Merchandising Analysis

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Garments Merchandising: Garments merchandising is the combination of some works like, buyer development, order collection, pricing, sample developing; approval of samples, raw materials, accessories & documentations; production, quality control and delivery of garments in due time and collection of payments.

Merchandising: The term merchandising may be define as, person who merchandises the goods, specially export purposes. Garments merchandising means buying raw materials and accessories, producing garments, maintaining required quality level and exporting the garments within scheduled time.

Quality of a merchandiser

· Should be hard working.

· Should be responsible for work.

· Should not be bureaucratic but democratic.

· Must have knowledge in computer literacy specially E-mail, website, internet, browsing, Ms-word, Excel, PowerPoint etc.

· Good command in English.

· Should be smart but not over smart.

· Should be able to work intelligently.

· Should have ability to improve public relation.

· Should have well-behave personality.

· Should have capacity to motivate people.

· Should have good knowledge on calculation.

· Should have adequate knowledge about recent development in RMG sector.

· Should have knowledge about production.

· Should have knowledge about quality of garments.

· Should have knowledge about machines and their operations.

· Should have knowledge about fiber, yarn, fabric, weaving, knitting, dyeing, printing, finishing, color fastness, etc.

· Should have knowledge about raw materials and garments inspection system.

· Should have knowledge about customs regulation, vat, tax, duty, etc.

· Should knowledge about air lines, shipping, banking, documentation, etc.

· Should have knowledge about accessories.

· Should have knowledge about time action plan.

· Should have knowledge about compliance, etc.

Responsibility of a merchandiser:

1. Sourcing of buyer & send a factory profile to buyer.

2. To negotiate the price for the seller, if the price is high then it less chance to get the order; on the other hand if price is low then there is a chance to incur loss for the factory. So it is a risky job for a merchandiser and have to remember it.

3. Have to give more competitive price without compromising the quality.

4. They have to maintain good relation with the buyer for getting more business in future.

5. Have to purchase all material (fabric& accessories) within in competitive price for making the garments as per buyer instructions regarding quality.

6. To execute the order within limited time i.e. timely delivery or shipment, otherwise buyer will not accept it; it will be a big loss for a factory etc.

Helping hand for a merchandiser:

1. Production manager.

2. Pattern master\manager.

3. Accountant.

4. Quality control manager.

5. Commercial manager, etc.

Fabric purchasing knowledge for a merchandise

  • Composition of fabric.
  • Fabric construction.
  • Yarn count (warp & weft).
  • Width of fabric.
  • Woven by shuttle loom or shuttle less loom.
  • Types of dyeing: vat dye, reactive dye etc.
  • Color fastness: wet, light, rubbing, iron, etc.
  • Piece length of roll.
  • AQL maintain.
  • Fabric finishing: pre-wash, softened, shrinkage (<3%).
  • Specially finished: water repellent (WR), water proof, resign finish, permanent press (iron), crinkle, etc.
  • Fabric strength (warp & weft way).
  • Types of knit.
  • G.S.M.
  • Types of packing.

· Shipping mark (country name, factory name, address, quantity, number of carton etc.).

Main factors of pricing:

· To calculate the needed quantity of fabrics (fabric consumption).

· To calculate the needed quantity of accessories (accessories consumption).

· Fabric sourcing.

· Accessories sourcing.

· CM costing.

· Profit adding (5-10%)

· If C & F (cost & freight) price, then costing of freight.

· If CIF (cost insurance freight) price then costing of insurance etc.

Flow chart of merchandising:

Time requirement (approx.):

1 month for getting order (up to L / C received)

1-1.5 month for materials procurement.

1-1.5 month for production.

1 month for getting payment.

Total = 4-5 month

Types of order:

1. FOB(Free on board)

2. FOA(Free on air)

3. C&F(Cost & freight)

4. CIF(Cost insurance freight)

5. CIFC(Cost insurance freight & commission)

6. CMT(Cutting, making & trimmings)

7. CM(Cutting & making)

8. CPT(Cost pay to)

9. FC(Free carrier)

FOB (Free on board): This is the export term of delivery & price quotation. The seller sells the goods for export and delivers them on board (ship); the risk is passed from seller to the buyer when the goods are loaded in the ship at the part of departure. The buyer pays the freight charges. The seller doesn’t include the freight charges with his costing.

FOA (Free on air): The seller sells the goods for export and delivers them to the air carrier); the

risk is passed from seller to the buyer when the goods are loaded in the aircraft. The buyer pays the plane fair. The seller doesn’t include the air freight charges with his costing.

