Big Brand Purchasing Manager Talks About Purchasing Strategy

The advantage of low prices made in China is gradually lost. How will Chinese suppliers seek to survive and develop, and how can they succeed in the new competitive situation? Arvind Kalra, Purchasing Manager of Store Twenty One, an Indian retail brand, shared the challenges and countermeasures faced by global retailers at the Hangzhou Station of the "Outsmart Future Export Forum".

Arvind Kalra has 10 years of experience in the sourcing and operations of men's, children's, women's pajamas, underwear and swimwear. And Store Twenty One is an affordable retailer focused on providing value-for-money products to customers, with products ranging from womenswear, menswear, childrenswear and novelty home products.

Retailers respond to rising cost challenges - Sourcing in lower cost countries

Arvind Kalra: We as a global retailer face numerous challenges such as rising costs but generally the same retail price. When customers often go to buy jackets or coats or skirts, they don't want to say that prices are going up every time, but when they go shopping as a retailer, they often find that prices go up again every two to three months.

So our solution is to reduce costs, improve efficiency and find sources of supply that are lower than cost. Therefore, due to the increasing cost of China, everyone moved the origin of purchases to Vietnam, Cambodia, Bangladesh, Myanmar, etc., or places closer to the store, such as Portugal and Turkey.

So we as retailers are also following this trend. So in the end how to deal with these challenges, we understand these needs and our own purposes, so the destination of procurement has expanded to Bangladesh, Turkey and the Philippines.

The price factor is the key to purchasing

Because of the product structure, I believe that China will still play an important role for a long time to come. Because China can meet the demand for product diversification and quantity. I just mentioned three solutions to reduce costs, increase efficiency, and find lower-cost sources of supply. For us, the third is the most important, and it is closer to the desired procurement destination, so there are many procurement countries in many countries. The office has also been looking for reliable suppliers. This does not mean that it is not satisfied with the current suppliers, but hopes that new suppliers can bring new ideas and inspiration.

I think everyone may agree that cost is the largest part for retailers. Every cost you save on purchases is equal to an additional penny in profit, so we and these regular buyers have Sometimes discussions will increase the amount a little and bring the price down. We also fully communicate these procurement information with colleagues in other departments. In order to facilitate the management of cash flow, we will set credit terms, such as payment after 60 days or 90 days.

Suppliers who are honest and good at communication are more preferred

We also hope that suppliers are honest and reliable, the lowest price is not necessarily the best. We also strongly encourage suppliers to provide us with more ideas and products, because they provide product technology, and we provide product style and content, so they can understand our limitations. Maybe in order to adapt to the cost budget, some redesigns will be made. I hope the supplier can suggest what changes can be made. There will also be some fast fashion products in stock, so that they can be shipped quickly, because fashion products In other words, if you miss the timing, you miss the entire season.

I also hope that the supplier will be responsible for the quality of the products. I hope that the customer's quality requirements for us are consistent with our requirements for the supplier. I also hope that the customer is very knowledgeable about the British market or has experience. Understanding the limitations of the market can avoid some mistakes that have occurred in the past. Otherwise, if you send policies or procedures to customers, they may not be able to understand them well. But if there is no experience in the UK, it does not mean that there are no opportunities at all, there is always a start. Then some unmarketable products will lower their prices to attract consumers.

Diversification of procurement channels

The first trade fair for procurement channels, such as Canton Fair, China Fair, and Hong Kong Fashion Week. The second is some exhibitions, exhibitions organized by Global Sources. There are also some websites, such as the website of Global Sources, where you can find a lot of these industry information. Also order magazines, mailers and more to make sure we stay on top of trends and news.

Let's talk about the third aspect, how to improve procurement efficiency.

Each year, sales are analyzed against the previous year to find which products are selling the best. The supplier's quality, service and capabilities are then also assessed. Communication will also be enhanced, making sure everything is organized and transparent. Procurement should continuously improve processes and systems to improve efficiency. For example, the management system should be able to track orders well, and then check the order status and delivery status. Buyers do not necessarily want to change suppliers frequently, because they want to maintain long-term cooperation, which facilitates negotiation between the two parties and saves time. efficiency.

The delivery will also be very flexible, and we need to work closely with suppliers, because fashion is very closely related to the weather. If you miss it, you will miss the entire season. If winter comes too late or next summer comes It's too early to wait, and you have to adjust for it. If sometimes there is a delay somewhere, analyze whether it is due to technical problems or communication problems, let us have a good team to solve these problems.

Environmental protection and corporate social responsibility are also very important to us, because our products are also very rich, such as clothing, home gifts, footwear, etc., so we have a very complex supply chain behind us. So constantly improve our work standards to ensure that both we and the other party can have a positive impact on the environment, and procurement strategies should consider cultural health and safety, labor rights and environmental communities, etc.