Sourcing and Negotiation in Garment Export Business

Like any other business, sourcing and negotiation is a very common policy for garment export business. Any business cannot run without sourcing and negotiation. So sourcing & negotiation is very important for garment export business. In this article I will discuss about sourcing and negotiation in garment export business.

Sourcing and Negotiation

Sourcing:

Sourcing is the term used to describe the process of determines how and where item will be procured. It includes the decision on the selecting suppliers for materials procurement and vendors for apparel production. The main purpose of the sourcing process is to obtain high satisfaction with the low cost. Sourcing department in apparel industry along with merchandiser assumes the fundamental part of executing the order & shipment of them at lowest price.

Stages of sourcing/How to source buyers?

  1. Internet
  2. Business directory
  3. Advertising
  4. Buying houses
  5. Embassy
  6. Exhibition etc.

Factors of sourcing:

  1. Product factors: Style, design, quality standard, price reference.
  2. Company/Vendor factor: Company goodwill, previous history, minimum order quantity, quality standard and service ability etc.
  3. Country factors:

Political: The present political stability of a country.

Economical: Financing, banking, insurance etc. facilities/tax free or other opportunities.

Culture and language: Previous history, morality, religious factor, ability of speaking English.

Geographical: Distance, transport etc.

A check list for selecting a vendor/factory at a glance:

  1. Name and address of the company
  2. Contact number and person
  3. Major market or customer (which customer they deal)
  4. Major products (which products they experienced)
  5. Capacity (monthly or annually)
  6. Physical size of the plant
  7. Number of employees
  8. Financial status
  9. Location of production
  10. Production facilities
  11. Quality standard
  12. Minimum order quantity

Negotiation:

In general, negotiation is not a contest. It creates an opportunity to establish a nice working relationship between two or more parties while obtaining a good deal. It is also called bargaining. Negotiation of product or service price is a very critical and painful aspect of garment sourcing. Basically apparel merchandisers do the negotiation behalf of factory or buying house.

Every merchandiser wants to collect garments export order, but he/she should be able to convince the buyer. When the garment buyer become convince about apparel production, products quality, garments costing & shipment ability of a garments exporter, he/she can think about issuing a garments export order. A successful negotiation result does not mainly occur through luck, but by following a clear process.

Negotiation skill requirement/Being a smart merchandiser what sorts of skill you should for a successful negotiation?

  1. Discovering common interest and removal of personal issues
  2. Questioning skill
  3. Positive attitude
  4. Listening effectively
  5. Knowledge of the negotiation process
  6. Understanding body language
  7. Creativity (settled on a solution you negotiate)
  8. Communication skill
  9. Observation and judgment
  10. Influencing skill
  11. Self confident
  12. Know when to start, stop and bottom line.

What are the barriers for a successful negotiation?

  1. Attacking
  2. Blaming
  3. Closed body language (any type of negative reaction)
  4. Interrupting
  5. Sarcasm
  6. Talking too much
  7. Threats
  8. Talking it personally

Conclusion:

Apparel merchandiser has to consider all the quality parameters involved to the samples to be developed in case of non-conformities in the sample developed. Revised samples may be sending for approval purpose. It is one of the principle duties of the merchandiser to dispatch the developed samples on the time to the concerned buyers. So I can say sourcing & negotiation is very important in apparel merchandising department for development of apparel production.

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