C&F (Cost & freight): The seller sells the goods for export pays the freight charge also and delivers them on board.

CIF(Cost insurance freight): This is the identical to the C&F term except that in addition the seller insure (pay the seller) the goods against loss and damage at his cost.

CIFC: The seller includes the cost of insurance freight and commission for local buying house.

CMT (Cutting, making & trimmings): In this case the buyer fixes the rate of CMT only with factory. So the seller doesn’t include the price of fabric with his costing. But at L / C buyer gives all money to factory. Factory collects only CMT money from bank. Balance money return to the fabric supplier. The ordering system is following the tailoring shop.

CM (Cutting & making): In this case the buyer fixes the rate of CM only with factory. So the seller doesn’t include the price of fabric and trimmings with his costing. But at L / C buyer gives all money to factory. Factory collects only CM money from bank. And balance money return to the trimmings and fabric suppliers.

TT (Telephonic Transfer) order: When order quantity is very short and need urgent delivery, in this case buyer gives purchase contract instead of L/C. And sends money to seller bank by TT .After getting money seller sells the goods to the buyer. (Stock lot.)

Sub contract order: It is indirect order. The order is received by another factory. And when it is not possible for that factory to complete the whole production within the time, in that case they share the order with other factory by giving sub contract. The sub contract factories only get CM charge by local currency from the order taker (Main supplier).

Exchange order: In this case the buyer does not pay any money against buying garments from Bangladesh; instead of money they are giving us another goods or product which is surplus in their country but we need it very much. This type of business is very rare. They use L/C for doing this type of business.

Fabric consumption

The main cost of a garment depends on the cost of fabric; if fabric consumption is high then garments cost will be higher. But garment cost will be lower if fabric consumption is less. So a merchandiser has to be very much careful to calculate the fabric consumption.

Type of fabric consumption:

    1. Consumption by A = B + C formula for tops (Woven shirt, Polo shirt, etc.)

When A = consumption of a shirt.

B = (E × F) × 2

C = (G × H) × 2

E = Length of the shirt from HPS(High point shoulder)

F = Half chest

G = Sleeve length

H = Arm hole (Circumference)

Again, E = E + 2″(Allowances for collar and sewing)

F = F + 1″(Sewing allowances)

G = G + 2″(Allowances for cuff & sewing)

H = H + 1″(Sewing allowances)

Allowances are variable according to style.

Example-1. If the length of a shirt is 30″, half chest is 24″, arm hole (circumference) 20″ and sleeve length is 21″. Then how much fabric is needed to make the shirt?

Solution: Here, E = 30+2 = 32″

F = 24+1 = 25″

G = 21+2 = 23″

H = 20+1 = 21″

Now we can write, B = (32 ×25) ×2

= 800 × 2

= 1600 sq. inches

C = (23 ×21) ×2

= 483 ×2

= 966 sq. inches

Now, A = B + C = 1600 + 966 = 2566 sq. inch

Example-1.1 If fabric width is 45″ then how much yard will be needed for making this shirt?

Solution: 1 yard =36 × (45-1)

= 1584 sq. inch

So needed fabric = 2566÷1584

= 1.62 yd./ pc

=1.62+5% (Wastage)

= 1.70 yd / pc

2. Consumption by P = M × N × 4 for bottom (Pants, Shorts, etc.)

When, P = Consumption of a pant

M = Length of a pant

N = Half thigh of a pant

Again, M = M + 4″(Allowances for the waist band, hemming, sewing etc.)

N = N + 1″(Sewing allowances)

Example-2 If the length of the pant is 42″ and half thigh is 14″, then how much fabric is needed to make the pant?

Solution: Here, M = (42 + 4) = 46″

N = (14 + 1) = 15″

Now, P = 46 × 15 × 4 = 2760 sq. inch

Example- 2.1 If fabric width is 60″, then how many yards is needed to make the pant?

Solution: 1 yard = 36 × (60-1) = 2124 sq. inch

So needed fabric = 2760 ÷ 2124 = 1.299 yd/pc

= 1.299 + 5% = 1.36 yd/pc

Packing types:

a. Solid color solid size (One color one size).

b. Assort color solid size(Multi color same size)

c. Assort size solid color(Different size same color)

d. Assort color assort size(Multi color different size)

GSP (Generalized system of preference): Importer countries(Europe, Canada, etc.) if duty draw back to exporter country(Under developed country) if they use local fabric. EEC importer get 12% duty rebate.