Introduction to Merchandising

Merchandising

• The activity of trying to sell goods or services by advertising

them or displaying them attractively.

• According to American Marketing Association,

merchandising encompasses "planning involved
in marketing the right merchandise or service at the right
place, at the right time, in the right quantities, and at the
right price.”

• The planning and promotion of sales by presenting a

product to the right market at the proper time, by carrying
out organized, skillful advertising, using attractive displays,
etc.
 MERCHANDISING

• The process of identifying and understanding what target

customers want and providing their desired textile products
to them in a certain price and lead-time by making a
communication bridge between the customer and the
company.

So merchandising process involve of at least three parties:

1. Company: who offering product to the customer.
2. Customer: who is targeted by company with the help of
merchandiser?
3. Merchandiser: merchandiser places his position between the
above two parties.
 MERCHANDISING

Merchandising is executing an order from receiving to

shipment through proper following-up the in-between
processes.
 Departmental structures in merchandising

• Merchandising can be structured in numerous ways but more

commonly, it is structured on the basis of -
1. Customers
2. Products
3. Geography

On Basis of Customers:
Merchandisers are supposed to retain the customers and they are
their representatives, so the division based on customers is very
logical from this point of view.
• MerchandiserA: taking care of “IKEA”
• Merchandiser B: Taking care of “WALMART”
• Merchandiser C: Taking care of “LI &FUNGs”
• Merchandiser D: Taking care of “TESCO”
On Basis of Customers
On basis of products
On the basis of Geography
 MERCHANDISING FUNCTIONS

• Study of fashion trend and fashion forecast in association with

fashion designer;
• Studying potential target customer;
• Sourcing information about the customer and his profile;
• Sourcing information about the product, its categories, styles,
specifications, assortments, size details etc. ;
• Sourcing foreign buyer;
• Negotiating orders, cost calculation, pricing, securing orders
through master LC;
• Sourcing fabrics, trims and accessories;
 MERCHANDISING FUNCTIONS

• Placing order for the fabrics, trims and accessories materials

and making regular follow-up;
• Getting samples made, making costing and pricing of the
same;
• Rectifying samples if necessary;
• Completing the whole sampling procedure as per customer
requirement;
• Getting buyer approval of the sample;
• Estimating lead time;
• Production and shipment planning;
• Keeping track of raw material arrival, production cycle, and
organizing inspection.
 MERCHANDISING FUNCTIONS

• Monitoring production and product quality;

• Making regular liaison with the customer and keeping him
update on order & production status;
• Follow up of customer instruction in respect of packing and
packaging;
• Arranging product delivery on time;
• Follow up with the customer in respect of shipment and
informing him shipment details;
• Coordinate with shipping/ export department;
• Arranging payment against export order;
• Quick response follow up in respect of any of the buyer’s
query.
 ROLE AND RESPONSIBILITY OF
MERCHANDISER

• Securing order, sourcing materials and constant follow-up with

the customer;
• Coordinate with all the concerned departments of
manufacturing factory, supplier organization and the buyer.
• Needs to cut a balance between quality, lead time, delivery
schedule and price of the merchandise;
• Organize the purchase of materials, follow-up of production,
costing, quality & delivery schedule under tight deadlines.
 LEAD TIME

• The time between the initiation (starting) and completion

(ending) of a Process/Production process.

