The Solution To Cut Costs Is To Source Fabrics Online
ASIA’S BOOMING TEXTILE INDUSTRY
Apparel sourcing in Asia has been in existence for decades, with countries like Bangladesh, China, India, Thailand, and Turkey as the leading manufacturers of quality textiles. Big brands and SME retailers from across the globe depend on Asia’s supply for their apparel products mainly due to their high quality and low costs.
For years, Asian countries, especially China, has provided unparalleled supplies of high-quality textile materials to countries in the EU and the US. To control the unmonitored importation of fabric from China and to give equal opportunity to developing countries, the quota system of the Multi-Fiber Arrangement (MFA), was enacted by the World Trade Organization (WTO).
To better monitor major textile-producing countries, the WTO has classified apparel exporting regions under the following categories:
- Steady Growth SuppliersThis includes countries like China, India, Cambodia, Bangladesh, Vietnam, Egypt, and Pakistan which continue to increase their market share since the early 1990s.
- Split Market SuppliersCountries like Indonesia and Sri Lanka which have alternately decreased and increased shares in the US, the EU, and Japan belong to this group.
- Pre-MFA SuppliersThe lifting of the quota system after the MFA was halted brought forth a rapid decline in exports from countries like Morocco, Mexico, Tunisia, Thailand, and Canada.
- Past-prime SuppliersThis includes countries like Hong Kong, Singapore, Taiwan, Malaysia, South Korea, and the Philippines which have dwindling market shares since the early 1990s.
But after 30 years, the MFA, whose role was to establish quotas and tariffs on textiles imported by countries like United States, Canada, and those belonging to the European Union, was phased out by the WTO. This allowed larger manufacturers that offer lower production costs to push out smaller players in developing countries out of the game.
Since the removal of the quota system, Asia’s market share in providing low-cost exports has slightly declined due to political issues, logistical challenges, and tighter competition from other suppliers. Some retailers and fashion designers started to look for alternative sources like Africa for importing textiles.
Despite challenges, apparel sourcing in Asia remains to be in-demand primarily because of the wide variety of styles that suppliers in the region offer. China, for instance, has an area dedicated to manufacturing textile; Turkey also has climbed up to be the world’s 4th largest exporter of fabric in the world.
The explosive growth of fabric mills in some Asian countries has led to their dominance in the textile industry. And with the quota system removed, designers have become more practical by sticking with suppliers from these leading regions. Apparel brands may have little to no choice but to deal with the cost of doing business with these established dealers unless they find another one with a better offer.
But what if there’s a way to get in touch with more contractors that can provide more advantageous rates? What if you gain access to more information about alternative fabric dealers near your area, so you wouldn’t have to rely on international imports?
CUTTING COSTS BY USING FRONTIERMultiple factors are involved in the computation of the cost of producing a single piece of clothing. According to a report, raw materials and location of production accounts for 40% to 65% of the total cost of a finished product; logistics and importation/exportation tariffs are responsible for up to 20% of the final cost; labor represents up to 10%, and profits account for up to 15% of the total cost of the product.
Factors like local policies, transport procedures, infrastructure conditions, and economics must be accounted for in choosing where to source textile supplies. Working with a middleman will also further increase the cost, making it more difficult to be competitive and profitable at the same time. You have to think outside the box to gain a substantial competitive advantage in the textile industry.
Here are ways on how building your digital supply chain can drastically cut costs and increase business profitability.
The answer to better pricing, quality consistency, and shorter lead time is almost counter-intuitive — you want less suppliers, not more. let’s start with better pricing; when you can place more quantity per order to existing suppliers, wouldn’t that give you more bargaining power? Let’s scale it out, if you are a global brand and can place one giant order to one factory, isn’t that far better than splitting up an order to several factories? By consolidating your order types and quantity, factories become less prone to human errors, as a result, quality level will rise. When factories smooth out all the kinks in their production pipeline, you get better lead time. And it all begins from collecting data, when you source digitally, you start collecting supplier data and over time, it becomes a scorecard of your suppliers. You only get what you measure; if you start collecting the right indicators, you will get the results you want.
2) Save on alternative suppliers
Steady Growth Suppliers dominate the market due to their mass-production capabilities and relatively cheaper labor costs. As a business, it’s only logical to seek large suppliers that can commit to bulk orders. However, due to high demand, supply shortage isn’t uncommon.
One of the biggest problems of dealing with highly popular fabric mills is getting the sample textiles, much less the actual bulk orders, finished on time. Setbacks can happen as early as this stage and cause delays down the line.
A single day of delay can be costly to your business. A domino effect may impact storage costs, delivery charges, and overtime pays. There’s also the potential loss of first-mover advantage and failure to make a good market impression from botching the timing of the product release.
As a business, you might be constrained to deal with established manufacturers. But there are alternative suppliers where you can purchase fabric online with the help of Frontier. You don’t need to wait for your usual suppliers to refill their inventory at the cost of delaying your production.
3) Save on quicker prototyping
Traditionally, what you’ll do to create a prototype is to apply the selected fabric on a hand-drawn model of the apparel. It can be challenging to visualize a 3D model using a 2D perspective though, so disappointments aren’t uncommon when the prototype is delivered.
Producing several iterations of the same product until it fits the visualized creation is costly. Shipments can also become impractical if the manufacturing process is outsourced. There’s also the environmental impact of the waste materials produced during sampling, considering you haven’t gone into mass production yet.
You can take sampling to the next level by having it laid out using 3D garment visualization technology. With 3D images, you’ll have a 360-degree perspective on apparel designs that can help you decide whether the projected product captures the fashion idea you have.
Frontier has partnered with Virtuality.Fashion – an online platform where you can see the 3D prototype of your creations without the need to send physical samples. Just provide the digital swatches found on the Frontier platform and have them rendered into a 3D model of the apparel you had in mind.
This 3D visualization process eliminates logistical challenges in shipping and sampling garment designs. You’ll also save time because you can rapidly get your hands on a digital model you can easily alter for size measurements, color combinations, and styling details.
You won’t have to order yards of fabric and have them manufactured into a single clothing style in different colors just to visualize what the finished product will look like. You can just have one or two samples printed to get a feel of the actual textile. Once you’re satisfied with the sampled product, you can purchase the fabric online in bulk for mass production.
This method will save you tons of money and fast-track your prototyping and sampling process. You’ll also reduce wastage, carbon emissions, and stress, making your business more sustainable and scalable.
CONCLUSIONFabric sourcing online is not the future anymore, you can take advantage of it now with Frontier. Our platform is a good way to start collecting your suppliers’ data that belongs to you, wider visibility on alternative fabric mills in your area, and more efficient tools for prototyping and team management.
Whether you’re an apparel designer or a fabric supplier, you can benefit from the online platform of Frontier to expand your network within the textile industry. Sign up with us now or schedule a demo to know more about us.