How To Choose The Best Garments Stock Lot Seller in Bangladesh?

Bangladesh is the 2nd largest garment exporter in the world. In the financial year from 2022 to 2023, the export value of ready-made garments (RMG) in Bangladesh amounted to approximately 47 billion U.S. dollars. This was an increase from the previous year, in which RMG exports in Bangladesh amounted to 42.6 billion U.S. dollars. (Source: Statista)

For many reasons, producing this enormous amount of ready-made garments with 100% accuracy is impossible. In recent years rapid advancement in sewing machine technology and years of nourishment in the skills of direct workers have changed the scenario to a large extent. 

The efficiency of sewing machine operators and quality professionals has also developed equally. This has reduced the errors in ready-made garments and, eventually the amount of garments that are considered unskippable due to lack of quality and desired standards.

As buying and selling of surpluses and over-produced ready-made garments is discouraged and even restricted by law in some cases, it is quite difficult to determine the size of stock lots garment trades. It can be somewhere between 5%-7% of the total RMG industry size. The total amount that stands for the Stock lot Garment industry may range between 2.5-3 billion U.S. dollars.

What is Stock Lot Garment in Bangladesh?

To understand the concept of stock lot garments clearly, it is unavoidably important to understand a little bit about the garment industry and the way the production cycle revolves and determine the standard and quantity of garments production in standard factories. The process of producing garments in bulk starts with developing samples. 

This process is often done by the sourcing team of international garment importers. Factories with expert sample teams have proven the ability to develop samples that align with the standards of buyers (this is the term actually used in the Garment Industry that refers to the importers).

The standard cycle of garment production includes below steps,

1. Receive Tech pack from Buyer
2. Price Quotation
3. Sample Development [ If price is confirmed by Buyer]
4. PO (Purchase Order) Received from Buyer
5. Submit PI from the factory
6. Buyer Open Master LC/TT
7. Submit Fit Sample
8. Receive comments
9. Make PP (Pre Production) Sample
10. PP Meeting
11. Bulk Production
12. Final Inspection
13. Shipment

In the 12th phase of garment production, a final inspection happens to ensure the standard quality of made garment product. Stocks form in this stage.

How the Garment Stock Lots Form?

If the ready-made garments fail the final inspection, they go back to the bulk production floors to make necessary rectifications. Depending on the errors found in the ready-made garment product it is rectified and re-offered to the Quality team of importers.

The process of quality checking usually defines the errors in three types,

1. Major Mistake
2. Minor Mistake
3. Critical Mistake

On the occasion of mistakes that can not be rectified, the lot of garments becomes a subject of rejection to ship. This is the main way that garment stock lot forms. There are a few other ways, such as

• Human work can not be 100% perfect even after taking standard and scientific initials to appease errors ready-made garments can be produced with faults. To prevent a shortage in the order quantity factories make a few percentages of the total order quantity extra to fill up the vacuum made by rejected garments.
• Though very rare it happens that buyer fails to receive deliveries because of many issues such as financial crises, natural calamities, or even conflicts with 3rd party supply chain management companies. These companies are often referred to as buying houses in the Garment Industry of Bangladesh. As some of the buyers need informative and logistic help to source RMG from Bangladesh they often defend such buying houses for a smoother sourcing operation.

As a brick-and-mortar industry many problems or completely forecasted may occur. In all these scenarios the garments already produced become stock lot. A new cycle starts here the cycle of Stock Lot Garment.

Supply Chain of Stock Lot Garment in Bangladesh

In many factories preferred by the choice of the buyer, the stock lot of garment products is destroyed in the presence of buying representatives or Buying QC (Quality Inspector working for a buyer). The core target of this is to preserve the brand value of the product that has been shipped. If not destroyed with or without concern of the buyer the garments in stock are passed through several hands before reaching its ultimate user the consumer,

• Stock Lot Buying Companies Collects Them From Factory
• Then it goes to mid-sized suppliers
• Mid-sized suppliers sell it to wholesalers
• Retailers Collect it from Wholesalers
• Consumers purchase and use the product.

As the industry is largely unregulated the loops in the chain may vary depending on the situation of purchase capabilities of different levels of suppliers.