• Lead time is the amount of time that elapses between when a

process starts and its completion. Lead time is examined
closely in manufacturing, supply chain management and
project management, as companies want to reduce the amount
of time it takes to deliver products to the market.
 LEAD TIME FOR DIFFERENT PROCESSES
LEADTIME FOR AOP KNIT FABRICS

Leadtime
Type of work Remarks
(in days)
Yarn Leadtime 10 To be counted from opening yarn BTB LC.
Knitting Leadtime 10 To be counted from yarn inhouse date
1st submission of AOP strike-off 10 To be counted from receipt of color standard and artwork
Comments on 1st submission of
7 To be counted from receipt of lab dip
AOP
strike-off
Revised submission of AOP strike- 7 To be counted from receipt of AOP strike-off rejection comment
offs
Comments on re-submission of
7 To be counted from receipt of revised submission of AOP strike-off
AOP
strike-off
To be counted from AOP strike-off approval date. (provided that
Bulk hanger submission & PP 20
ground fabric is ready)
fabrics
Bulk hanger approval 7 To be counted from receipt of bulk hanger
Fabric quality
IMPORTANT check at central
NOTES: 2 To be counted from once fabric is inhouse at Central store
store
1) For any new quality of fabric, pls consider 2-4 weeks (depending on yarn availability) of fabric approval time.
 LEAD TIME FOR DIFFERENT PROCESSES
LEAD TIME FOR SOLID DYED KNIT FABRICS

Leadtime
Type of work Remarks
(in days)
Yarn Leadtime 10 To be counted from opening yarn BTB LC
Knitting Leadtime 10 To be counted from yarn inhouse date
1st submission of Lab dips 7 To be counted from receipt of color standard
Comments on 1st submission of Lab
7 To be counted from receipt of lab dip
dip
Revised submission of Lab dips 5 To be counted from receipt of lab dip rejection comment
Comments on re-submission of Lab dip 7 To be counted from receipt of lab dip

Bulk hanger submission & PP fabrics 15 To be counted from lab dip approval date. (provided that greige is ready)
Commensts on first bulk 7 To be counted from receipt of bulk hanger
Resubmission of bulk hanger & PP
7 To be counted from receipt of rejection comments
fabrics
Comments on resubmission of bulk 7 To be counted from receipt of revised bulk hanger
Leadtime for dyeing completion of full
25 To be counted from lab dip approval date. (provided that greige is ready)
qnty
Fabric quality check at central store 2 To be counted from once fabric is inhouse at Central store

IMPORTANT NOTES:

1) For any new quality of fabric, pls consider 2-4 weeks (depending on yarn availability) of fabric approval time.
2)Fabric dept will need to check and approve the shade of the first batch internally and go for dyeing of consequent batches.
If they have confusion on shade matching/qualityModf f.Mirsatnbiarutczhz,atmheanntChehyoswhdohuud
l rys,eAesksicsotamnmtercial approval to merchandising
3) For grey marl, yarn inhouse to first bulk submission to be 15Pdraoyfessos r,CTEC
 LEAD TIME FOR DIFFERENT PROCESSES
LEAD TIME FOR YARN DYED KNIT FABRICS

Leadtime
Type of wo r k Remarks
(in days)
Yarn Leadtime 10 To be counted f r o m opening yarn BTB L C
1st submission of yarn dips 7 T o b e c ount e d f r o m receipt of c olor st andard
Comments o n 1st submission of yarn dip 7 T o b e c ount e d f r o m receipt of y a r n dip

Revised submission of yarn dips 5 T o b e c ount e d f r o m receipt of y a r n dip rejection c o m m e n t

Comment s o n re-submission of yarn dip 7 T o b e c ount e d f r o m receipt of lab dip
S u b m i s s i o n of stripe layout in available
7 T o b e c ount e d f r o m receipt of st ripe a r t w o r k
color
Comment s o n stripe layout 7 To be counted from receipt of t he fabric length for st ripe la y out
Bulk Yarn Dyeing 20 To be counted from receipt of yarn dips and layout approval
B u l k hang e r s u b m i s s i o n & P P fabrics 5 To be counted from bulk yarn dyeing completion date
C o m m e n s t s o n first b u l k 7 To be counted from receipt of bulk hanger
Leadtime for completion of whole bulk
10 T o b e c ount e d f r o m a pprov a l o n first b u l k
knitting
Fabric quality c he c k at central st ore 2 T o b e c o u n t e d f r o m o n c e f a b r i c is i n h o u s e a t C e n t r a l s t o r e

I M P O R TANT NOTES:

1 ) F o r a n y n e w q u a l i t y o f f a b r i c , p l s c o n s i d e r 2 - 4 w e e k s ( d e p e n d i n g o n y a r n a v a i l ab il ity ) o f f a b r i c a p p r o v a l t i m e .

