The current recession has brought great change to our industry. To those who can recognize and embrace this change, and who are in its forefront, this change will bring enormous opportunity. To those who are blind, obdurate, and in the rear, this change will bring disaster.

Nowhere is this change greater than on the supplier side where the entire garment industry is in a state of flux. In fact, this state of affairs is nothing new. For the past decade, the global garment export industry has been changing rapidly and constantly. However, only a few noted that change and even fewer understood it.

Today we find it difficult to answer even the most basic questions:

  • Where is our supplier located?
  • Who is our supplier?
  • What does our supplier do?

In the course of the next three months, I will provide some answers to these questions.

Where is My Supplier Located?

In the past decade, your supplier has moved from somewhere, to everywhere, to nowhere.

A decade ago, that question had a relatively simple answer. Until the quota phase-out, we usually selected our suppliers by location. In the year 2000, if you asked a customer to define his supplier base, he/she would almost invariably start with a location, "I work mostly in China, CBI and Mexico."

This era of sourcing was characterized by quota avoidance. Location was the key determining factor.

U.S. Garment Imports 2000


Value (USDmns)

Market Share

G. China

















Greater China (China, Hong Kong and Macau) was the number one supplier, but its market share was only half of what it is today. CAFTA and Mexico-both quota-free countries-were each only slightly below, with Bangladesh and Indonesia-both easy quota countries-well behind. The 2005 quota phase-out changed the game. The supplier expanded his location from somewhere to everywhere.

Based on location, we should have moved from somewhere to somewhere else-from quota-free countries to duty-free countries. This did not happen. In fact exports from the major duty-free suppliers declined while exports from the most encumbered shot up. It appeared that customers were consciously selecting those few suppliers which still did not have free trade.

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Refer the newsletter of: The Birnbaum Report/Strategic Sourcing for Garment Importers