Taiwan Number 1… Alternative to China! – Why American importers are switching production to Taiwan

Taiwan Number 1… Alternative to China!

Why American importers are switching production to Taiwan

By: John D’Angola / 26 August 2019

 

President Donald Trump is urging American companies to move back to America, or at least out of China. For those American importers looking for an easy switch, Taiwan (also known as the Republic of China, or the OTHER China, the democratic one!) has some fantastic options. 

Taiwan has been an export powerhouse for decades. First, with consumer goods. Later, after much of the low-skilled manufacturing left for Mainland China, Taiwan differentiated itself as an exporter of high-tech products. To this day, Taiwan excels in information technology, advanced materials, and a variety of other sophisticated industries.

But what about apparel and related accessories? Although it is true many of these producers relocated from Taiwan to Mainland China, many remain and continue to compete globally by offering superior quality and production capabilities. And now, in light of the tariffs on Chinese products imported into the United States, many of these products are competitive on price, too.

So are you ready to reconsider Taiwan as your new location of production? Great! This article will review which products are ripe for sourcing from this highly capable manufacturing nation.

 

Apparel

Hong Kong may be known for their custom tailored suits, but Taiwan is definitely the regional capital for performance apparel. Taiwanese brands such as Outerboro have built a worldwide following through their innovative shirts, pants and outerwear. Each item features unique tech fabrics that provide superior comfort and value-add features like four way stretch, upcycled materials, and advanced thermal regulation. 

In addition to offering better quality and more advanced features, Taiwanese manufacturers are also able to offer lower minimum order quantities compared to other manufacturers in the region.

Check our Apparel Sourcing page to learn more.

 

Socks

Earlier this year, a Taiwanese sock supplier was shocked by order for 600 million socks as Trump tariffs kicked in. They were shocked, but we were not. Socks are one product that Taiwan produces exceptionally well, both in terms of quality and price. 

Compared with other sock manufacturers, our Taiwanese partners offer superior sewing accuracy, production efficiency, and packaging options. They have produced billions of socks over the years. Because they are awesome.

Check our Socks Sourcing page to learn more about sourcing custom socks.

 

Towels

In recent years, branded towels have become essential merchandise for streetwear, fitness, and corporate segments. Fortunately for American importers, we have several outstanding sources for towels in Taiwan as well. Gym towels, beach towels, kitchen towels, you name it. 

Check our Towel Sourcing page to learn more.

 

Sunglasses 

Taiwan’s merchandise manufacturing capabilities are not limited to soft goods. In fact you may be surprised to learn that we can source custom sunglasses from Taiwan as well.

The quality of Taiwan’s sunglasses are on par with the big name brands sunglasses manufactured in Italy, and available at lower price and minimum order quantity. Their capabilities are just as comprehensive, including custom acetate colors and patterns, custom metal frame designs, custom hinges and accessories, and more.

To learn more about sourcing custom sunglasses from Taiwan, check our Sunglass Sourcing page.

 

Watches 

China may be the best place to manufacture cheap watches, and Switzerland is hands down the most reputable. But a little known fact is that Taiwan offers the best value. 

Our Taiwanese watch manufacturing partners import movements, crystals, dials and other components from Switzerland, Japan and other elite supplier locations. They then delicately assemble the final product to a standard that sets them apart in terms of cost and quality.

Check our Watch Sourcing page to learn more.

 

Umbrellas

Taiwan’s unique topography and tropical climate results in a massive amount of rain each year. So it is no wonder Taiwan has retained a strong umbrella manufacturing industry. 

Given the locals in Taiwan are both sophisticated and price sensitive, the umbrella sector is especially competitive. Low cost umbrellas must be resilient to hold up during typhoon season. Meanwhile, value-add features such as automatic open and close, extra durable fabric and upgraded handles are not the exception, but the norm.

To learn more about sourcing custom umbrellas, check our Umbrella Sourcing page.

 

But wait, there’s more! 

Much more, actually. Too much to include in this short post. So if there is anything you need manufactured that is not included on this page, comment below or contact us directly to see if we can source that in Taiwan as well.