2) Fa b ri c d e p t will n e e d t o c h e c k a n d a p p r o v e t h e s h a d e o f t h e first d y e d y a r n b a t c h internally a n d g o for d y e i n g o f c o n s e q

3 ) U N T I L a n d U N L E S S t h e b u l k h a n g e r is a p p r o v e d , thePbroufleksskonr,iCttTiEnCgc a n N O T b e s t a r t e d .
 TIME AND ACTION (TNA) CALENDAR

• TNA: Normally merchandisers prepare a plan of the order in a

spreadsheet by listing down the key processes in first column
and planned date of action for each process in the next column.
This planning sheet is popularly known as time and action
calendar (TNA). Once TNA calendar is made, then it can be
easy for merchandiser list down their daily 'to do list' and
taking it one by one.
IMPORTANCE OF (TNA)

 It helps to streamline the pre-production activities.

 Easy understanding of order processing.
 Clear understanding of timelines given by buyer.
 It gives the clear idea about the minor or sub activities that
need to perform during order processing at different level.
 TNA gives the idea about the status of running order and talks
about delay or deviation, if any
 TNA gives the dates at which raw material need to be sourced,
in a way it helps to optimize the inventory.
 TNA also reduces the risk of delivery delay.
FACTORS TO BE CONSIDERED WHILE PREPARING
TNA

 Production capacity of plant

 Style type of merchandise
 Festivals of manufacturing country
 Holidays
 Shipment details
 Festivals of country from where raw material is imported
 Logistics facilities
 Lead time estimated by buyer
 Style complications
 Fabric and trims manufacturing complications
 Buffer required from each department
 Political stability of the country
 Flexibility of freight forwarder
 Response time from buyer at different stages
 Lead times of various activities like L/C payment, custom clearance, etc
 Cut off dates for shipments
 TNA EXAMPLE

SL Time Frame Action to be taken

1 01.03.2014 Received Master L/C. for an Export Order

2 03.03.2014 To receive proforma Invoice for piece goods &
accessories

3 08.03.2014 To Open Back to Back L/C for fabric

4 09.03.2014 To Open Back to Back L/C for trims & accessories

5 10.03.2014 To submit fit sample to buyer

6 15.03.2014 To receive fabric samples
from supplier
7 15.03.2014 To received trims &
accessories sample
8 16.03.2014 To received comments on
fit sample
9 18.03.2014 To submit size set sample
to buyer
10 23.03.2014 To receive
comments/approval of size
set sample
11 25.03.2014 Ex-factory of fabric
12 25.03.2014 To submit PP sample to
buyer
13 26.03.2014 Fabric supplied from
supplier port
14 30.03.2014 To get approval of PP
sample from buyer
15 To receive trims &
9.4.2014 accessories at store

16 10.4.2014 To receive fabric at

store
17 11.4.2014 Inventory control to
ensure all goods in
place
18 12.4.2014 Fabric cutting start

19 13.4.2014 First production rum

commences

20 16.4.2014 To submit production

samples to buyer

Md.Maniruzzaman Chowdhury,Assistant
Professor,CTEC
21 18.4.2014 To start finishing of garments

