Introduction:
Buying House (BH) is one of the leading business sector in Bangladesh RMG sector. It is well understood that Bangladesh ranks as the second highest RMG exporter in the world, as the sector produces high quality products at competitive prices compared to other competing countries. Bangladesh has created a huge space in the global apparel market, where apparel buying houses play an important role in this important contribution. Considering the minimum 5 per cent procurement services commission, it can be said that 15-1 of the last financial year. In the fiscal year, garment manufacturers and home buyers shared at least ৪ 1.4 billion.
Buying house (BH):
A purchasing house is basically a business partner between the buyer / retailer and the manufacturer. In business we see two types of BH, be it a purchasing agency or liaison office and a trade / purchasing office. Both terms have different meanings.
Figure 1: Estimated number of liaison offices and houses purchased in Bangladesh.
Figure 1: Estimated number of liaison offices and houses purchased in Bangladesh.
The purchasing agency or liaison office is the regional office of an independent buyer, from where all kinds of necessary approvals have been given. It cannot show any income without expenses as per local law. Namely Decathlon (France), TMA (Turkey) and H&M (Sweden)
On the other hand, the office was bought, which simultaneously works with different buyers and brands. In this case, all the necessary approvals are coming from the buyer. These are not only allowed to make big decisions than to allow orders to be taken. Namely Target Australia, T&M Sourcing Limited, Aptex Sourcing and ARP.
The office has a few liaison officers and efforts as a buying house which means that the efforts at this time of office efforts at this time are an independent buyer’s office with the most approval without any fabrication and lab deep selection. And performance for various buyers and brands without authorization authority.
Many garment manufacturers use their separate marketing office as a purchasing house and they charge 5 to 10% commission for the service.
History of Bangladesh BH:
Bangladesh's export-oriented RMG sector started its moderate journey as a small non-traditional export sector in the late 1970s. After independence, especially since the 90s, the RMG industry has been advancing at a strong pace as the country has been gaining political and social stability. Within three decades, RMG has transformed itself into the country's highest revenue generating sector, contributing 72% of the country's total exports (১৫ 26.094 billion in FY15-1). There is no BH in Bangladesh of 70 or 80. In the early 90's some entrepreneurs came up with the idea of buying houses to meet the needs of the industry.
Now, according to BKMEA and BGMEA reports, there are more than 1000 listed buying houses in the country, 1500 export oriented textile industries and more than 2000 under BGMEA (2000 under BGMEA and RMG industries under BMMEA between FY201 F-1F). Note that the actual number will be slightly lower as there are companies that have both BGMEA and BKMEA member companies. In the last 2 decades ‘this number has been growing very fast. According to industry insiders, a center of vendors consisting of leading manufacturers, exporters and suppliers of home buying, showcases the latest and trendiest collections of clothing to their huge audience throughout the year.
Why buy a house?
In fact a buying house has always played an important role in the RMG sector. It is a combination of all marketing activities, not only to search for foreign apparel buyers, to collect orders, not to media for manufacturers, to place orders in suitable apparel factories and to provide all kinds of technical and communication support to buyers and manufacturers.
BH plays an important role in the garment manufacturing sector in Bangladesh. Bangladesh RMG sector is 100% dependent on foreign buyers and foreign buyers are dependent on buying houses. Because many times they do not have enough idea about the country of production, means of communication, culture, nature etc. . That is not possible for foreign buyers. So that the number of newly bought houses is increasing day by day. Below are a few basic points for a broader view of BH’s requirements.
Save cost:
Reducing production costs is one of the main goals of a retailer. If a buyer gets the product with competitive price and best quality, it will help to capture the mass consumer market. Bangladesh is a 100% export oriented productive country. Hundreds of buyers and retailers are producing their brands from Bangladesh but most of the companies do not have any communication or own operational office here. So there is no option but to rely on a good reliable buying partner except to create an own functional office for the proper implementation of the order. Setting up your own office is an expensive and time-saving factor. "We're investing half a million dollars a year to maintain 30 employees," said Carin Kegelgren, managing director of one of the brand's countries. Where the buyer can easily get all the services from any buying house for just a few percent FOB or service charge or some time sharing both.
