John Fowler

China's Return to the U.S. Apparel Market in 2024: What Does It Mean for Margins and Domestic Manufacturing? China has made a significant return to the U.S. apparel market this year. Comparing the first quarter of 2023 to the first quarter of 2024, U.S. apparel imports from China increased by nearly 10%¹. Moreover, the average import prices of Chinese apparel fell by nearly 10% in 2024 compared to the previous year. China's market share of U.S. imports rose to almost 37% after declining over the past few years, with lower prices boosting imports from China¹. However, China is not alone in this trend. Global apparel imports also increased by 1.5% in 2024, while average worldwide prices for imported apparel fell by 8.5%². A strong dollar and competition among global suppliers have helped reduce price pressures. Nonetheless, consumer inflation for clothing rose by 1.3% for the twelve months ending in April 2024, significantly lower than the overall inflation rate of 3.6% (excluding food and fuel)³. Retail clothing sales increased by 2% in the first four months of 2024 compared to the same period in 2023, providing a bright spot in an otherwise challenging apparel market over the past couple of years⁴. Domestic manufacturing of apparel in the USA has also seen notable trends. From 2020 to 2023, the percentage of total apparel sold in the USA that was domestically manufactured has been as follows: 2020: 11% 2021: 12% 2022: 13% 2023: 13.5%⁵ With these results, I'm curious if margins have improved or if they remain squeezed. There's been a lot of discussion in the trade that inflation, Section 301 tariffs, and rising raw material costs have forced brands to pass these costs on to consumers. But with a low inflation rate, is that actually happening? Please let me know your thoughts. #ApparelIndustry #Retail #China #USManufacturing #Inflation #Trade #FashionBusiness Sources: ¹ U.S. Census Bureau - Foreign Trade Data ² World Trade Organization - Apparel Trade Reports ³ Bureau of Labor Statistics - Consumer Price Index ⁴ National Retail Federation - Retail Sales Data ⁵ American Apparel & Footwear Association - Domestic Manufacturing Reports & U.S. Census Bureau - Annual Survey of Manufactures Feel free to share your insights!

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I had an incredible conversation with Eugene Alletto, CEO of BEDGEAR, about how he is additive versus disruptive to the bedding industry! Eugene's journey from a million-dollar salesperson to an industry innovator is nothing short of inspiring. He shares valuable insights on the importance of education, innovation, and being additive rather than disruptive. Tune in, and leave your favorite quote in the comments.

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Being able to visualize your instore strategy prior to investing is invaluable. It allows you to experience and "see" what you might have missed in 2D and test various options at the click of a button. All without the expense and waste of using actual products or setups. DM me! #3Dproducts #merchandising

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Need to offset rising Amazon fees? The Low Inventory and Inbound Placement garbage – I can help with those. I was glad to hear low inventory fees were being refunded in April. But I suspect it’s just a temporary PR move. They’ll be back. And they’ll affect everyone in the industry. Even manufacturers. The fees aren’t directly on my books… But anything that cuts into your margins, cuts into mine too. So here’s what we’re doing to help: First: We just opened a new warehouse in Yiwu. It’s incredibly affordable compared to our US-based warehouses. The price difference is so drastic… We can warehouse our customers’ inventory there for free. We have a logistics team there too. So now if your order needs to go to 5 different Amazon warehouses… No problem. We can segregate and label everything from cases to container loads. Between the export infrastructure in Yiwu — And our high-speed ocean service through Matson — Transit time from the new warehouse to LA is 11 days. Next: Our partner in LA does high-speed cross-docking. With the labels we applied in Yiwu, products go directly from the container to the trucks headed for each Amazon facility. The warehouse has a turnaround time of 12 hours. So, we can move product from Yiwu to almost any FBA facility in 2 weeks. It’s high-speed drip — directly from China. So you can: - Bring in only what you need - With a quick, reliable timeline …to avoid inbound placement and low inventory fees. As an industry, we’re all in this together. If there’s something we can do to help from the manufacturing side… We’ll figure it out. What are the other options for avoiding these fees? Or what other fees can we help our sellers avoid? Let me know in the comments.