Because Taiwan number 1 (alternative to Mainland China)!

 

Not everyone loses in a trade war: How one order for 600 million socks confirms supply chain adaptability

Not everyone loses in a trade war

How one order for 600 million socks confirms supply chain adaptability

By: John D’Angola / 19 June 2019

 

“Everyone loses in a trade war” says virtually every economist and pundit on tv. Simple yet foreboding, the warning is persuasive. But it is also fundamentally false.

 

Clearly, trade wars disrupt business as usual. But the truth is that trade wars do indeed have winners, both on a national and business level. And although the question of which nations will come out ahead long-term in the current US China trade war remains unclear, many manufacturers are clearly winning as they experience windfalls of new business.

 

One such winner is in Taiwan. A sock producer in Changhua County recently reported receiving a single order for 600 million socks. Initially planned to be sourced in Mainland China, the huge sock order was redirected to Taiwan following U.S. President Trump’s announcement that his administration would increase tariffs from 10 percent to 25 percent on US$200 billion worth of goods made in China. 

LOHO Hosiery Museum. (Taiwan Tourism Bureau photo)
Taiwanese township shocked by order for 600 million socks as Trump tariffs kick in

 

“Although Taiwan may no longer be the cheapest, it still has strong production and distribution capabilities. The 300 million pairs of socks can be entirely eaten [produced] by Taiwan,” said Wei Ping-i, chairman of Taiwan Hosiery Manufacturers’ Association.

 

Other Taiwanese industry leaders agree: while Mainland China’s low labor cost and weak regulatory environment priced Taiwanese manufacturers out of the market for most consumer products decades ago, the new tariffs imposed on Mainland China by the Trump administration now make Taiwan a prime alternative location of production.

 

Of course Taiwanese manufacturers are not the only country reaping the rewards of the trade war. Indeed manufacturers throughout Asia, especially in Vietnam and Bangladesh, are seeing significant increases to their US-bound exports. Supply chains are evolving; it seems for every manufacturer hurt by the trade war, another benefits.

 

Companies who rely on outsourcing production to Mainland China have been vocal in their disapproval. Nike and Adidas recently published an open letter to the Trump administration warning increased costs would be passed on to consumers. But this argument falls a bit flat, as inflation has remained low, under 2% annualized, throughout the entirety of the current US-China trade war, suggesting that the Trump tariffs do not directly translate into a consumer tax.

 

Massive brands like Nike and Adidas have the resources to lobby Washington to implement their preferred policy. For everyone else, considering alternative supply chains is the correct play. Manufacturers like the sock producer in Taiwan have the quality, capacity and capability to compete.

 

Versatile Fabrics – Blended Wool

Versatile Fabrics – Blended Wool

By: Tim Wang / 21 January 2019

 

Customers want their daily apparel to keep them warm in the winter and cool in the summer. After many years of research and development, manufactures and fashion designers have come back around to wool, but not just any type of wool. Specifically, merino wool. What first comes to mind is sheep’s wool, followed by the usual characteristics of itchy, scratchy, and thickness. Simply, ‘regular’ wool is not everyone’s number one choice. However, merino wool feels like fine silk against the human skin. These fibers are much finer and lightweight. This and  other characteristics of wool, allow breathable and moisture managing fabric. The ability to control moisture also helps to regulate odor by preventing bacteria growth.

 

DRAWBACKS

Even with these benefits, there are disadvantages for using fine fibers. Mainly, longevity and durability. No one wants to buy a product that has a lifespan of less than a year because that would be considered money poorly spent. To counteract this and give the consumer a product with a better lifespan, blended fabrics have quickly come to the forefront of fashion. Merino wool mixes with cotton, polyester,  nylon, and many more. The important reason for blending fibers is to produce better performance. Blending fabrics can improve the characteristics that are poor in one fiber, and mix it with another type of fabric that excels in those characteristics. In the proper ratio, blended wool can combine the best features leading to a superior piece of garment.