22 18.4.2014 Receipt of cartons at store

23 20.4.2014 Cartoning commences

24 23.4.2014 Sewing Complete

25 24.4.2014 Finishing Complete

26 25.4.2014 Pre-Shipment Inspection

complete
27 25.4.2014 Ex factory of merchandise

28 27.4.2014 Handing over to shipping line

29 28.4.2014 Shipping of goods

30 29.4.2014 To send shipment

confirmation documents to
buyer
 FLOW CHART OF MERCHANDISING ACTIVITIES

Marketing

Buyer Request

Pricing-costing

Order Receipt & confirmation

Order execution through coordinationg

following steps as per TNA
 FLOW CHART OF MERCHANDISING ACTIVITIES

Sampling Fabric Trims/Accessories

• Development sample • Receive color standards • Source suppliers

• sample preparation and • L/D or Y/D booking • Develop
send to buyer for • L/D or Y/D preparation trims/accessories
approval and send to buyer for • Trims/accessories
• Proto sample approval preparation and send to
• sample preparation and • Fabric quality send to buyer for approval
send to buyer for buyer for approval • Trims/accessories
approval • Fabric / Yarn dyeing booking
• PP sample booking • In-house
• sample preparation and • 1st Bulk dyed fabric trims/accessories
send to buyer for send to buyer for shade
approval approval
• Production sample • continue dyeing
• sample preparation and
send to buyer for
approval.
FLOW CHART OF MERCHANDISING ACTIVITIES

Start Production

Arrange Inspection after

Production

Vessel Booking (about 15 days

prior to inspection)

Export documentation &

logistics
COLOR STANDARDS

• Color std. may be received by two ways-

1. Color swatch,
2. Pantone no. (TCX, TPX from color palette)
 SAMPLING

• Sample: A few item or goods taken from a large number of

similar goods are called sample.

• Sampling: Sampling is the most technical feature of the

merchandiser’s job. This involves developing new products or
taking some existing products to the new customer to meet the
customer demands.
 SAMPLING PROCESS

1.Getting buyer requirement: On Getting Buyers

query
reception of the request from the
buyer, merchandiser evaluates the
Sample
request. preparation
–Clarify the sample specifications
with the help of R&D people.
Evaluating Results
–Checking possibility:
•If not possible, buyer should If
ok
be informed instantly.
Packing and
•If possible, its completion and dispatch
dispatch date is to be confirmed
to the buyer ASAP keeping in Buyer’s feedback
view all processes time.
 SAMPLING PROCESS
2.Sample Preparation: After doing the necessary calculations,
merchandiser first checks whether such sample in stocks or not?
–In case of sample already present in finished stocks in the right
quantity and quality, then he can inform the buyer about the
dispatch date in this regards
–In case, Merchandiser does not have any sample available, he
will forward the sample request (sample booking) to the relevant
department.

3.Evaluating results: merchandiser gets the results from the

Quality Control lab and compares it with the standards specified
by the buyers. If the sample results are consistent with the
desired results, then it can be sent to the buyer.
 SAMPLING PROCESS
4. Sample packing and dispatch: the sample is properly
packed for its safe arrival at the destination. For the
sample dispatch, the merchandiser sends the sample via
courier and puts complete detail along- with the sample
for buyer reference.
5. Seeking buyer’s comments: Once the sample reaches
the buyer, merchandiser gets the comments from the
buyer and keeps records of it.
–If sample is approved, then he go for bulk production or
next processes.
–If rejected , requires rework according to buyer
comments.
 TYPES OF SAMPLES

 Prototype sample
 Fit sample
 Size-Set sample
 Sales man / Marketing /Showroom sample
 Pre- production sample: (PP sample)
 Approved samples
 Production Samples
 GPT sample (Garment Performance Test)
 Photo Samples
 Counter Samples
 TYPES OF SAMPLES

• Prototype samples: These are samples developed during the preliminary

stages of product development. They are made by similar but not always
exact fabrics & trims. But must be made as per buyer sketch, specification
sheet.

• Size-Set Samples: A sample of each size is required by the buyer after

giving comments on “ Prototype Samples”. Size-Set samples are requested
to check the accuracy of each size pattern.

• Fit sample: Fit sample is made and sent to conform the fit of the garment
on live models or on dummy and for approval of construction details.

