Recently, Fashion Business, Inc. conducted a seminar on selling goods to foreign markets. We were fortunate to have Julia Son from Hong Kong Trade Development Council (HKTDC) and Bobby Hines, International Trade Specialist, from U. S. Department of Customs as our guest speakers. It was a fascinating discussion, not easily summarized in a few paragraphs, but I’ll do my best.

As I’ve talked about in previous blogs, if you’re looking to expand your customer base, perhaps you should look outside the U. S. borders. The U. S. government has a number of programs in place to help your business sell to foreign markets if, and it’s a big IF, the products you’re looking to sell are made primarily in the U. S. I won’t try to explain the details of this – go to the Office of Textile and Apparel website for more information on what types of products qualify. All products will need a certificate of origin in order to be considered for export. For mixed origin materials or manufacturing, you’ll want to check with the Office of Textile and Apparel to see if your products will qualify. NAFTA or CAFTA goods have a different set of rules and regulations, so be sure to check with the Office of Textile and Apparel regarding these qualifications.

Enough of that, The U. S. government is very happy to encourage businesses to sell internationally. Exporting goods to foreign consumers helps strengthen our economy and who doesn’t want that? The Department of Commerce has offices in over 170 countries. Some of the many purposes of these offices are to help to identify markets for your company’s products, determine the best methods to handle financial transactions, orders, shipments and more. Plus, help you make connections in the countries your looking to develop your business contacts. Looking to find out the basics of exporting? Go to http://www.export.gov/ for essential information. Want to know more? Consider purchasing A Basic Guide to Exporting available at the U. S. Government bookstore.

When I talk about exporting with some of my clients, I usually hear about all of the barriers they’ve encountered trying to create an international business. Well, that may be true. Not all countries have the same type of trade relationship with the U. S. Some of those barriers may be with a specific country, or perhaps with the type of product a company is trying to export. Your best bet is to look for countries with Free Trade agreements with the U. S. Currently, we don’t have a Free Trade agreement with India, which makes trying to export products there very difficult. You’ll have a better chance trying to sell to Australia, Bahrain, Chile, Israel, Jordan, Morocco, Peru, Oman, or Singapore each of which has a Free Trade agreement with the U. S. Free trade isn’t limited to these countries – remember NAFTA or CAFTA? There are plenty of trade agreements with more than 150 countries, so do some homework to find countries and markets that are right for your products.

Looking to sell your product to China? Your first stop should be Hong Kong. Why? Prospects are bright, despite the global economic downturn. The U. S. government expects Hong Kong and China to bounce back faster than the rest of the world and Asian markets are hungry for U. S. products. Hong Kong is an easy entre to Mainland Chinese markets. It has a separate legal system, currency and customs system from that of Mainland China. And, did you know, English is the official language in Hong Kong? Hong Kong has an open financial banking system. There are no foreign exchange controls. It may be easier for you to get paid through a Hong Kong company rather than a Mainland Chinese company. If that’s not enough to entice you, Hong Kong is a free port with virtually no duties or tariffs; perfect for small to medium sized firms looking to do business in Hong Kong or Mainland China. Hong Kong is the perfect stepping stone into Mainland China and the rest of Asia. Want to find out more, go to Hong Kong Trade Development Council (HKTDC) for information.

One more thing, the U. S. is one of the last countries in the world still using the Imperial measurement system. Almost every other country uses the Metric system. If you plan to sell products to foreign markets, make sure you sell them in the correct unit of measure for each country. A 32″ waistband won’t get you very far in many countries.

Some important websites to visit for anyone looking to export U. S. goods:

http://www.export.gov

http://www.buyusa.gov

Jill Mazur is an independent apparel business and technology consultant working with Fashion Business, Incorporated.  Email:  jill@fashionbizinc.org

Speed to Market – Fast Turn – Rapid Response

What do these terms mean to the apparel industry in 2009? Good news and bad news!

New times = New methods of doing business = Rapid response to the demands of the retailer and consumer.

But, can the average apparel manufacturer respond rapidly? Well, for the small company who, due to their smaller orders are for the most part producing domestically it is good news. They can turn on a dime and produce faster than the larger companies who need a much longer lead time to produce their goods, usually in far off places. Smaller companies with small orders ship them to the retailer, then if the orders sell through they get reorders. This is the very best of new business news for new and smaller manufacturers. It is also good news for the retailer as they can plan for the demands of their customers, the weather, and the economy etc. This new type of selling and buying results in the manufacturer having a much better cash flow, as they will not be seeking funding for larger orders when selling through the traditional five seasons each year.

This tradition of selling at the four or five markets each year usually requires groups within each line that demands cash outlay for the expenses for patternmaking and sampling. Now, the manufacturer is constantly designing, which they really always have and then showing new products, and shipping weekly or monthly new merchandise. So now the manufacturer can get paid more often. They do not need to invest heavily in the five big lines a year as they are now producing and shipping new items to replenish sell through products. The retailer will also have less of a cash flow problem with this type of merchandise planning. The customer will see new items when ever they shop. A win win in a new economy! Well, we hope so.

