Buyers & brands claim that they offer lot of support to their vendors, be it raw material sourcing, training, worker welfare initiatives or allied issues which generate from time to time… How supportive are buyers in today’s challenging time, considering that they too are facing many market pressures? Have you got any support from buyers in recent months? What kind of support do you expect from buyers in today’s context?
MD, Exel Sourcing Company, Tirupur
Few buyers and brands do support us by means of offering sourcing solutions and some of the welfare initiatives. But still the challenges we face are quite extensive…, particularly in this post-GST era, when we are also sailing against the wind as we don’t have the drawback facilities as we used to have earlier. GST refunds are not yet regularised. Having to shoulder these internal issues, we expect little more support from customers in understanding the situation. But if we look from their perspective, they compare Indian suppliers with other GSP countries’ suppliers and are trying to get the prices agreed upon which are really difficult. Price comparison could be done if we have a level playing field. In this front we expect more genuineness from customers in understanding the supplier’s difficulties. Moreover, we would be happier if they give us a visibility of their sourcing for next 6 months so that we can align our resources accordingly. We have to take a tight balance between ‘Costing, Compliance and Competitiveness’. These 3Cs are very important for both the suppliers and the buyers where both have to stretch their hands to get a win-win situation.
Tridev Sadh, Director, VRT Exports, Noida
I would say that the scenario is quite reverse to your statement as buyers are not supporting while we (the suppliers) are supporting them a lot. For example, I can give three examples: we have reduced our MOQ, increased the credit time and eased the terms. We are anyhow managing all the expenditure of compliance and allied services while our margins have reduced and export benefits are almost nil now. Earlier we used to have normal MOQ of 1,000 pieces which is now less than half, that is, 400 pieces. Earlier boutique buyers were having normal order of 100 pieces which is now even of 20 pieces. Similarly, we had the system of 30 per cent advance and rest on completion of shipment. But now advance is almost nil and even in some cases, we receive payment after 2 months of goods being delivered.
I don’t see that there is any strong reason that buyers will support us; they are also under pressure, so why they will change their way of working or will offer any ease for us. They have many options as a particular exporter/vendor will not serve buyers with some extra support; there are many more exporters/vendors to support them.
Aseem Kumar, Director, Fashion Images Overseas, Jaipur
There is as such no support, and I feel that mutual trust is losing which is not a good sign. God forbid, but it is last season when we have little bit of any kind of support from buyers. Now they are exploring other sourcing countries; so next season will be more difficult for us. Many of the buyers have trust on us due to long-term relations and our good working knowledge. But they do not have the same expectation from our Government as official decisions, coming one after the other, are going against the apparel exporters. Buyers are not even giving advance as they have fear, lest some change in policy or decision occurs which will not be in the favour of exporters.
Pranav Ghelani, MD, Sumangalam Exports, Mumbai
We agree that market pressures have increased significantly for retailers in Europe and US. Likewise,
Indian manufacturers too have to battle challenges of increasing raw material prices, labour issues, compliance costs, reduced incentives, and a stronger rupee. In such a scenario, we expect the buyers to appreciate the association that was built over a time, and treat long time vendors as their ‘partners’, instead of just ‘suppliers’. Unfortunately, we see that buyers and brands are undermining the value of such relationships and tend to switch suppliers or the sourcing country for few cents lesser in price. When yarn prices decrease or the value of their currency increases, they are quick to ask for price revisions. We expect the buyers to value all the efforts put in by vendors to ship quality products in a
timely manner in the past and maintain the order flow as best as possible. If there is any price concern, they should honestly discuss it so that a solution can be found, instead of switching suppliers.
Ankur Kakkar, Proprietor, Kaiser Enterprises, Delhi
Buyers are too supportive.
They are well aware about the Indian system of working and give delivery dates based on vendor’s info of 120 to 140 days from the date of order. Often, they keep 2-3 week’s, margin with them. In case of delays which are usual, they do not insist on air deliveries, rather give extensions to them which save suppliers. Additionally, when it comes to sourcing, they often help in sourcing trims from China or purchase them and send to vendors for application on the product.
Shivinder Sharma, Director, Active Sports Industries/Kasturi Lal and Sons, Meerut
It is a very big issue and has many aspects, needs or areas of expected support which may vary for different manufacturers and exporters. I must say that if payment is sure and made on time, it is one of the major supports. It is a very tough time to give credit after demonetization and GST…
Due to delay in payments, sometimes it becomes too difficult as we can’t clear payments for raw materials, labour and other expenses.
The Government should make it mandatory to pay payment of supplies in a specific time or create some such system. This will ultimately be better for future business and ensure growth of the industry.
Sarthi Sawhney, Director, Bright Star, Delhi
We must understand that ‘buyers’ are a very diverse group of the apparel community, just like the suppliers, buying agents and so on. Some buyers are helpful to the point that the support is not ‘support’, but more of an obligated change to the organization’s systems to bring in uniformity with the buyer’s organization systems as suppliers are evaluated and reviewed based on how much input is utilized. There are also moments where their help proves costly to the company and even onto themselves; for example, nomination of such suppliers (fabric or trimmings suppliers), cargo agents, etc. who are expensive and become difficult to work with. Buyers may be facing difficulties in their markets but must realize that the answer to those difficulties does not lie in claiming debits to their suppliers or passing on expenses onto them. The buyer-supplier relationship must be remembered as a B2B one and not a B2C one, as it is often misunderstood. Further help and support to issues should not be in the form of PPTs and emails with manuals on how to work, but more after meeting faceto-face and keeping an open mind about the realities present, and then developing ideas and solutions together to solve the problems.
Yatish Moncourt, Director, Francis Wacziarg, Noida
Yes, they are right, but the extent of support varies from buyer to buyer. Many of them have their own nominated raw material suppliers including labels & tags, because of which, we save time in getting the approvals. Apart from this, we are, more or less, safe about their quality as well. Some of our buyers like Intersport, Umbro, etc. arranged for the training programmes on social compliances, etc. in collaboration with 3rd-party trainers. Apart from the buyers themselves, the buying houses like us, play a vital role because we know the pulse of our vendors. Most important of all, the support we received from our buyers in recent times is the price upcharge. It is not that many of the buyers are working with hefty margins, but they did it to financially support their suppliers when the Indian Government reduced the drawback rates substantially and working capital got blocked due to policy changes.
Apart from the price upcharge, many of our buyers also extended the delivery dates to manage with production disturbances, especially with regard to the raw material, etc. We only need the best price. We know that some of the buyers are shifting the orders just for the sake of saving few pennies. We expect that the buyers should not go somewhere else for this reason. Guaranteed regular business helps us in negotiating better prices with the raw material suppliers and in capacity planning. Regular and continuous work helps us in minimizing the labour attrition, besides the skill level of the factory can also be maintained optimally. Support in the form of speedy approvals without any undue delay, is also very important to maintain the production planning and thereby to meet the delivery schedules.