Intimate Apparel Business USA, March / April 2008 issue, By Caroline Rath
When manufacturers need parts for their wares, they often look to outside sources for these already made notions. These can range from individual parts (like bra clasps or zippers) to patterns to the actual construction of some or all of the final products. Where and how these pieces are purchased all affect the final product’s quality and price point. So it is vital for retailers to know the genesis of component pieces to understand the relative value of their inventories and, therefore, how to sell the final products to customers.
"Anything can be sourced," explains Jane Ivanov, founder of luxury maternity line Eve Alexander. "It's a process of manufacturing your goods for the mass market (taking it from a sample, one-a-kind item, to sell to the wider audience)." From lace to hook-and-eye details, from bra straps to underwires, nearly any component can be purchased from another manufacturer from somewhere else in the world. Other aspects of the manufacturing can also be outsourced; patterns can be created by someone on the other side of the planet, as can samples of your product line.
But with global opportunities for sourcing, how does a lingerie manufacturer or designer narrow down the possibilities?
"The best way to find places to manufacture your product is through contacts in the industry," Ivanov explains. "If you already buy ready-made goods and like the quality, approach the manufacturers and see if they are open to working together. Ask people in your industry that could advise you on the manufacturers." What if you are either brand new or seeking an item that none of your industry peers have any leads on? "If you don't have any contacts, sourcing websites are a good place to start," Ivanov advises. She points to a site that she herself has used with success. "Alibaba.com is the biggest and best place for people to find manufacturing partners overseas. They are a meeting place for factories in China, Turkey, etc., and buyers from the U.S." Ivanov notes on her Success Story on the Alibaba website that when it came to finding a manufacturer, Alibaba.com was a great resource. She was able to find a strong pool of 50 vendors, from which she narrowed down her options based on communication and samples. She finally selected a manufacturer in Hong Kong with whom she has had a successful working relationship. Eve Alexander currently sources in China, Colombia, and Central America, as well as the United States.
In the apparel segment, it is Ivanov's opinion that it is vital to find sourcing partners who know this particular industry. "Finding someone that understands your market (fabrics, fashion, etc.) is important," she says. She recommends looking for partners who already do similar work. From there, you can "[f ]ocus on modifying their product and relating what you need to their current selection." To get the ball rolling, Ivanov says you should begin formally.
"Start by writing an official inquiry letter and see who responds. Ask for samples of current work, [and] visit with the factory prior to working with them if possible." This will help ensure that you are getting what you need and feel comfortable with both the product quality and the level of communication a specific sourcing partner will provide. "Find a good fit for making your products before investing into inventory," Ivanov cautions.
So where in the world do you look for sources? "Fabric sourcing comes from all over the world," says Ivanov. "Manufacturing is done in South America, Southeast Asia, Central Europe, and [for high-end products] Italy."
Patternmaking can also be sourced, and often, your manufacturing partners may be able to offer this service as well. "You have to find a good fit in their expertise [and] ability to make good quality products, [as well as] quick turnaround," says Ivanov, though she notes that this can be complicated when working with international manufacturers. "The back and forth is difficult, cumbersome, time-consuming, and expensive to do if international," she acknowledges, suggesting that instead, "Perhaps a combination of domestic patternmaking and sample making is a good addition to the work done with international partners."Sourcing, whether near or far, can come with glitches. Deadlines can be missed, shipments can be late, incorrect goods can be sent. International politics can also come into play when sourcing from distant shores. Shifting import and export quotas can wreak havoc on your production schedule. "[A] change in quotas may force your goods to be stuck at customs," says Ivanov, who has had her own close call with this dilemma. "Our goods cleared customs on the day that the quotas were filled," she remembers. "It made for a very stressful time leading up to the shipment clearing." Had the goods not cleared due to maxed-out quotas, Ivanov would have been in a tricky position. "You are forced to pay your manufacturers, but are unable to sell the goods to start recouping the losses," she explains. As if this weren't disastrous enough, there are other factors that add insult to injury. "You are also forced to pay storage for the goods and figure out how the goods will finally make it to you," Ivanov explains.
Other problems can arise as well. Sometimes the goods that are ultimately delivered to you may not match the sample or may replicate a glitch in your sample.
If that happens, you either have to scrap your investment or "you are stuck with selling less-than-ideal product," says Ivanov. But don't let these potential problems deter your business goals. Rather, keep them in mind in your communications with potential sources, from your "courting period" through your contract negotiations.
Even if the worst case scenario transpires—subpar or defective goods are delivered and you haven't contemplated which party will bear the loss in your agreements— you can still try to leverage the situation. "Try to negotiate with your manufacturers if they have made an error," suggests Ivanov. "If they are interested in a long-term relationship, they should meet you halfway." So with potential problems in communication, delivery, and product quality arising from working with overseas manufacturers, what are the ultimate benefits of sourcing abroad as opposed to going local? Simply put, cost.
"A bra could have up to 40-plus pieces," she says. "Construction requires a lot of man-hours, labor is expensive in the U.S. That's why so much of lingerie production is done overseas, where labor costs are a lot cheaper." And what about tariffs and other international costs that don't apply to domestic sourcing? "These vary year to year," Ivanov explains. "Generally, expect to pay about 10 percent in addition to the cost of goods sold in tariffs, taxes, etc. Some countries may also have internal export tariffs. Your manufacturers and freight forwarders are good places to find out these costs." In terms of the going exchange rate, buyers might need to think about it in terms of overall value, but they usually need not worry about the ultimate computation. "[Y]ou will usually get prices quoted in U.S. dollars, and you pay in that currency," Ivanov says, meaning that "[t]he changes in the currency exchange rates would already be figured into your price." Not ready to go global with your sourcing quite yet? U.S. and Canadian suppliers have a long list of benefits as well. While possibly more expensive due to different labor standards, customers can feel comfortable with faster turnaround times, ease of communication, and the accessibility of the production facility. Any concerns about **** issues can also be assuaged due to known regulations and compliance enforcement in these countries.
Finding the right source is critical. "It could make or break your business," Ivanov adds. "Eve Alexander has been equal parts lucky and skilled in its sourcing endeavors.
We have been fortunate to find the right manufacturers for us through various means, an important one being Alibaba.com. Having said that, it's a gamble, because you don’t know the quality, order accuracy, etc., until the goods are delivered. Doing your homework is really important for a new company when finding manufacturers."