So, it has at last been officially noted by many international economist that the small business owners are really the backbone of our economy, not only in the US but globally. The big branded companies are not fairing well and many have had to cut back or worse, close their doors. Small businesses can adjust and respond as they don’t have large overheads. For the most part they contract out all their work, including sewing, cutting, bookkeeping etc. and cut back on other expenses to respond to demands, or lack of demands of the economy.

Some for the negative results of this new economy is that bigger retailers are demanding, from branded manufacturers that they discount or allow markdown money. Additionally, major discount store, e.g. Marshals, TJ Maxx, Ross are producing more private label. This has resulted in much cheaper prices for the average clothing labels that are now being sold. The price of clothing today is the lowest we have seen in years. Due to the recession sewing factories around the world have all been forced to lay off workers. The ports in China and other locations are full of containers with cancelled orders. These goods may get discounted and sold or they will have to be destroyed.

However, much merchandise is still being produced domestically, especially in southern California where they produce premium denim, active sportswear and contemporary clothing. But sadly both the off shore and the domestic sewing contractors reluctantly have been forced to take cuts in their pricing so that they can keep their workers working. This rational is in the hopes that the economy will turn around and then the demand for new clothing will pick up. The alternative is to lay workers off and then when the economy turns around they will then need to reinvest time and money in finding good workers and training them.

Another change in business methods are that some of the higher end retailers are asking the smaller manufactures to sell on consignment and this is not a good idea. It was bad enough that traditionally the manufacturer has taken all the risks with development and production costs then have to wait to get paid. Now they are expected to take ALL the risk and maybe then get paid!

Talk about getting screwed!  - Consignment selling will be one of my next blog topics.

But, now onto a very different topic. It is the season to be merry! And I need to take a deep breath and keep my mouth shut when I see all those ugly heavy knitted sweaters decorated with Christmas trees adorned with lights and holly. Or, equally as offensive fashion trend, those cheaply mass produced red jackets lovely dragged out annually of the closets. Where, in my very opinionated opinion they should really remain for posterity. J

HAPPY HOLIDAYS TO YOU AND YOUR LOVED ONES. I HAVE MUCH TO BE GRATEFUL FOR IN MY LIFE AND ALTHOUGH CLOTHING IS MY BUSINESS IT IS NOT MY LIFE.

It’s time to start looking at your business from a global perspective.  How many of you are buying or selling your products outside of the U.S.?  If not, you need to start looking at how to create a global presence for your products.  The U. S. economy is going through a lot of turmoil these days.  If 100% of your business is reliant on the U. S. economy you’d better buckle up, you may be in for a bumpy ride.  Think of the analogy of putting all of your eggs in one basket; it’s the same thing.  With global markets opening up and technology available to allow commercial transactions in multiple currencies there’s no better time to explore opportunities outside U. S. borders. 

I remember not too long ago when trying to sell or buy Canadian products was such a deterrent most apparel companies decided it wasn’t worth the effort.   Now, I can’t see why a smart business person wouldn’t welcome the opportunity to access global markets, suppliers and buyers.  If I were a buyer or manufacturer in this economy, I know I would want to spread my risk and potential reward through as many channels as possible.  When I think about how I would do this I know I need to reach as many buyers or manufacturers as possible.  U. S. tradeshows are great for U. S. buyers and suppliers, but most are not heavily attended by international buyers.  So, how would I reach an international market?  Easy.  I would look outside our borders to find global tradeshows.  The types of shows that attract buyers from Europe, Asia, the Middle East and more.  Many of these economies are doing well, buyers have deep pockets and are looking for new, exciting products.  American brands hold a great deal of cache and brands “Made in America” are always appealing to a foreign market.  If I were a retailer, I would look for exciting new trends and global brands to fill my store; things I wouldn’t find in every mainstream boutique or department store. 

So, how do I start?  How do I find international buyers for my products?  How do I find great brands or products for my stores?  How do I make connections to global manufacturers, suppliers, agents and buyers?  Hop on a plane!  Head on over to Hong Kong Fashion Week and World Boutique.  FBI is working directly with the Hong Kong Trade Development Council to promote the upcoming Hong Kong World Boutique and Fashion Week January 18 – 21, 2010.  FBI and HKTDC are offering an AMAZING AIRFARE AND HOTEL DEAL to first time buyers who would like to attend Fashion Week and the World Boutique this January in Hong Kong.  Intrigued?  I’ll bet you are!  Even If you’ve attended this show before, there are some amazing hotel deals to be had through HKTDC.  Looking to exhibit instead?  There are a number of options for first time exhibitors and established brands.  There’s even a fashion show if you’re so inclined to participate. 