Md.Maniruzzaman Chowdhury,Assistant
Professor,CTEC
 TYPES OF SAMPLES

• Sales man / Marketing /Showroom sample: These are the samples used
by the buyer for promotion or sale of their product. It is a special order
from buyer. These are required in exact fabrics, shades and accessories.
More quantities are required in this case and payments are made by the
customer.

• Pre- production sample (PP sample): Must be in actual fabrics, trims and
accessories. Bulk fabric cannot be cut until these samples are approved by
the buyer.

• Approved samples: Upon approval of the pre-production samples by the

buyer, they will be sealed and tagged with comments if necessary. The
approved pre-production samples is called approved samples.
 TYPES OF SAMPLES

• Production Samples: Representative samples taken from a production line

on random basis by buyer’s representative is called production sample. A
production samples approved and accepted by buyer may represent
shipment samples.
• GPT sample (Garment Performance Test): The main purpose of GPT is
to perform the physical and chemical testing on garment to ensure the
performance of the garment. The tests done on garments are: Shrinkage,
Color Fastness, Seam performance etc. Garments for GPT sample can be
done along with Size Set sample. Normally, GPT Sample is sent to 3rd
party inspection and results are sent to both factory as well as buyer.

• Photo Samples: These samples are photographed for making brochures,

catalogs, etc for distribution to stores and for end-use.
 TYPES OF SAMPLES

• Counter Samples: Sometimes required approved samples in different

departments but there is only one approved samples. So merchandiser can
reproduce a number of samples against the available approved samples.
REQUIREMENT OF SAMPLE SUBMISSION
 SAMPLING DOCUMENTS

• There are some reports along-with the sample to be sent to the

customer.

A. Covering letter
B. Specification sheet
C. Sample tag
 Sampling Documents
• Covering letter: In covering letter, Merchandiser mentions the
below details:
 The name of company which asks the sample
 Contact person
 Phone no of destination
 The brief description of the sample
 The weight and quantity of sample
 Sampling Documents
• Specification sheet: In specification sheet, Merchandiser
mentions the technical aspects of the sample with quality lab
results. Example- Knitted Garments T-Shirt:
 GSM of Fabric
 Fabric Type
 Half chest
 Garments length
 Sleeve length
 Armhole
 Shoulder with etc.
 Sampling Documents
• Sample Tag: The sample Hang-tag is attached to the
fabric/garments. It can contain the following information:
 Sample Number
 Garment style #
 Composition
 Fabric/Garments type
 Shade
 GSM
 Price
 Qualities of a Merchandiser
• Good knowledge about fiber, yarn, fabric, dyeing, printing,
finishing, dyes, color fastness, garments production, etc.
• Clear conception of the usual potential quality problems in the
garments manufacturing.
• Good knowledge of the usual raw materials inspection systems &
garments inspection system
• Knowledge of the quota system used in each of the production
countries, duty rates, custom regulation, shipping and banking
documentation etc.
• Right consumption knowledge of various goods
• Costing knowledge of raw materials
• Order getting ability
• Sincere& responsible
• Hard worker
 Qualities of a Merchandiser (contd…..)
• Communication Skills (Verbal, Written, Listening)
• Managerial Skills (Technical, Human, Conceptual)
• Well-Groomed Personality
• Accessibility, Available and Mobility
• Politeness & Tolerance
• Coordination and Follow-ups
First and foremost, you’ll need to have a passion for retail.
Employers will look for commercial awareness, numeracy
and the ability to think logically, and you will need to be good
at quickly identifying problems and recommending solutions.
It will help if you have experience of working with customers
and experience working in a retail environment will set you
ahead of the competition.
 Scope of Merchandising

Manufacturin Buying
Brands g Companies Houses/
Liaison offices
 Scope of Merchandising
(contd….)
• Brands: Merchandising doing all sorts of marketing research,
promotions, fashion designing, selecting new fabrics, garments
styles and shades for the upcoming seasons.
– Example: Adidas, Benetton, Calvin Klein, Esprit, Hugo Boss, J. Crew,
Izod, Levi's, Lee etc.

