PRACTICAL BUSINESS RECOMMENDATIONS TO ESTABLISH SUCCESSFUL BUSINESS RELATIONSHIPS WITH CANADIAN BUYERS APPAREL SECTOR Prepared by Maria F. Guzman
AGE GENDA – APRIL 28, 2020 020 8:00 00AM- 10:45 45AM ❖ The Export Process 8:00 AM-8:15 AM ❖ The three stages of export preparation 8:15AM – 8:30AM ❖ Market research 8:30 AM – 8:45AM ❖ Developing a Canadian marketing strategy 8:45AM – 9:05AM ❖ Labeling requirements and Packaging 9:05AM – 9:20AM ❖ Export Price list calculation 9:20AM -9:35AM ❖ Market trends 9:35AM – 9:50AM ❖ Product Presentation ( Digital Presence, Line Sheet) 9:50AM – 10:15AM ❖ Questions and Answers 10:15AM – 10:45AM
Develop an Export Plan Export Plan Research Canadian Market Develop Marketing Strategy Find and Contact Potential Buyers Receive an Inquiry THE EXPORT PRO ROCE CESS Quote or Pro Forma Quote a Price Invoice There are many steps in the export process. Some of Purchase Order or Make an Agreement Contract them happen at the same time as other steps. For Production and Quality Check example, companies should be conducting market Packaging & Labelling research throughout the Exporting & Ukrainian Export License, entire export process Requirements Commercial Invoice, Certificate of Origin, Packing List, Required Shipping and Insurance Permits, Proof of Tariff Payments, Bill of Lading Importing & Canadian or Air Waybill Requirements Final Payment Warehousing
EXPO PORT PRE REPA PARATION Normally a successful Ukrainian exporter is going through three stages of export preparation process. Within these three stages, there are ten important steps that are highlighted below:
THE THREE STAGES S OF OF EXPO PORT PRE REPA PARATION
STAGE GE TWO WO – MARKET DEVELOPMENT
MARKET RE RESE SEARCH Ukrainian companies must take the time to examine the Canadian culture and find out how things are done in Canada in order to adapt. Part of the process includes finding the right partners. Having a good understanding of the Canadian market is essential for Ukrainian companies that want to be successful in exporting their products or services to Canada. Market research is the key to understanding the opportunities in Canada and the possible challenges that may be encountered. It can confirm that an opportunity actually exists, give insight into how a product or service may need to be changed to meet Canadian legal and other requirements, or help an Ukrainian company discovers what’s important to Canadian customers . CON ONDUCT CTING G MARKET RE RESE SEARCH Primary research: After completing the secondary research, market information is collected through direct contact with potential customers or other sources. Primary research usually demands direct, personal involvement through interviews, consultations and visits. Interviews can be done either face-to-face, on the phone, or using Skype and other electronic means .
SECO CONDARY Y RE RESE SEARCH CH: Secondary research is done in Ukraine by using reference materials and data such as studies, market reports, surveys and statistical analyses. Many of these are available online, as well as through chambers of commerce, economic development organizations, industry and trade associations. Possible Sources of Market Information - Competitors’ websites -Potential buyers websites -Canadian embassy in Ukraine -Commercial banks -Exploratory mission to Canada -Internet search engines -Attending or participating in trade shows -Online and offline commercial databases and subscription services -Conference Board of Canada and TFO Canada websites and Market Information Papers (MIPs) -Trade and business associations
DEVELOPING A CANADIAN MARKETING STRATEGY While a garment may work well for the Ukrainian domestic market, it may not be suitable for the Canadian market without modifying it somehow. An Ukrainian company may need to change the design, packaging, labelling, materials used, manufacturing process, product attributes, or a number of other things before it can sell to the Canadian market. Product modifications may be very minor and easy to make, but they can also be very costly and time-consuming. An Ukrainian exporter should be clear on what will be involved to make their product ready for the Canadian market in terms of additional cost (investing in new equipment, for example), time, and human resources, and they should make sure their company is able to undertake the additional expense. Translating labels into French and English is usually a relatively easy, cheap and quick modification. On the other hand, changing the composition, construction or design in a garment to reflect Canadian consumer tastes, might not be feasible for some companies.
