Presentation on Merchandising

Garments merchandising means buying raw materials & accessories, producing garments, maintaining required quality level and exporting the garments within schedule time.. The risk is pa

GARMENTS MERCHANDISING

Prepared By : Mazadul Hasan sheshir ID: 2010000400008

13th Batch (session 2009-2013) Department : Wet Processing Technology Email: mazadulhasan@yahoo.com

Blog : www Textilelab.blogspot.com (visit)

Southeast University Department Of Textile Engineering I/A 251,252 Tejgaon Dhaka Banglade sh Prepared By :

Total Textile Process at a Glance

The “Merchandising” is known to the persons specially involved in

garments trade The term merchandising has been derived from the merchandise Merchandise means goods that are bought & sold.

The term “Merchandiser” may be defined as Person who

merchandises the goods, specifically for export purposes Garments merchandising means buying raw materials & accessories,

producing garments, maintaining required quality level and

exporting the garments within schedule time

Merchandising is the business art of matching goods to the needs

and preferences of customers to ensure shelf off take How a

product is presented, how much is displayed, and in what form, size shape, color, etc can determine the rate of speed at which a

product is bought.

In other words merchandising is the marketing activity responsible

for ensuring a product’s “desirability”, both qualitatively and

quantitatively This means that at the store end, your product has

to be perceived as “just right” by your market It is a whole lot of psyche satisfaction The personnel who acts the merchandising

activities is called “Merchandiser”.

Objectives of Garments Merchandising

1 To try to get garments order inquiry from buyer

through various sources

2 To find out the consumptions of fabrics &

accessories.

3 To make costing on the garments inquiry

4 Procurement of raw materials.

5 Follow up.

6 Regular correspondence with buyer, suppliers

and related personnel.

7 Help and follow up in commercial activities.

8 Arrange tests & inspections.

9 To do shipment.

Work flow of Garments

Merchandising

 To collect buyers addresses.

 To establish contact with the buyers sending formal letters/profile.

 Receiving buyer’s response and providing price quotation along with making of sample as

counter/approval.

 Receiving samples comments from the buyer.

 Receiving Purchase Order from buyer.

 To furnish the pro-forma invoice and sending the buyer.

 Receiving the master L/C & verify clauses of the L/C both in technical and commercial point

of view.

 To estimate time schedule for the exports of those garments as per L/C.

 To confirm floor booking of the order with factory.

 Taking necessary steps to develop lab-dips of the materials (FAB & ACC)

 To confirm transfer authentication of the L/C in favor of fact.

 Pushing the factory taking initial procurement to open the back-to-back L/C by bank.

 Searching reliable fabric and accessories sources and finalize supplying of the required

materials relevant to the order.

 To monitor the shipment of raw materials and arrival in the factory.

 To monitor of the supplying materials while receiving factory.

 To order the test cutting with quality.

 To check/inspect/advise for the bulk production.

 To monitor production, quality and delivery.

 To advise factory if buyer change any instruction both in technical/commercial point of view

Some Influential Buyer’s Name

 Calvin Klein

 Tommy Hilfiger

 Armani Exchange

 Dolce and Gabbana

 Mark and Spencer

Different Types of order placed

by buyers

 FOB(free on board) Order

 FOA(Free on Air) Order

 C& F(Cost & Freight) Order

 CIF(Cost Insurance & Freight) Order

 CIFC(Cost Insurance & Freight & Commission)

Order

 FOB: This is the export term of delivery and price quotation The

sellers send the goods for export and deliver them on ship The risk is passed from seller to buyer when the goods are loaded in the ship at the port of departure The buyer paid the freight charges The seller doesn’t include the freight charge with his costing.

 FOA: The supplier delivers the goods to the air Carrier at the air port of

departure, the buyer bear the risk from that moment and pays the air transport cost The seller bears the cost of materials and making,

doesn’t include air freight.

 C&F: The sellers send the goods for export & pay the freight charge

and deliver them on ship The risk is passes to the buyer when the

goods are left the port of departure as buyer recommends the

shipping line.

 CIF (Cost Insurance & Freight): The seller ensures the goods against

loss and damage at his own cost.

 CIFC(Cost Insurance & Freight & Commission) : The seller includes the

cost of insurance, freight and commission for local buying house.

