically sound, and consistent over time.
This decision comes from long-term planning, not from urgency
What will change is part of the production structure—so we can reduce costs without compromising quality, keep prices at a level that still makes sense for our customers, improve availability, expand the range of products and variants, and remove the fragility that comes from relying on the actual manufacturing model.
What will not change is how our products are designed, engineered, tested, and controlled; the purpose we develop them for; the materials we choose; and the responsibility we feel toward both the people who make them and the people who use them.
After seven years, this will allow us to keep doing things properly—for the long run.