THE OTHER HALF

At Premium Direct Imports, we are constantly sourcing for the best quality and materials. In our search for another fabric to blend with merino wool, we were led to TENCEL®. A fiber made from eucalyptus trees that is wrinkle resistant, machine washable, and eco-friendly. Quality not only comes in the form of the product, but the ease of mind knowing it uses a sustainable and renewable process. Tencel is manufacturing is a 100% organic life cycle, meaning, the raw material and chemicals are all natural and recyclable in the development process. The smooth surface and uniform fiber structure make  Tencel a particularly stable fiber. This becomes evident thanks to the high resistance to pilling and  tearing.

 

TOGETHER WE ARE STRONGER

Both merino wool and Tencel are odor neutralizing, heat and moisture-regulating, as well as extra delicate against the skin. With our own ratio of both fabrics the drawbacks of durability are no longer a problem and the best characteristics are amplified. Head on over to our shop and check out our own custom Merino wool TENCEL® blend of short and long sleeve shirts or hoodies.

 

 

Keep an eye out on new releases . Comment and let us know what you think about merino wool or blended fabrics in the comments below. Don’t forget to follow us on Facebook and Instagram!

Factory Direct Sourcing

Factory Direct Sourcing

By John D’Angola  /  17 January 2019

 

Cut out the middleman to bring down price and increase profit.

 

PDI Answers Simple But Wrong

That is the straightforward, if incomplete, logic to factory direct sourcing. But when searching for answers to tough problems, such as maximizing profit, it is the simple solutions that sometimes get us into trouble.

Warren Buffet is famously quoted as saying “Price is what you pay. Value is what you get.” Let’s take a look at the topic of factory direct sourcing through the lens of Mr. Buffet’s guidance, to help us better understand when factory direct sourcing makes good business sense.

 

 

“Price is what you pay…”

The notion that factory pricing is lower than that quoted by trading companies requires an untenable “all else equal” assumption. We would have to ignore obvious variables like order quantity, internal operating expenses and legal costs. That would be silly.

Order quantity is usually the main factor manufacturers consider in negotiating price. Because individual buyers typically order at lower volumes compared to trading companies, factories tend to quote individual buyers higher prices. Unless the individual buyer can match the volumes of the trading company, this economic reality will reduce the potential cost savings presented by factory direct sourcing.

Next buyers must consider relevant operating expenses. Selecting and vetting a manufacturer requires expertise and time, both of which have associated costs. Communicating with manufacturers and resolving issues during and after production is equally crucial and costly. These costs are not reflected in factory direct pricing, but ought not be forgotten.

Last but not least are the costs associated with the preparation and execution of the supplier agreement, plus potential additional costs for dispute resolution. Add these expenses to the overhead required to manage the project, plus the price difference attributable to order volume, and true the price paid for factory direct sourcing becomes a bit more clear.

 

“…. Value is what you get”

Trading companies present additional value to their clients in the form of manufacturing alternatives, trade expertise and communication.

Individual factories have limited product offerings and generally lack an incentive to direct you to alternative manufacturers should your job require a product or feature they themselves cannot provide. Instead, factories often persuade buyers to fit their needs to the factory’s capabilities. In contrast, trading companies have relationships with many manufacturers and are incentivized to match the buyer to the most suitable supplier.

As their name suggests, trading companies are built for trade. Freight forwarding, export/import regulations and proper licensing are areas where both factories and buyers tend to lack the infrastructure necessary to get the products delivered smoothly. In contrast, trading companies have streamlined these processes.

Another massive advantage, one which is often overlooked, is the value trading companies offer in the form of communication. To effectively minimize errors, buyers ought to communicate with suppliers in their language. But beyond that, fluency in the terminology specific to both product and process are crucial in ensuring all technical aspects of the job are properly managed.  

 

Do the Calculation

When deciding whether to source directly from a factory or through a trading company, we recommend you ask the following questions:

Are our volumes large enough to secure good pricing?
Have we accurately assessed related operating and legal expenses?
Do we have alternative manufacturing options should we require it?
Can we get the product imported safely and securely?
Are we capable of communicating effectively with the manufacturer?

If you’ve answered “no” to one or more of the questions above, you may want to consider working with PDI.