There are many buying houses/buying agents in India who are working with wholesalers and importers. Some of them do have apprehensions and admit that on some point working with this segment is even difficult for buying houses. But they vehemently deny that compromises are made in quality, as suggested by some exporters.
None of the buying house representatives acknowledged that wholesalers/importers ever accept any lacking on quality. Following all the standard parameters of quality, they said that third-party inspections are always conducted and there is nothing like value for money or that quality moves according to given price. At the end of the day product has to be sold by retailers and why would any retailer take chance on quality. Even the wholesalers sell the product under their own clothing line/label, so he will also not take risk with his own clientele. In fact, buying agents claim that such exporters who compromise on quality are losing orders as wholesalers come to them only when there is no other option for him. Yes, price is always less when working with wholesalers/importers but most of the time they have good order sizes, so it does not remain a very big issue. Buying agents also admitted that wholesalers never act strictly for their given delivery date and most of the time little margin is built in as wholesalers generally place their orders well in advance.
On the issue of compliance, there is a twist, one of the buying houses representative adds, “I have noticed that wholesalers don’t ask for compliant factory even if he is sourcing for a reputed brand while if the same brand is sourcing directly from us, he is very particular about the compliances and proper documentation/certification of the same. In case of sourcing through wholesaler, these brands just ensure verbally that factories are fulfilling basic norms/law of the land.”
There is strong opinion among exporters that working through buying houses with this segment adds more pressure on price as well as working norms. “I completely disagree that scenario becomes worse when any exporter works with wholesalers/importers through buying houses. The value added by a buying house is worth the little extra that they pay and how can they disregard the fact that they are getting orders sitting at home without putting much efforts, otherwise it costs them at least Rs. 2-3 lakh for one overseas trip to finalize an order. Most of the exporters never accept their mistakes,” says one of the buying house owners working majorly with wholesalers/importers. Even in the condition of order cancellation, wholesalers/importers are in better condition as they try to serve shipments/products to their other clients. If in a particular case any wholesaler/importer is forced to get an order at a very tight price, he tries to accommodate it by giving a better price on a further order.
As far as opinion of buying houses on new vendors’ selection is concerned, they are of the opinion that wholesalers ask for new vendors only when more orders are there, or existing vendor base lacks resources for something specific that the wholesaler is looking for. Apart from this, innovation at various levels, including on washing and printing, do matter a lot for wholesalers/importers. How capable a factory is in terms of sourcing of fabric and allied material too matters a lot.
Take on PD…
“We are working with 7 wholesalers/importers of the US. Working with wholesalers/importers is a little more challenging than working with retailers directly, as they ask our inputs on many things right from fabric, PD and quality. While retailers usually give a tech-pack kind of work, so involvement at that level is far less.” – Jitendra Sodhi, CEO, India Buying Consultants, Gurgaon
Take on payment security and compliance needs…
“Among the wholesalers, the NRI ones are most unreliable and apart from few established NRI wholesalers, most of them have least credibility about payments. They never issue an LC and it is hard to trace them; today they are in the market strongly, placing reasonable orders but all of a sudden disappear. There is no support by our law or any such platform to raise such issues.” – Rakesh Saigal, MD, Precision Design and Sourcing, Gurgaon
“We are working with wholesalers of US and Canada who further work with prestigious companies like Walmart, Woolworth, Truworths. We work with 30 per cent advance, as working with such buyers can be risky, as one never has a security of payment. I have noticed that day-by-day more and more wholesalers are asking about compliance and one must accept that sooner or later, there is no survival without compliance.” – Anand, MD, Dean Textiles Buying Services, Tirupur
Working with importers is no different than working with retailers…
“I feel price is workable with wholesalers, as it is balanced by order size. Be it matters related to quality or lead time, wholesalers are equally ‘tight’ as retailers are. Same is true with the growing need of compliance with them. More and less payments with them are also safe.” – Sameer Thapar, MD, Montrose Knitwear, Delhi