Comprehensive Guideline To Choose The Best Garments Stock Lot Seller in Bangladesh

As we have discussed the chain now it is clear that each step increases the price of the product. However, there are some great advantages to collecting goods from the later suppliers of the ladder. We have discussed the 4 types of Garment Stock Lot Supplier in the coming section,

• Big companies or manufacturers deal with big quantities and often maintain secrecy when forwarding the stock. On many occasions, these companies lose interest in even selling them following the strict duplicity guidelines from buyers. As formed organizations companies prefer bank transactions which can be subject to tax and VAT. Here one thing is really important to understand not all stock lot garments sold by the companies are illegal or without concern of buyers. On many occasions, this procedure happens with the verbal or written consent of the buyer.

• Mid-size companies that don't collect goods from factories maintain less secrecy and offer more support to ship products. Though the price offered by these mid-sized companies is naturally higher than the main suppliers collect the goods from the factory.

The main disadvantage of the Big and Mid-Sized Stock Lot Suppliers is both the type of organizations offer goods only with the condition of inspection. That means that retailers or wholesalers have no chance to check each piece rather they are encouraged to make a purchase decision by inspecting it randomly. Things may get easier to understand with an example,

"30000 pcs of Denim Pants are available, 4-5 wash, Inspection only", this is how big suppliers offer the good. This means as a buyer you can only check a percentage or randomly some garments and make a decision to purchase with an assumption made depending on the quality of the pieces you have checked. The greatest advantage of purchasing from such suppliers is the price offered by them often as low as possible you can get things in the entire market. Their motto is always "Cheaper Price Compromised Quality".

• Wholesalers collect goods from both the first and second types of stock lot suppliers. The basic thing that distinguishes stock lot wholesalers from the first two is they are less export-oriented and rather they prefer to sell the collected goods to local retailers.
• Retailers positioned in the second-last position in the stock lot supply chain are the end sellers of the stock lot garment. In this stage, they collect goods from stock lot wholesalers with a condition of 100% QC which means they would be collecting garments from any one of the mentioned three suppliers only by inspecting each of the garments one by one. The price is always higher than the first three. However, the quality is always assured in this stage.

5 Quick Steps to Find the Best Garments Stock Lot Seller

When sourcing your garment inventory for online or brick-and-mortar fit shop there are some easy steps that will enhance the efficiency of your garment sourcing, they are mentioned in the section below,

     1. Understand Your Financial Capabilities

Determine the amount you want to invest in a garment inventory. If you are ready to purchase 1000-10000 pcs that is different from purchasing more than that. If you have a running business and an established customer base, you can invest up to 50% of your revenue. For new business, it should be crossing 25% and you should be making an inventory that targets a niche customer base. For example, if your inventory is targeted to satisfy women aged between 18-70 you may purchase 4-5 types of garment stocks that include different types of outfits but only for women.

      2. Consider the Conditions of the Stock Lot Supplier

There are many types of conditions applied by the garment stock lot garment supplier. As we have mentioned only by inspection or 100% QC. If you want to purchase bigger lots it would be quite rare to get them in condition of 100% QC. Rather you would be purchasing garment lots depending on an inspection done by quality experts you trust. They can be third-party inspectors hired daily basis or by the dedicated team employed by your organization. But, if the quantity is less you may get the chance to go with 100% from wholesalers or retailers.

      3. Physical Address and Legal Documents of the Garmet Supplier

As a developing country corruption is well-spread in each sector in this country. So before making a transaction make sure you or your delegates have visited the supplier's office and have information about the supplier. Depending on a third-party sourcing company and avoiding cash in any type of transaction can make things way easier and smoother for you.

      4. Ask About the Past Records of the Supplier

If you are dealing with a garment stock lot supplier for the first time consider asking about their past records similar to your goals. If you are not sure about the capability of the garment stock lot supplier check the legal documents they would need to perform garment sourcing operations. Such as past records of sourcing with real companies, trade licenses, permission to export, or even membership in  BGMEA or BKMEA.

      5. Prefer the Stocklot Garment Suppliers Accepting LC or TT

Transactions through banks enhance the financial decisions to be safe and benefit each party with better security. Especially, when you are sourcing the garment stock lot for outside destinations this is unavoidable to go with bank transactions. There is a bank called Export-Import Bank of Bangladesh PLC specializes in export and import banking.

Conclusion

With its reputation as the second largest garment exporter in the world, Bangladesh carries enormous opportunities to be a great place to source your garment inventory. When you can order your goods directly from the factories, collecting Stock Lot Garments reduces the need for paperwork and enables you to get world-class goods at a lower price. But as in every business, there is good and bad sides, sourcing Stock Lot Garment can be a daunting task without the involvement of local expertise and assistance.