This article is being
written prior to the CAFTA vote in Congress, and I will not speculate on the
outcome. However, with the Free Trade Agreements (FTAs) in place as of this
date, I will state that the sun does not rise and fall on China
With all of the
variables like safeguards, anti-dumping, quotas, protectionist legislative
bills, export restrictive tariffs on U.S. products, monetary currency
valuations, bi-lateral trade restrictions, political unrest in many nations,
and consolidation of large retailers, among many others, you must seek
alternative sources for your products.
You must do your
homework and determine how you can remain competitively priced and still
deliver quality of specifications and on- time delivery.
You should find out
which countries have the raw materials (or can easily obtain the necessary
materials) to build your product.
You must find out if the
FTAs are applicable and/or which restrictions might be major problems.
You must understand and
have all of the applicable FTA rules and regulations. Do not assume that
one agreement for one region is applicable to another.
You must profile the factories and the agents with the due diligence of a
criminal investigator. This is not done over the lavish dinners you will be
invited to; these dinners are how they check you out! On-site complete
profiling is required, as well as checking references.
Your professional instincts, after you gather the facts, will most likely be
the main factor for the
Yes or No
Do not try to make a 'silk purse out of a sow's ear enough said!
Make sure your infrastructure is professional and understands not only the
manufacturing, quality control, work in process, logistical and
documentation processes, but also the cultural differences and cultural
communications required when dealing in different countries. We joke about the
language of the GARMENTO, and this is somewhat a truism, but good
communication is an art and must be translated into mutual understanding.
Remember the old game of telephone and how the message had changed totally
by the time it reached the last person!
For sourcing, look at
Sri Lanka, Mexico, Central America and Dominican Republic, Chile, India,
Thailand, Bangladesh, African, AGOA countries, the Jordan Free Trade Zone,
Turkey and others.
It is not an easy
process, and we all want to continue with the vendors we have trained to
deliver our product. However, there is nothing so permanent as change, and
with the WTO in a non-cooperative working mode, even having trouble holding
a meeting, we must source continually, and teach and train constantly. Like
the soap opera As the World Turns, sourcing continues to change daily.
In addition to
merchandising, design, sales and marketing, you must put the time, effort
and monies into the back end, production and finance, in order to satisfy
the needs of your customers.
You must do your summer
homework now, and make plans that are flexible and can change according to
the many variables. I am getting stories and
calls daily. My broker tells me I have to pay duty on supposedly
I need a visa.
My accountant tells me I am
entitled to a drawback, but he does not know how to obtain it. The lowest
price from your professionals is not always the best value. Understanding
the risk factors and having the knowledge to evaluate potential problems are
the qualities you need in these changing times.
So, do not let lightning
strike you and cost you relationships and lost profits, by thinking that the
lowest price is the only thing you should consider. We at Stonefield
Josephson have over 100 years of experience in the textile and apparel
industries. We are not the lowest priced, but we are the best.
Bruce S. Berton is a business and management consultant with Stonefield
Josephson, Inc., a leading regional consulting and accounting firm with
offices in Santa Monica, San Francisco, Walnut Creek and Mexico City.
The information in this column is of a general nature. Readers
inquiries are welcome; and may be sent to Bruce Berton, at Stonefield
Josephson, Inc., 2049 Century Park East Suite 400 Los Angeles,
California 90067 310-432-7437 Direct
866-225-4511 Toll Free
310-432-7519 Fax Los Angeles
Hong Kong, or send an e-mail to: