When the concept started back in the 19th century, the department store was a champion for consumerism. People were able to shop for all their needs in one central location. Even though most department stores started out as dry goods stores, apparel quickly became a cornerstone for the modern department store. Take Macys for example; once the dominant player in apparel in the US, they are now a shell of their former self and have had to drastically reduce their total number of brick and mortar stores to stay lean and profitable. They are even adopting a new business model, much like TJ Maxx and Nordstrom. Sears recently announced that they were closing 72 more non-profitable stores, on top of the many already closed.
One would have to be living under a rock to not understand why all this is happening. The reason is of-course, e-commerce. Who would believe that Borders, and Barnes & Noble once discounted Amazon and brushed them aside. Now the former has gone out of business and the latter has been dwarfed by the e-commerce giant.
Of course, to e-commerce merchants and sellers in the clothing and apparel sector, this is obvious information. What is not obvious to many though, is how they can source their clothes for a fraction of the cost they are currently paying. Even if their sourcing from their local distributor or China, sourcing from Bangladesh can possibly be the best an ecommerce merchant makes. Here are some of the products, and why you should source from Bangladesh clothing manufacturers if you have an e-commerce store.
Being an ecommerce business has it’s fair share of advantages. A big one of which is the ability to stay lean and efficient. Most e-commerce sellers do not have to worry about fixed costs with a typical brick and mortar store. With retail you need to think about inventory, marketing, overheads, salaries, and a lot of other things which make operations heavy to say the least. Even if you go big, you can still use FBA (Fulfilment by Amazon) or any other fulfilment company to manage your inventory, not to mention dropshipping,
Because they can have more control over their margins, compared to a brick and mortar retailer, by sourcing from Bangladesh for a lower price e-commerce sellers can get even more control. Here is an infographic to give you an understanding of how much on average our clients are saving:
Basics remain one of the most popular apparel produced in Bangladesh. Whether you’re talking about socks or t-shirts, the margins are heard to beat. Since basics such as white t-shirts are usually dirt cheap, production margins have to be very low.
One of our more recent clients was a private label ecommerce seller in Europe. They sell basic t-shirts with their label sewn in, they have very little costs, and the margins are phenomenal. They use FBA to store their inventory, they sell through Zalando, and the basics they sell are essentially their own branded product, What’s even more interesting is that they actually shifted production from China and gained an 18% increase in their margins.
Private label brands source a lot of basics from Bangladesh. It is as easy as buying stock products, sewing in your own label, and then shipping it off. Depending on the characteristics of the order, a seller could be looking at design/sample to shelf in as little as a week.
Sports and activewear
Sportswear is one of the more popular functional apparel sourced from Bangladesh. There are even a lot of activewear dropshippers and the margins with activewear are very healthy. On top of that, according to McKinsey’s, The State of Fashion, sportswear will grow more than any other apparel category in 2018. More demand means that more and more merchants will be flocking to e-commerce sites to get their products across to customers.
Nike already sources large volumes of apparel from Bangladesh clothing manufacturers, including jerseys and a lot of polyester based sportswear. Apparel production of yoga pants and clothes, and athleisure-wear is also on the rise, because of the margins that the Bangladesh clothing manufacturing industry is able to offer.
Denim wear recently faced a challenge. Sales were dropping a few years back and due to the rise of athleasurewear and other more convenient alternatives, the classic jeans took a hit in sales. However, that was just part of the story. Denim sales were actually growing in ecommerce platforms. Realising this trend, Levi Strauss immediate jumped on the band wagon. They are now leading the denim industry once again because of their ecommerce efforts.
Levi isn’t the one realising this. Not only are online denim sales on the rise, but a lot of the large e-commerce companies including Amazon, are coming out with their own private label brands. With the massive amounts of data they already have on their hands, it’s only a matter of time until they also a sizeable share of the market.
Bangladesh clothing manufacturers actually produce a big portion of the world’s denim products, with no. 1 in Europe and third in USA after China and Mexico. That is just the tip of the iceberg. To accommodate the rise in demand for denim products, there has been a rise in the production capacity for denim in Bangladesh, and manufacturers are also investing in research and development to improve production methods, and provide better quality products to buyers.
Whether you’re selling basics, activewear, most e-commerce sellers sourcing from Bangladesh are from either Europe or North America. But, that has been changing. For the first time ever, in 2018 the combined markets in the East will be sourcing more than the combined markets in the West. The Bangladesh apparel industry is responding to that proactively. Sales from non-traditional markets such as Australia, Russia, South Korea, Japan, and the Middle East have been on the rise. Given that margins are competitive, and time and distance to market is a big factor in determining margins. With how Asian markets are growing, Bangladesh is primed as the hotspot for apparel sourcing, for markets all over the world, in the digital age.
If you’re wondering how you too can reduce margins for your e-commerce store, shoot us an email. We’re here to enable all e-commerce apparel merchants to achieve the very best they can.