TIME AND ACTION CALENDAR

Normally merchandisers prepare a

plan in a spreadsheet listing down key processes in one column and planned date of action for each process is noted

in another This planning sheet is

called time and action calendar Once TNA calendar is made, merchandiser

can easily list down her daily 'to do

list' for the day and start doing work

one by one According to TNA schedule processes are executed on daily basis

to track whether an order is on track

or getting delayed

T&A Calendar

The samples decide the ability of an

exporter The buyer will access the exporter and his organization only by the samples If the samples are of good quality and with

reasonable price naturally the buyers will be forced to place the order So it is essential

that the samples should be innovative and with optimum quality The purpose of

sampling is not only to get bulk orders and also give some additional benefits to the

exporters By doing sampling the exporter can estimate the yarn consumption for

developing the fabric, a clear idea on costing more ever the manufacturing difficulties.

 Proto Sample: This samples are proto type of new design created by

designers This is the first sample in product development stage Proto sample is made to communicate the design of a style or a line or to

present garment structure In proto samples fit and fabric detailing is not been considered.

 FIT Sample: Once proto sample is approved, FIT is being made with actual measurement Modification on the pattern is done to get desired fit of the garment FIT is one of the most important factor to be considered during sample development FIT sample is being tested on live model or Dress form for to verify garment fit and fall

 Salesman Sample: Salesman samples are made to put on display in the retail showroom Salesman sample (SMS) are displayed for assessing

customer's feedback and according to customers response buyers forecast demand of an particular style Sales samples are made with actual fabric and trims and accessories Buyer pays for salesman samples to the

developer.

 Size set Sample: The purpose of the size set is to check fit of the

garment in different sizes In this stage factory develops samples in multiple sizes Generally, buyers ask size set sample in jump sizes, like S, L, XXL Buyer check size set sample and give feedback to

factory if anything need to be corrected

 Pre-production Sample: All the above samples are made in sampling

department Buyer wants pre-production sample (PP sample) to be made in actual production line, so that operators know what are they going to make This sample is made with actual fabric, trims and

accessories and made by sewing line tailors PP sample must be

approved by buyer or buying house merchants (technical persons) prior to proceeding actual production

 Shipment Sample: When style is being finished and packed for

shipment, 2-3 finished and packed pieces with all packing details are kept for future reference Shipment sample is kept by factory

merchants and buyer's merchant The approved shipment is sent

directly to warehouse and merchants at the buyer do not get

garment out of the shipment That is why they keep shipment sample for future reference.

Consumption & Costing

Knit garments consumption:

{(Body length + Sleeve length +

Sewing Allowance) X (1/2 Chest

+ Sewing Allowance)}X 2 X GSM X 12 /

10000000 + Wastage (For 12 pcs of garments)

Woven Garments Consumption:

Fabric Consumption:

Formula = Length X Width / Fabric width X

Fabric Unit

Cost of Manufacturing (CM) Calculation:

COST OF MAKING (CM) ={(Monthly total

expenditure of the following factory / 26) / (Qty

of running Machine of your factory of the

following month) X (Number of machine to

complete the layout)} / [{(Production capacity per hr from the existing layout, excluding alter

& reject) X 8}] X 12 / (Dollar conversion rate)

CBM calculation:

The cubic volume occupied by a shipment in

Cubic Meters is referred to as the shipments

CBM To calculate CBM we first need to know the length, width and height of the carton in cm If carton measurement is in inch, we have to

convert measurement in inch Simply multiply length, width and height to find cubic

centimeter and divide by 1000000 to find cubic meter (CBM) formula as follows:

CBM= (LENGTH in cm X WIDTH in cm X HEIGHT

IN cm/1000000)

Booking is the order sheet given from the

manufacturer to the suppliers After getting the master LC from the buyer the manufacturer,

Merchandisers are supposed to make the

booking and send the suppliers By booking

merchandisers procure the raw materials e.g fabric, accessories and trims

Fabric booking:

Knit fabric booking is done mentioning the following criteria:

Composition: 100% cotton, 95%

cotton 5% spandex etc

Construction: S/J, 1x1 rib etc

GSM: 140 gsm, 180 gsm etc

Quantity in Weight: e.g 5000 kg

Color: Red, White, Blue etc

Fabric Booking

Woven fabric booking is done

mentioning the following criteria:

Composition: 100% cotton, 95%

cotton 5% spandex etc

Construction: e.g 40 X40 /120 X 60 Width: e.g 44”, 46”

Quantity in length: e.g 10000 yards Color: Red, White, Blue etc

Accessories Booking

Follow up and updates

Regular and timely follow ups are

important to ensure that everybody

involves in the execution of the style is

updated and is performing his / her

activities on time.