• Manufacturing companies: Merchandisers are usually involved in

the completion of sampling, price negotiations and then following-
up of production. They liaise with brands directly or with their
liaison office/buying house in order to get their work done.

• Buying House/Liaison offices: Merchandisers play the role of

Middle-men between the above two situations and make a
communication bridge. Their purpose is to get the work done from
manufacturers as per their customer’s requirement.
 Order Negotiation
• Orders that have been sent to factories will be negotiated for price,
delivery, quota and quality etc. The order negotiation between the
buyer and the manufacturer is not always an easy task. The buyers
are always trying to get this garments made at very low prices whilst
the manufacturers are hoping they will get at least 2 per cent more
than what they got last time for a similar style.
• The buyer always has a target price for the merchandise he hopes to
buy. He has already finished his home work and fully aware of the
market price for the particular type of garment. Therefore, he will do
his best to buy the garments bellow his target price or for his target
price. We should not forget the globe is full of manufacturers and
suppliers. The buyer will certainly move to another manufacturer or
country if he fails to buy at his price.
 Order Negotiation
• On the other hand, the manufacturers will promise the best quality
and prompt delivery to convince the buyers to pay extra dollar or
two for his merchandise. It is rather difficult to convince a buyer to
pay more than his target price, but it may be possible to do so if the
company has a good relationship with the buyer or if the company
has a very good reputation for excellent performance. In other words
a good image should do the trick.
• Buying offices or their representatives should not consult
companies operating at very high CMT to do very low priced
merchandise. Therefore the buying offices not only should
have knowledge on company’s performance but also their
average CMT prices.
 Order Negotiation
• Another important aspect in the order negotiation is to know the
fairly accurate cost of making the garment. Most factories do this in
a hurry and invariably arrive at out of focus cost. This situation will
cause frustration to both parties during an order negotiation. The
buyers are generally more conversant with the costing and would be
able to judge almost immediately the manufacturer’s operations if
the price quoted is very much different from his target price,
• If the quoted price is higher it may be due to

1. Higher overheads in the factory

2. Lower productivity in the factory
3. Higher mark-up (the amount added by a seller to the cost of a
commodity to cover expenses and profit in fixing the selling price.)
4. Raw material cost at high prices
5. Wrong consumption etc.
 Order Negotiation
• However the Buyer may not be that dissatisfied if the price quoted is little
higher than his expected price. We might think that the price would be able
to bring it down through negotiations. He might offer his help to improve
productivity consumption and in the purchase of raw material at very
competitive prices.
• If the quoted price is significantly low, the buyer might think the factory
is not capable of manufacturing his goods for his satisfaction. Low price
would reflect bad on the factory rather that securing he order. It looks rather
funny, because we are in era where prices are at rock-bottom but still there
is a minimum price which is offered by the buyer. Anything below means
poor quality merchandise.
• Therefore it is paramount importance to be at least 80 percent accurate -
the costing of a garment. It must also be remembered that the buyer will not
buy a particular garment at one price from two different companies. The
successful company will be offered the contract to manufacture.
 SOME MERCHANDISING BOOKING FORMATS

• L/D or Y/D booking:

Booking date: 9/6/2014
Delivery date: 9/9/2014

Fabric Quality
style# Factory ref. no. Fibre construction color color comments
composition weight /Finish
name std.
1 100% cotton 180GSM Regular S/J Sweet as L/D orY/D
MGK7022 2013/78 Lilac swatch booking
2 100% cotton 180GSM Regular S/J Baby as L/D orY/D
Pink swatch booking
3 100% cotton 180GSM Regular S/J Deep as L/D orY/D
Blue swatch booking
nameofmerchandiser nameoflabmanager
IssuedBy Receivedby