START A BUYING HOUSE BUSINESS IN BANGLADESH:
Simply, we can say the institution for buying goods or services in any trade is a “Buying house.” In the garment-buying house, there are some specific responsibilities and working procedures. To set up and run buying a house, you must have a knowledgeable and skilled person for each individual department of buying a house (such as merchandising, sourcing, quality, compliance, shipping, and technical). Buying or entrepreneurs may hire managers or technical personnel for each department, but basic knowledge is required to quickly start a buying house business.
The main buying countries of Bangladeshi garment items are the USA and Europe, besides that, we are also exporting garments to Canada, Russia, Japan, and the Middle East. A simple Buying house purchase can be initiated with any of these countries’ relatives. Also, you can also get buyer contacts to build a business network with them.
There should be numerous ways to find buyers, as I discussed in another article on this site.
Table of Contents:
UNDERSTAND ESSENTIAL TERMS TO START A BUYING HOUSE BUSINESS:
- Whole Seller:
To start a buying house business first we need to clearly understand the term which parties relate to buying house business.The parties who buy garments for wholesaling purposes are known as whole sellers. The whole seller handles garment marketing and is aware of current fashion trends. They should have their own designer to follow market research to realize fashion trends. The whole seller sells garments to the retailer
- Buying Agent:
The buying agent is the middleman and sells garments to the whole seller. The buying house should have enough staff to follow up on orders and ensure that the product meets the customer’s expectations and that goods are delivered on time. To perform this job, the buyer’s agent gets the commission. The buying agent forwards the master LC to the factory/manufacturer with an endorsement of their commission in the LC by their bank.
Retailers have their own outlets in the market to sell the garments product. Retailer buys may form the whole seller & have arrangements with some Buying Agent from whom they get the garments as per their demand and directives.
Finally, the person, who purchases the garments and is the ultimate user of the garment is called the “customer” or “consumer.”
PREREQUISITES TO START A BUYING BUSINESS:
- Prerequisite for setting up a Buying House:
- An office in the prime location of the capital city
- Computer, high-speed Internet connection, Photocopier, Scanner, Printer
- Phones (Land/Mobile for each department)
- Twenty hours of backup Power Supply
- Conference room with Multimedia projector for meeting purposes
- Lab room
- Sample room for the sample development for buyers as per their requirements
WHAT ARE THE VARIOUS DOCUMENTS REQUIRED TO START A BUYING HOUSE IN BANGLADESH?
- Name of Company (needs verification and confirmation)
- Trade License
- Incorporation with Joint Stock (For limited company)
- Memorandums of Article and Incorporation Certificate (For limited company)
- Bank Account for the buying house (Current A/C)
- VAT License.
- TIN against Company Name
- Partnership TIN of all Partners( For Partnership/Limited company)
- Export Registration Certificate (ERC).
- Import Registration Certificate (IRC)
- Membership of Chamber of Commerce.
- Membership of BGMEA
HOW IS AN ORDER PLACED TO A FACTORY THROUGH A BUYING HOUSE?
There are various ways of placing an order with any factory through a buying house. Placement of Order with Commission
- FOB Basis: Ordering at a Lower Price Than the Buyer’s Price That case needs to endorse the commission percentage on buyer Master LC during the forwarding of LC to the garment factory.
- CM Basis. The placement of the cost of making (all fabrics, accessories, and lab tests) will be arranged by the buying House. A factory will provide support only for the sewing of the garment. For a small factory, most of the factories run on CM basis order placement.
HOW ONE ORDER IS EXECUTED FROM ITS INITIATION TO SHIPMENT:
- First of all, the buying house places the order with the factory with a clear understanding of the buying commission realization and how the shipment of the goods will be made following customer standards.
- Then Buying House arranges LC for e Factory.
- After that Buying House ask for Time and Action Calendar from the Factory with the following details & follows up on each stage so thing task is done smoothly.
- When to Open BB L/C will be open for all Fabrics, Accessories, Printing, Embroidery, etc.
- The time and Action calendar may be supported by a Gantt chart Production Line plan
- Buying house strictly follow-up Regular cutting, printing, embroidery, washing, sewing, finishing, and packing status for the sake of good’s smooth shipment.
DUTIES AND RESPONSIBILITIES AT BUYING HOUSE END:
- Clarify factory total order details/requirements
- Give Color Standard to the factory for lab dip submission as per buyer requirement
- Arrange approval of Lab dip from the buyer’s end
- Arrange approval of Shade Band for color.
- Follow up on all required Samples
- Follow-up lab dip submission
- Follow up on all lab-test.
- Follow-up shipment status
- Work with forwarder to ensure goods loading on a particular vessel
- Conduct all inspections ( pre-line, pre-final, Final)
- Ensure shipment on time
- Follow up the realization of Payment as per shipped quantity & value
- Find out the best solution for any sort of problem which relates to the order
- Maintain Liaison among customers, suppliers & factories
BEFORE READING THESE DONT START BUYING HOUSE BUSINESS:
- You must have good connections with customers before starting buying house business
- If you don’t have existing customers on hand must need to develop buyers first. Start showing your recent developments and strength to build business relations.
- Developing buyers is not an easy job at all, you have to prove to them how you could keep better contributions to their business to generate more revenue.
- Offering competitive product prices may be another key factor to grab initial orders from customer
- On-time shipment with following customer quality standards is a must if you need the next orders from customers
- Your proactiveness will help to sustain long-term business with customers
- Your capabilities & confidence must be needed to overcome all the obstacles and challenges which you must face to execute orders.
Author with two decades of expertise in Clothing merchandise & Digital marketing in the world’s most renowned Apparel companies.