Creating and reviewing sourcing strategies

Helping major apparel buying groups create new buying strategies is our most common brief. Typically, our Sourcing Health Check is semi-automated. We can work with a retailer or brand to produce  a one-off evaluation of a buying strategy – or leave a client with the tools to carry on doing it himself.

No two Health Checks are ever the same. But, typically, they compare a buyer’s sourcing and the prices he’s being charged with the market average in his country.

Typical output – in this case for a UK retailer – might look like this:

It’s important for this retailer to have a good proportion of his range from nearby countries, and accept the premium this involves over buying in Asia.  But neither in Short Lead Time (SLT) nor Long Lead Time (LLT) countries, is this retailer buying skirts from the cheapest countries, compared to the average European retailer and to the average British retailer.
 

In spite of the importance of fast fashion to this retailer (Thisco), he relies on Long Lead Time countries more than his competitors – and gets more of his skirts from countries that charge the full rate of duty, while competitors use duty-free countries more.

In fact, though, he buys skirts at a lower price than his competitors locally – but pays more for skirts  overall, as he’s paying much more than others for skirts bought in Asia’s Long Lead Time countries. Taken together, he’s paying 11% more for his skirts. But in the Long Lead Time countries, he’s paying 24.7% more than others – and a great deal of this is going in duty.

Skirts are a small part of this retailer’s range. Across the whole of his mix, a Clothesource Health Check identified a sourcing improvement of over 20% through learning where his competitors are buying from.