MATERIAL AND ND COM OMPOSI SITION – PRO RODUCT CT ADAPTATION/ / SOU OURCI CING MATERIAL The Ukrainian companies have to import their fabrics from Italy, Germany, Hong Kong, India etc to produce their garments. Most of the SMEs produce for the local and the European market. The quality of the garments is considering “hight” compare to the quality the Canadian market is looking for. In order to succeed in the North American market, the companies have to make a product adaptation. Since the material represents 80% of the price of the garment, the Ukrainian companies faced a very difficult situation when they have to make a quotation for the Canadian buyers importing the raw material.
EXAMPLE OF OF PRO RODUCT CT ADAPTATION Product development: This SME has been able to adapt their product according to the Canadian market specification.
PRO RODUCT CT ADAPTATION
PACK CKAGI GING TRE RENDS Offering an attractive design or innovative packaging is one way to increase the interest of potential buyers in carrying a product. One of the major trends in recent years is eco- friendly packaging, including materials that are renewably sourced, biodegradable and recyclable.
EXPO PORT PRI RICE CE LIST ST PRE REPA PARATION Everyone knows the traditional maxim for setting prices in the fashion industry: double the cost for the wholesale price, and multiply the wholesale price by 2.0 to 2.5 for the retail price. However, for new brands, this exercise can be frustrating because its difficult to get good cost estimates early in the process. That’s why for new brands we recommend working backwards. Instead of starting with target cost, start with target retail price. It’s easier, faster, and will help you make better decisions. Let’s say you wanted start a line of casual button -up shirts, similar to a $125 BOSS shirt from Nordstrom’s. To get the estimated cost, we divide $125 by 2.5 ( retail mark-up ) for the estimated wholesale price of $50, and then divide $50 by 2 (wholesale mark-up ) to arrive at the estimated target cost of $25, inclusive of import duties and logistics costs.
PRI RICE CES One of the biggest challenges the SMEs have to face entering the Canadian Market, is price. MARKUP MULTIPLIER EXPORT TO CANADA REVISED Sales through a broker to retail Item Calc. $ Retail Price $50.00 Retailers markup 3.03 $33.50 = Price to retailer $16.50 Trader markup 1 $0.00 = Price to Trader $16.50 Minimum Producers markup 1.2 $2.75 = Maximum cost $13.75
https://www.thebay.com/c/women/new-arrivals/en-thread
PRO RODUCT CT PRE RESE SENTATION ( DIGI GITAL PRE RESE SENCE CE, LINE NE SHEET)
PRICE FOB Ukraine, USD LINE SHEET (COMPANY NAME) DATE: (without packaging and labeling) Ref Picture Composition Size range MOQ Lead time 300-1000 pairs 1000-5000 pairs ˃5000 pairs 75% cotton, 15% 1 polyamide, 5% lycra double and triple 300 pairs 1,5 week xxx xxx xxx 70% cotton, 10% 2 bamboo, 15% double and triple 300 pairs 1,5 week xxx xxx xxx polyamide, 5% lycra 75% cotton/polyester, 3 double and triple 300 pairs 1,5 week xxx xxx xxx 15% polyamide, 5% lycra terry socks 75% 4 cotton/polyester, double and triple 300 pairs 1,5 week xxx xxx xxx 15% polyamide, 5% lycra
MARKET TRE RENDS Source: State of affairs according to the data analysis performed by Absolunet from March 11th to 29th, 2020.
Source: State of affairs according to the data analysis performed by Absolunet from March 11th to 29th, 2020.
AGEN GENDA – APRIL 29, 2020 020 8:00 00AM- 10:45 45AM ❖ Entering the Canadian market 8:00 AM-8:15 AM ❖ Tool Box 8:15AM – 8:30AM ❖ How to find Canadian Buyers 8:30 AM – 8:45AM ❖ Cultural Differences and Challenges 8:45AM – 9:30AM ❖ Final Tips- Practical Recommendations 9:40AM – 10:00AM ❖ Recommendations Summary- Market Research Links 10:00AM-10:15AM ❖ Questions and Answers 10:15AM – 10:45AM
STAGE GE THREE - MAR ARKET T ENTRY
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