A merchandiser should plan his / her day based on the time and action activities

that are due for the day Ideally the

merchandiser should look at the activities the are due for the coming 2-3 days and should start his follow up accordingly.

Merchandiser’s follow up tasks:

1 Product Package Analysis for Merchandising Follow up and Procurement Planning.

2 Preparation of Time and Action Calendar for Merchandising Follow up.

3 Follow up of all BB L/C on receipt of Master L/C in respect of Yarn, Knitting, Dyeing, Printing, Embroidery, Value-addition works and Accessories.

6 Follow up of Procurement of Yarn Fabric and accessories.

8 Follow up of Lab-dip Preparation, Submission and Approval.

10 Follow up of Dyeing, Finishing.

11 Follow up Cutting in respect of Production and Finishing

requirement.

12 Follow up of Accessories Development, Submission,

Approval, Procurement and Inventory.

13 Follow up of all Samples, Pattern Correction, Graded Nest, Size Set and arrangement of Pre-production Meeting.

14 Follow up and Arrangement of all Inspection as per Buyer’s requirement.

15 Follow up of all Lab-Test of Garments and Accessories.

16 Monitor Final Inspection and Transportation of Cargo to Port with proper Load Calculation on time.

17 Monitor submission of Documents and Realization of

Payment as per shipped qty and approved price.

Third party inspection companies:

AQL:

AQL is Acceptable quality limit A statistical

measurement of the maximum number of

defective goods considered acceptable in a

particular sample size If the acceptable quality level (AQL) is not reached for a particular

sampling of goods, manufacturers will review the various parameters in the production

process to determine the areas causing the

defects AQL chart is used to inspect garments.

Commercial documents

 Proforma invoice (PI)

 Purchase order (PO)

 Bill of lading

 Insurance document

 Certificate of origin

 Packing list

 Air way bill

 Commercial invoice etc

With this payment method, the exporter can avoid credit risk, since payment is received prior to the transfer of ownership of the goods There are three types of cash- in advance- payment method: wire transfer, credit card, and payment by check.

Letters of Credit

Letters of credit (LCs) are among the most secure instruments

available to international traders An LC is a commitment by a bank

on behalf of the buyer that payment will be made to the exporter provided that the terms and conditions have been met, as verified through the presentation of all required documents The buyer pays its bank to render this service An LC is useful when reliable credit information about a foreign buyer is difficult to obtain, but you are satisfied with the creditworthiness of your buyer’s foreign bank An

LC also protects the buyer since no payment obligation arises until the goods have been shipped or delivered as promised The letters

of credit can take many forms: irrevocable or revocable, confirmed,

or special (transferable, revolving or standby).

Documentary Collections

A documentary collection is a transaction whereby the exporter entrusts the collection of a payment to the remitting bank (exporter’s bank), which sends

documents to a collecting bank (importer’s bank),

along with instructions for payment Funds are

received from the importer and remitted to the

exporter through the banks involved in the collection

in exchange for those documents Documentary

collections involve the use of a draft that requires the importer to pay the face amount either on sight

(document against payment—D/P) or on a specified date in the future (document against acceptance—

D/A).

Open Account

An open account transaction means that the goods are shipped and delivered before payment is due, usually in 30 to 90 days Obviously, this is the most advantageous option to the importer in cash flow and cost terms, but it is consequently the highest risk option for an exporter Due to the intense

competition for export markets, foreign buyers

often press exporters for open account terms since the extension of credit by the seller to the buyer is more common abroad Therefore, exporters who are reluctant to extend credit may face the possibility of the loss of the sale to their competitors.

Merchandising is undoubtly the most impostant section of a garments industry Merchandisers coordinates between all the sections So a good garments merchandiser should have concepts about every section of the textile

1 Yarn Manufacturing Technology