Sourcing for Profit

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Understanding what you need to know when sourcing is THE key to successful sourcing


Frances Harder

When you start your design process you will usually start with an idea then you will look for fabrics and trims. This is the beginning of what we term as sourcing. Sourcing is part of the whole production process and having a clear understanding of what you are looking for is critical to your energy output and your wallet output. So, knowing what is involved and educating yourself on your options will be your first important step in the sourcing process. If you start off not knowing what you want then don’t expect to get what you want!

So, what are the most important factors for your supply chain strategy?

· Price – Before you begin to source you must have a clear market research idea as to the price point your goods will sell for. This will then determine all that you source.

· Speed to Market – With the stores and online selling speed to market is the key to selling direct to customers, or to bricks and mortar stores.

· Location for logistical or practical purposes – Important to understand you will need to monitor your sampling and then production so where it is made will be important to your own logistics. It will also be important for speed to market purposes.

· Extra value offered by the factory or Company – Do they have technical or design skills to help you develop your line?

· Quality – Check the other goods they produce to make sure they are made to your own quality specifications! Know what you want!!

• Social Compliance & Workers Safety – If they are domestic they will need to provide you with their compliance documentation. Particularly if they are located in California or New York. If they manufacture off shore you will need to find out if they are certified. If possible, it is much better to visit any potential factory and check them out

· Free trade or will there be duty to pay? – Presently there are free trade agreements with certain countries. US Trade and Commerce can help with this information.

· Stability of the country of origin - Use your commonsense when considering countries to produce your goods. Check with the US Trade and Commerce

· Payment Agreement on Samples - Often you will be required to pay for any sampling and fright. Then if you decide to go into production with the factory who did your samples they will often discount sample costs.

· Inspection Requirements –Important that either yourself or you hire an independent agent to inspect any production before it is shipped or you could be dealing with a warehouse full of goods that can’t be sold or you have to hire help to correct any errors.



Make sure you are comparing apples to apples!

Usually you will have produced your first sample and done some cost analysis. You may already have your fabric sourced but looking for production sourcing. Or, you maybe sourcing both fabrics and production. If so you should have your first samples technical requirements and a basic Tech Packs that have details about your product. If you have already chosen your fabrics, or know what you are looking for then it will important to make sure you are comparing:

· Same Weight of Fabric & Trims

· Same Construction and Sewing

· Same Specs and Finishes



What is a Tech Pack? - Information needed for consistent pricing, production process including sizing and delivery

· Fabric weight and fiber content

· Trim Details with specifications, including buttons, zippers, embroidery stitches, labels, Hang tags

· Sewing Details

· Packing Details

· Size specs graded and size range defined

· Chemicals applications and washes to apply including the standards

· Packaging details



Important to note that the more requirements and tests needed, the higher the garment cost!



Terms & Duty Rates

· FOB – Freight on Board (Where do you take possession of the Merchandise)

· LDP – Landed Duty Paid

· DDP – Duty Delivered Paid

· Duty Rates by Category

· Duty Rates by fabric classification

· Duty Free agreements with specific Rules of eligibility



Check List: What to Look for in a Factory

· Social Certifications

· Factory overall capacity for new customers

· Minimum orders by fabric, color and style

· Location – country and distance to port

· How long has the company been in business?

· Past and present customers with similar products

· In house facilities and where is their outsourcing done? Printing, embroidery, washing, dying etc. Need to make sure they are working with compliant subcontractors.

· Average turn time for specific styles after all approvals

· Inventory of their equipment and maintenance schedules

· In house auditors, auditing procedures and records of audits

· Technical staff available for assistance

Communication

Do they write or speak English? Do they have a complete understanding of your questions or comments? – If they don’t understand you when you are talking with them at a sourcing trade show then how are you going to communicate with them?

· What Work in Progress (W.I.P) reports will they provide?

· Response time?

· Sample quality – any issues due to poor communication skills

Final Word of Caution

Please make time to check credentials and get references so you can get reliable feedback on the people, consultants or companies you are sourcing from!


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