Key Players in the Apparel Export Business
Md. Abu Sayed
Pabna Textile engineering college, Pabna, Bangladesh
Apparel export business is a combined network of several players who play a vital part in the industry. The major players in the apparel export business are –
1. Manufacturer Exporters:
These are the persons who do the manufacturing of apparels and also do the export. They have their own import export code (IEC) number and also own production facilities. The orders will be in the name of manufacturer exporter and they deal with buyers directly. As they have own production facilities, they take more responsibility so make more profit.
2. Merchant Exporters:
These are the persons who take orders from the buyers and get it done from the others and export in their name. They have their own IEC number but they do not have own production facilities. The orders will be in the name of merchant exporter and they deal with buyers directly. As they do not have own production facilities, they take less responsibility and make less profit when compared to manufacturer exporters. Now a day most of the merchant exporters have become manufacturer exporter because starting a garment factory does not require a high investment as such that of spinning, processing etc. and also not a complicated one.
3. Buying Office/House:
Buying house or office is a buyers own representative or branch office in the country of production. Sometimes it is a liaison office of the buyers which is given as a business contract to a local business partner. A buying office deals with only one buyer and a liaison office also normally deal with one buyer but sometimes if it deals with more than one buyer then they should not be a competitor to one another. Only big buyers afford to open a buying office because of the volume of business they placed in the country of manufacturing. The functions of a buying office are as follows –
- Order placing and follow up.
- Giving approvals, conducting inspections and factory audits etc.
- Receiving and sending samples from exporter to buyer or vice versa.
- Supplier sourcing and development.
- Product and business development.
- Helping in shipment and documentation.
- Providing consultancy to the exporters.
- Accompanying buyer while their visit to the country.
- Performance appraisal of the exporters.
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4. Buying Agents:
Buying agents are the inter-mediators between the buyers and exporters. They work on commission basis (3-6%). Sometimes there may be more than one buying agents involved in a particular order then the commission is divided accordingly. They deal with many buyers and many exporters. Small and medium buyers do business through buying agents as they cannot afford to open a buying office because of the low volume of business. The orders will be in the name of exporters only. Though an exporter may deal with buyers directly without buying agents after the first business deal but still buying agents are very much helpful to both the exporters and buyers for various reasons. The functions of a buying agent are as follows –
- Order placing and follow up.
- Normally they do not do any approvals.
- Accompanying buyer while their visit to their country.
5. Job Workers:
The job workers are the persons who do only the productions functions. They have own production facilities and do not have any IEC number. They do business on unit rate or piece rate basis. They do not know much about the buyers and they do not deal with buyers directly. Now a day job work is being done for almost all the processes in the apparel industry such as knitting, dyeing, printing, embroidery, CMT, inspection etc.
These are the persons who supply the raw materials and accessories to the exporters. They may be the suppliers of yarn, fabric, sewing thread, machinery and spare part, services like logistics, documentation, banking etc. The selection of suppliers is a vital factor for an apparel exporter. An exporter should select a supplier who is reliable and a reputed one.
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Founder & Editor of Textile Learner. He is a Textile Consultant, Blogger & Entrepreneur. He is working as a textile consultant in several local and international companies. He is also a contributor of Wikipedia.