Sourcing 2

Dhyana van der Pols

SOURCING & CALCULATIONS: MARKET ENTRY HOW TO BE PREPARED? Sourcing- design- product calculations

Sourcing & Calculations Content 1. Product Calculations: Collection Diamond 2. Trade offer: Product & Sales Structure

1. Product Calculations 1.1 1.2 1.3 1.4

Bottom up calculating Top- Down Retailer Price Brackets/ Categories Your sample collection

Product Calculations 1.1 Bottom up calculating • • • • • • • • • • • • • •

Fabric+ consumption Trims Accessories Packing Washing Embroidery Bank & Handling Payment conditions: f.i. 10 days 4% Delivery Conditions: DDU- In warehouse/ at border 5% unforeseen 2% seconds- defects Profit margin Agent fee or trade channel fee Final price

Product Calculations 1.1 Bottom up calculating • Costing sheet calculation assignment 1. Trouser

1. Product Calculations 1.2 Top- Down: Mark-up • Importing Wholesaler: + 25%-40% Importing Manufacturer : Buy at 10 Euro; sell at 17; in store at 59,95 Euro • 59,95: 3,4= 17,6x 40% minus= 10,5 Euro • Retail Chain Group + 45%-55%

1. Product Calculations 1.2 Top- Down: Mark-up 59,95:3=19,9 retailer mark up between 2,63,4 19,9:1,7=11,7 importer/ wholesaler mark up 11,7:12%import duties=10 10 minus CIF/ air shipment=8,50 8,50 including 15% GM= 7,3 manufacturing cost

Product Calculations 1.2 Top- Down Exporting manufacturers Importing Wholesalers

Importing Manufacturers

Importing Retailers Department Stores

Clothing multiples

Home Shopping companies

Selling and/or buying houses

Non importing retailers

Other retailers

Agents

Product Calculations 1.3 Retailer Price Brackets/ categories Collection Diamond

Product Calculations 1.3 Retailer Price Brackets/ categories Collection Diamond Basic NOS15%

Core collection

Profile 6-14%

Basic 20% Core

concept 45-58% Collection Diamond vBasic: NOS: never out of stock: Service Products vCore: mainstream collection: concept vProfile Items: trends+ window stoppers

Product Calculations 1.3 Retailer Price Brackets/ categories Collection Diamond Collection Diamond vBasic: NOS: never out of stock: Service Products vCore: mainstream collection: concept vProfile Items: trends+ window stoppers

Basic NOS15%

Core collection

Profile 6-14%

Basic 20% Core

concept 45-58%

Basic: T shirt long/short sleeve/ round/ V neck 5 pocket twill trouser Basic jeans in 4 waist/ 2 inseam sizes Stock service products at non seasonal prices Fixed retail value T shirt: 9,95-19,95 5pocket Twill: 39,95-49,95 Jeans at 39,95

Product Calculations 1.3 Retailer Price Brackets/ categories Collection Diamond Basic NOS15%

Core collection Basic 20% Core

concept 45-58%

Profile 6-14%

Core concept: Thematic fashion actuals: seasonal collection 4-6 times a year Identity collection; fashion statements, seasonal colors, all relevant style details Divided over themes and color cards

Product Calculations 1.3 Retailer Price Brackets/ categories Collection Diamond Basic NOS15%

Core collection Basic 20% Core

concept 45-58%

Profile 6-14%

Profile items Catwalk styles, Window stoppers, Trend setting/ adapting; “style lab” Diesel f.i. Communicating you are up to date and informed and able to translate design elements in RMG

Product Calculations 1.3 Retailer Price Brackets/ categories v Basic: NOS: bigger volume- repeat orders: small prices: commodity v Core collection: big sample collections, sales men samples, showroom selling; no repeats- max. 3000pcs per style: mid price level: profits above 10% v Profile items: small series, luxury part of collection: GM 15%+

Product Calculations 1.3 Retailer Price Brackets/ categories Example: WE GROUP v v v v v v

Basic T- shirt: 9,95 Basic polo: 19,95 Basic shirt: 19,95 Basic trouser: 39,95 Collection: 49,95/ 59,95/ 69,95 Profiled Items: 89,95, 119,95, 139,95

Product Calculations 1.3 Retailer Price Brackets/ categories Collection Diamond Basic NOS15%

Core collection Basic 20% Core

concept 45-58%

Profile 6-14%

Your sample collection

First determine which part of the diamond is yours to shine

Product Calculations 1.4. Your sample collection Collection Diamond

vUp to date – trend following for mainstream customers

Basic NOS15%

Core collection Basic 20% Core concept 45-58%

Your sample collection should be:

Profile 6-14%

vContain the season style elements vRight color: seasonal vRight fashion fabric/ print/ texture vRight accessories: zips, puller, drawstrings, labels!!, buttons vRight washing

Product Calculations 1.4. Your sample collection v v v v v v v v v v

Should be labeled properly with: Date Style number/ reference customer Client code Size, pattern code Collection reference: theme winter 2007 Your address data/ contact data Fabric code, description Washing Code if applicable Optional Price Optional Delivery conditions

2.1 Sales Structure: Chains/ Channels & Commissions

• Agents/ Local buying houses: 7-12% on product price or CMT price • Agents: independent: min. 10% + bonus • Agents: selling capacity: 5% commission • Sales organization in target market • Sales representative: on pay roll • Importing manufacturers: 1,4- 1,7

2.2. Sourcing Strategy : What do you control? Pre production services The Supply Chain YOU Raw material producer

Procurement

Production

Trims+ rest

Wholesaler

Material management Logistic management

Logistic management: the control of the supply chain without owning it

Retailer

Physical distribution

Customer

2.3. Sourcing Strategy: How? LC procedure in buying and selling v v v v v

LC at sight LC 30 days LC 60 days LC net LC back to back!!!!! Supply chain control requires active banking system

2.4. Trend Info: be Informed

2.4. Trend Info: be Informed • International Fairs • International fabric fairs • Suppliers: fabric manufacturers: color cards • Buyers: have info available on trends/ colors and patterns • Through Internet • Design books • Branch Magazines • Cluster • Agents

2.5. Trend Info- Fairs

2.6. Trend Info- Fairs Fashion Forecast

2.7. Trend Info- MagazinesDesign

Date

Modelname

Season

Modelcode

Stylesheetno.

Pattern

PDNG 8212

Basic pattern Client

DYNAMIC

2.8 Product: Size charts+ tolerances SIZES

128

140

152

164

176

Description

REQ

REQ

REQ

REQ

REQ

1/2 CHEST

35,00

+1

37,00

+0.50

39,00

+1

41,00

+1

43,00

+1

1/2 WAIST

32,00

OK

34,00

OK

36,00

OK

38,00

OK

40,00

OK

1/2 BOTTOM HEM

35,50

+1

38,00

+1

40,50

+0.5

43,00

OK

45,50

OK

1/2 ARM HOLE

19,00

- 0.50

20,00

- 0.50

21,00

- 0.50

22,00

-1

23,00

- 0.50

SLEEVE LENGTH

46,00

+0.50

49,00

+0.50

52,00

+1

55,00

+1

58,00

+0.50

1/2 CUFF OPENNING

10,00

OK

10,50

OK

11,00

-0,50

11,50

- 0.50

12,00

- 0.50

CENTER BACK LENGTH

46,00

+1

48,00

+ 1.50

50,00

+1

52,00

+ 1.50

54,00

+1

2.8. Product Specifications Size Charts Size table for women's outerwear (body sizes) in cm character sizes

•XS

•S

•M

•L

•XL

•XXL

•figure sizes

•34

•36

•38

•40

•42

•44

•46

•48

•50

•chest width

•80

•84

•88

•92

•96

•100

•104

•110

•116

•waist size

•61

•64

•68

•72

•76

•81

•86

•91

•97

•hip girth

•86

•90

•94

•98

•102

•106

•110

•114

•118

2.8. Product Specifications Size Charts Size table for men's outerwear (body sizes) in cm, except trousers/jeans character sizes

•XS

•S

•M

•L

•XL

•XXL

•figure sizes

•42

•44

•46

•48

•50

•52

•54

•56

•58

•60

•chest width

•84

•88

•92

•96

•100

•104

•108

•112

•116

•120

2.8. Product Specifications Size Charts Size table for men's trousers (garment sizes) in cm: figure sizes

•40

•41

•42

•43

•44

•45

•46

•47

•48

•49

•waistband width

•68

•68

•72

•72

•76

•76

• 80

•80

•84

•84

•side length

•100

•108

•102

•110

•104

•111

•104

•112

•106

•112

figure sizes

•50

•51

•52

•53

•54

•55

•56

•58

•60

•62

•waistband width

•88

•88

•92

•92

•97

•97

•102

•108

•114

•120

•side length

•106

•113

•108

•114

•108

•114

•111

•111

•111

•111

2.9. Product Specifications Visualize total offer- Correspondence

2.9. Product Specifications Visualize total offer- Correspondence

Target the EU countries Right Right Right Right Right Right Right Right Right Right

Product Price distribution channel country & segment sample color fabric flexibility- minimum lead time service communication