T-shirt - buying from the manufacturer

Let’s have a look at all this in detail.
First, the t-shirt is usually cotton and cotton is a traded commodity on the stock exchange. Most cotton in the world comes from USA or Uzbekistan. It has to be bought on world stock exchange trade prices based on quality and availability.

Timing of the buy and locking it in are therefore based on a long term manufacturing program. Therefore it is beneficial that the buyer state that they would require say xxxx amount per month per year. Then buyer and seller can plan ahead. As you can see trial orders then become a problem as manufacturer can’t lock in a futures buy on the cotton or chemicals or even production line space.

It is imperative that the real end buyer state and back it up with a Letter of Credit (LC) that they want xxxx containers of t-shirts per month x 12 months.
If the LC goes through broker after broker then they need to push down the price to cover their commissions and all the bank charges/exchange rates. So the price becomes lower than the cost price and then cannot be done.

Second, the buyer can send all t-shirt size specs for a quote and believe me anyone can quote whatever price you want to hear, but will the lowest priced item ever be shipped and what about the quality – will it be acceptable. Probably not.

So a sample is requested from the buyer so that the manufacturer can see the look and the feel of the garment. This is also a way of assessing if the buyers real as they have no problem in sending samples. But brokers have a problem with getting the samples and then paying the courier charges.

A counter sample is then made and sent to the buyer. Like everything you pay for quality. A 50 cent t-shirt is a 50 cent t-shirt. Good for a few washes then it’s out of shape, stitching broken and faded colour.

Again we always ask for buyers samples to see the stitching weight and general quality. With these in hand we can work out if we can meet the target prices.

Third, end buyers know the target prices. They accept that the manufacturer has to make a few cents to stay in business. However, when a middleman or broker gets involved they need to push down the price of the unit by a few cents. The more middlemen the lower the target price becomes, sometimes it gets so low that no one in the world can manufacture for these prices. Not even a 3rd world sweatshops. The price becomes so low that we can’t even buy the yarn so all bets are off.

This is why we always ask the target price.

Also the buyers or brokers need to realise that we are not going to move our current production, that is making profit for us, in order to make the lower priced item for them. This is not good business.

Recently, we have had many African aids or election t-shirt orders – all scams – I have worked a few of them and all that happens is that someone in the end loses as they get greedy and think the deal will eventuates – it never does. The story is that they will pay US$5 per shirt and that you can make for US$1 and so not a bad profit. However, they want samples of each size and colour, so you may end up shipping 12 or so t-shirts - work out the freight on this - then multiply it by the hundreds of enquiries you get and your out of pocket by US$1000's.

The sample t-shirts end up as gifts for family or they sell in the market to make a few bob!
Whatever you do just trash these enquiries.

I had a few enquiries from MEXICO, from several different sources and they were all the same except for the price. The more brokers the lower the price. Trash them as well.

In the t-shirt industry the USA dominates and as such can dictate quota to different countries. For example a few years ago Vietnam was the place to be and so we set up a factory 2.5 hours south of Hanoi. All was well until the USA revoked quota for Vietnam. After all the work we had done in getting the factory safety and anti sweatshop compliant for USA companies all was shut down as the quota added price wasn’t competitive enough.
We did the same in Bangladesh, but if anyone’s been there you will see that it is one of the most corrupt countries and has huge problems in consistently delivering a quality product.
Another place to think twice about when getting anything manufactured. There are still a few court cases we are running there.

On the quota issue I will explain our last venture that originated from South Africa. A long term friend had received an order from the USA. I sent the standard questionnaire and received some info and requested samples. They didn’t have any and my alarm bells were ringing. However for the sake of my pleading friend we pressed on. The order was for the USA and so some creative manufacturing need to be done to be compliant with the quota issue. So part of the shirt need to be made and then finished in another country that had quota for the USA.
Imagine the process, buy the cotton in a time when oil prices were hitting nearly $80 a barrel, ship it to 2 countries to get manufactured then finally ship to the USA.
Every component of the shirt was the same – double sometimes triple shipping and all this was to fit into a target price that had 2 brokers involved.

To save our company holding the bag and losing dollars we insisted on 80% cash to forward buy and lock in cotton, dye, CMP and shipping – there was no other way.
Needless to say, there was no way the brokers would put the money up and the buyers would not forward any money through the brokers either.
Everyday I was getting 3 calls on where the process was up to.

Unfortunately it went nowhere although 6 weeks was spent on it.
I just don’t know how these brokers think that their pleading and crying over the phone is going to wish the contract through.

STICK TO THIS LOGIC _ Business is business and there is a process to follow - same as the banks - dont take it personally.

There is a simple way to get these contracts through:

1. Make sure the end buyers the end buyer. Good talkers are a dime a dozen and they fall apart when real questions are asked and real answers are expected.

2. Work out what your commissions are and are they reasonable for the amount of work you are doing.

3. Don't hold back info to protect your interests. All info is needed up front so that the details can be assessed and not to much times wasted.

4. Find a manufacturer that can protect your interests too. There is a certain amount of trust and respect needed, after all you have brought new business to the manufacturer and they should reward you for it.

I hope this helps some realize that you just can’t put x and y together and then start spending the commissions. It doesn’t work like that as it takes months to make and ship t-shirts.

MANY COUNTRIES are involved. The stock market and the price of oil affect all. On top add tariffs and quotas and then try to work out a realistic price.

Real buyers will work with you and realize these pressures on the manufacturers. Both manufacturer and buyer need to make a few cents on each t-shirt otherwise there's no mutual business

Finally, look for manufacturers that have in place many contracts with cotton growers, chemical manufacturers and shippers – therefore being in control and able to offer the right price to the end buyers.

When a manufacturer has a vertical operation then you can be mostly assured that you will get the t-shirts you paid for.

Best of luck T-shirt size specifications