Please don’t wait to sign up for this global opportunity.  Email us at FBI to find out more or stop by the FBI office on December 7, at 3:00 p.m. to see a presentation from Dannie Chiu and Julia Son from HKTDC.  The primary goal of this presentation will be to discuss the upcoming Hong Kong World Boutique and Fashion Week January 18 – 21, 2010 and why it would be of benefit to attend either as a buyer or as an exhibitor.  You’ll get a better understanding of Asian and Global markets, the types of buyers, distributors, manufacturers and retailers attending the show and get the answers to all of your global questions. 

Jill Mazur is an independent apparel business and technology consultant working with Fashion Business, Incorporated.  Email:  jill@fashionbizinc.org

Part one

I have just returned from an interesting and thought provoking 8 day trip to Germany. I was invited by the German Federal Foreign office to be part of a foreign delegation. The visit included four cities which highlighted sustainability, green technology and to see firsthand what the Germans have in place to support their creative industry.

Why were we invited on this fascinating trip? To begin with this was a question on all our minds, but it soon became clear that this experience was a PR trip to educate the world about Germany’s support of creativity and entrepreneurial endeavors. They also wanted to highlight the importance of small creative entrepreneurial businesses to the world economy and the importance of supporting small business.

First stop Munich, my favorite city in Germany. A place I know very well from living there for four years in the 70’s and then later for two years with my family in the 80’s. We stayed in a wonderful boutique hotel downtown near the center. The first evening after my near 24 hours trip from LA via Zurich I was introduced to the other members of the delegation who had also arrived that day from various other parts of the world.

Including me there was a total of nine people in the delegation; a shy professor of fashion from Beijing, an extravert and renowned reporter from Shanghai, a glamorous new age Marilyn Monroe fashion reporter accompanied by a delightful professor of knitting from Oslo Norway, the exuberant talented and bight business journalist from Luxemburg, a talented designer from Tehran who will be showing her fashions at the Victoria and Albert museum in London in November 09. A rugged science journalist from New Zealand and last, but by no ways least, a delightful Harvard masters graduate and professor of fashion from Boston.

Our Munich itinerary included visits to a new young “How to make your own thing” magazine. A visit to a boutique with a social conscience, which featured interesting organic cottage industry clothing, and accessories. Followed by a SBahn train ride to a small but very interesting trade show that featured sustainable furniture. But, the highlight in Munich was the visit to the new very impressive modern art gallery which was a treat for us all. Packed full of valuable art work that would have cost millions to purchase. The building is a master example in the use of space and light.

Next we flew to Dusseldorf to visit Germany’s center of fashion and architectural fame. A city that combines green technology with old and not so old historic buildings. From there we drove to Essen the past heart of the industrial center of Germany. We visited a rebuilt and preserved brewery and an old coal mine, which our guides likened to the “pyramids” in engineering and architecture. The Germans have reworked these places with precision, a quality for style and workmanship for which they are famous.

Our final destination was Berlin to experience firsthand their relatively recent rebirth of a city from the ashes of the east and from the division of a country to the newly reunited Berlin. This year marks 20 years since the wall came down. Berlin is a tribute to their master planning with its incredible architectural buildings that highlight Germany’s ability to heal and rebuild a city.

In Berlin we had many meetings and lectures at different locations, maybe too many as we were all rather exhausted at this point. One meeting that we all agreed was refreshingly honest and insightful was presented by Sven Harpering, Senior Managing Media, ICT & Creative Industries. Sven discussed the contributions made to the economy of the creative industries. Small new companies that pop up in all sectors of creativity, from fashion, music, film, art, software design, performing arts and many more. These small companies contribute massively to the economy. Hundreds of thousands of small companies with maybe one or two employees, which are struggling to make their company bigger or more profitable.

Most of us are aware that many types of jobs have been lost to off shore cheaper labor. As a result we are now looking at our struggling economy and what has resulted from the massive lack of planning and rebuilding of any new infrastructure. If we do not begin to support our own western creativity to create new businesses and help existing businesses then the east will soon take over as the leaders in entrepreneurial endeavors.

What they are doing in Germany is something we at the Fashion Business Incorporated www.fashionbizinc.org in LA have for the past ten years been trying to achieve. That is, to support creative entrepreneurs realize success and profits, while at the same time creating new jobs. We must rapidly realize that it is extremely important to rebuild our countries infrastructure by developing new manufacturing methods that will serve the needs of today’s textile and fashion industry.

The apparel industry is the largest industry in the US if you consider the retailing segment. Bigger than the auto industry! When has our industry received support from any bailouts? But if the industry is not supported soon our creative entrepreneurs and the money they generate for our western economies, and whose trendy fashion goods that are sought after globally will disappear. We can then all expect to be looking to China’s new designer/entrepreneurs to fill our shoes as well as produce the product!

However, back to our trip which was truly memorable. The new friends I made were all so different in many ways with very diverse experiences and life styles, and yet we all really bonded. It could have been the good wine that helped fuel this realization. I feel confident that we will all stay connected to find more solutions to support global creativity.

Global Creativity Network - to be continued.