Inventory management is a balancing act. Here is how to avoid dead stock.
Start with smaller quantities to test the market before scaling.
Use pre-orders to gauge interest and fund production.
Implement just-in-time inventory systems to reduce storage costs.
Diversify your product range so a slow seller doesn't sink the whole business.
Most clothing brands fail not because of poor design but because of poor financial architecture. They execute a strong first production run, sell through quickly, and then cannot fund a re-order at the volume needed to grow. The fix is understanding unit economics before placing the first production order: cost of goods, contribution margin, break-even unit volume, and the cash cycle between ordering, production, shipment, and revenue recognition.
A healthy apparel brand targets a landed cost — factory price plus freight, duties, and inspection — of 20–30% of retail price. This leaves room for marketing (15–20%), platform fees and returns (10–15%), and a net margin of 15–20%. Brands whose landed cost exceeds 30% of retail face a structural problem: every unit of growth makes them less profitable, not more, because the contribution margin cannot absorb operating costs at scale.
Your factory is not a vendor — it is a long-term operational partner. The brands that secure the best pricing, earliest production slots, and fastest communication are those who have treated their factories as partners from day one: paying on time, providing precise specifications, giving adequate notice before peak seasons, and visiting the factory at least once a year. Trust is real currency in the Bangladesh garment industry, and it delivers compounding commercial returns.
The practical mechanics of a strong factory relationship: maintain one dedicated point of contact, pre-book production capacity for your peak season four to six months in advance, and share rolling twelve-month volume forecasts even when they are approximate. Factories invest in equipment and labor planning based on their reliable client pipeline. Brands that appear predictable earn production priority and often better per-unit pricing; brands that show up with urgent orders and no lead time pay for that urgency in cost and quality risk.
Don't compete on price alone with your manufacturer — compete on volume reliability and relationship quality. A factory that knows you will return with three more orders this year gives you materially better service than one that treats you as a transactional buyer. Be the client every factory wants to fill its calendar with, and your costs will drop naturally over time.
The standard is 30% deposit before production (TT in advance) and 70% balance before or against the bill of lading. Trusted repeat clients sometimes negotiate 20/80 splits or extended credit terms. Letter of Credit (L/C) is available for larger orders with established banking relationships.
Landed cost = factory price + freight + customs duty + inspection fee + any agent commission. For Bangladesh to USA, add approximately $2.50–$4.00 per kilogram for sea freight, 12–32% import duty depending on HS code, and $300–$600 for third-party inspection. Divide total by unit count for your per-unit landed cost.
A sourcing agent adds value when you are entering a new geography, managing multiple factory relationships simultaneously, or when your volumes are below the threshold where factories will engage you directly. Expect to pay 5–8% of FOB value for full-service representation. The commission pays for itself in time, mistakes avoided, and relationship access.
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