Nibir observation:
A new product, like any newborn baby, without proper care will bring thousands of dollars in losses to both parties. The biggest loss for a buyer is money as well as reputation. Merchandiser, the leader of the products always busy to take care of the quality of the product according to the requirements of the buyer. He is a doctor of any kind of intensive situation in terms of development at the consignment stage. And this is not possible for buyers from afar. Home Buyers are providing this type of service with full buyer and supplier satisfaction.
Support targets:
The supplier typically achieves a lead time of 90 days to execute a single order. In recent years, it has been declining significantly, but not more than 600 days, which means that anything can happen. This complex supply chain requires an ongoing third eye assistance in the disciplinary process; It is badly needed by the supplier party especially during production. During production the merchandiser needs to make some important decisions for smooth production so that he has to observe the actual situation before making a decision, after extensive observation what happened on the production floor, he can decide both quality and production at the appointed time and home support Without it it is not possible
Maintain strong communication:
Without proper knowledge and complete technical knowledge about the subject, proper communication would never have taken place. The home buyer receives accurate information from the buyer and makes it understandable to the supplier who executes the order directly. Most of the time in this process people use their mother tongue to give real meaning. Buying a home should be one of the momentous events of your life. Currently, many new potential brands are growing; Which has no specific supplier. Home-buying garments provide suppliers with the opportunity they need.
Quality Assurance:
Ensuring real quality is one of the most important tasks of a buying home because the garment industry maintains a complex supply chain where the seller sources different materials from different places, sews garments through different skilled workers and sells the products to retailers. Buying a home has always been very expensive. No end customer will buy inferior and visually defective clothing. So buyers and retailers should not knowingly purchase products that do not meet international standards.
Quality conscious buyers have strong quality inspection system to avoid purchasing defective products. So it is very difficult to produce the right quality products from the factories without supporting any purchasing team.
Quick development support:
Developing new designs is crucial for every retailer. Every year the buyer develops a number of new products that are filled with trials and errors. Market speed is critical for retailers who need quick help from suppliers. However, suppliers are always on the lookout so many homeowners create their own sample development facility to help the buyer develop faster.
Recently, some well-known shopping houses such as Li & Fang, T&M Sourcing using virtual sampling have been significantly reduced as it significantly reduces the amount of time required to design, manufacture, operate and approve product samples. Product designers create collections of virtual apparel samples for customers to review in digital showrooms. Beyond the convenience of time and skill, virtual sampling offers a more sustainable approach to traditional thematic design and sampling methods.
Reduce the complexity of local export laws:
In order to do business, foreigners need to know the rules and regulations of business and most of the basic licenses required to do business in Bangladesh. Important Laws - Tax, Customs and Revenue Laws, Investment Laws, Investment Policies and BIDA Act, 201. If the buyer partners with a buying house, the buyer will easily get rid of the above problems.
Risk reduction:
Buying a home is responsible for performing environmental, social and administrative tasks. BH works with their customers, suppliers and industry partners to further advance the sustainability of the supply chain and community across the network. The well-established BH has assessed progress against sustainability goals, set ambitious goals against best practice standards, and taken action to meet those goals. Due to close monitoring, BH can provide immediate information to the buyer where buyers can take preventive measures as soon as possible.
Market analysis:
Market updates in producing countries are one of the major concerns of the growing buyer. They always want to know about the political situation of the country of production, labor law, review of workers' wages, price of yarn, incidental price, price of fabric, lead time, future of business, FDI (foreign direct investment) and many other things. However, it is not always covered by the international media, the international media always covers the most significant issues. However the buyer needs regular updates about the country of manufacture as it is fully related to their next budget plan so the local bought house is the main player who plays an important role in the Bangladesh RMG sector for foreign buyers.
Marketing to collect orders from buyers.
Choose the best supplier to place the order.
Follow up to run the order execution process.
Creating product development patterns for buyers.
Contact buyers for necessary approvals.
All comments and approvals are forwarded to the factory.
Follow-up order processing according to buyer's demand.
Maintain the quality of the desired product from sample to production.
The inspection terms should be followed according to the buyer's demand
Collect product shipping and sales feedback
Conclusion:
Bangladesh's RMG sector has a new slogan: " 50 billion by 2021." This is not a dream for the country. The country has sufficient capacity to achieve this goal. We expect exports to reach বিল 50 billion by 2021, the 50th anniversary of the Republic of Bangladesh. This milestone will play an important role in achieving the buying house by collecting multiple orders from the top clothing buyers in the world.
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