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If you’re a brand owner or work for one, this insight is for you. New factory partners frequently share that our approach is a "breath of fresh air" in the industry. Unlike their normal partners—aggressive trade companies and commission hungry agencies—we are fully client-side representatives and don't take commissions. Let me break down how that's different and why it matters. Trade companies and most sourcing agencies bake their commission into: ➤ Client purchase orders ➤ Client mold costs ➤ Client sample costs ➤ Client shipping costs They normally make money on both sides—also taking a big piece of the profit pie from factories in the form of commissions. If you work with a trade company, not only is your cost inflated, but there is a factory out there making your order who is also getting squeezed. So, when we roll up to a vetted factory with a perfect fit client not wanting a commission, it's a huge surprise. A pleasant one. What's not to love? The factory gets to work directly with a great client, building a long-term relationship. With a trade company or agency, they rarely know who they are working with, as by design, they have zero contact. With our approach, the client gets introduced to the best fit factory and avoids the heavy middleman markups that are so standard in the industry. As a brand, it may often "seem" like a deal when you work with a trade company or agency, because you aren't paying anything upfront. But the additional cost is baked and hidden in the inflated unit cost. This often adds up to 30% more on your cost of goods on every order. It's significant. This is why Xiaofeng Wu, I, and the whole team at China Product Pros love coming to work every day. We're making a meaningful change, one client and one factory relationship at a time. What do you think? Have you experienced hidden costs with trade companies or sourcing agencies? 👉 Like this content? Don't miss out! Join my exclusive monthly newsletter written for ambitious e-commerce brand owners. Make better sourcing decisions in China. No fluff, no ChatGPT used. Subscribe now in 10 seconds via the link in the comments section. #chinaproductpros #sourcingagency #chinaproductsourcing #sourcingagent #doingbusinessdifferently

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OPTMAL PERFORMANCE INDEX TEST (OPIS) Revisiting and retesting the mens size 10 ASICS Corporation Novavablast 4 running shoe. With its provided insole it weighed in at 9.4 ounces and was documented to have a 8mm unloaded heel to toe drop. Stability; Without its provided insole our mathematical model calculated a potential shoe stability index of 17.73 placing it in our database at the neutral stability category. With its provided insole it tested to have a shoe stability index of 8.67 placing it near the bottom of the neutral stability category. Stability Graded; neutral>minimal>moderate>high Potential Shoe Stability Index= (without insole) midfoot stability index+ hindfoot stability index Shoe Stability Index= (with insole) midfoot stability index+ hindfoot stability index Vertical Support (loaded heel to toe drop); Vertically loaded to 100 pounds at the midsole under the heel, without the provided insole, the Asics tested to have negative vertical support with a minus 4.34mm loaded heel to toe drop. With its provided insole it also tested to have negative vertical support with a minus 5.7mm loaded heel too toe drop. Conclusion; With its provided insole the Asics tested to have minimal hindfoot stability (VCI 13.7mm/ultra soft heel midsole) and negative vertical support (minus 5.7mm loaded heel to toe drop). With these parameters we do not recommend this shoe for those who have or have the potential for lower extremity/posterior calf complex related issues; tight and painful calves, achilles tendonitis, heel pain, plantar fasciitis, runners knee and iliotibial band pain. Suspension; With its provided insole our vertical compression index test verified a ultra soft vertical midsole (VCI 13.7mm/compressed to 100 pounds) that will provide a suspension more conducive for light statured runners. Proprioceptive Acuity; With a disparity of minus 51.13 percent between the potential shoe stability index and the shoe stability index we predict a poor translation for the midsoles ground reaction via the insole to the lower extremity. With poor midsole translation those prone to instability injuries of the foot/ankle complex should avoid this shoe. Energy Return; With its provided insole our vertical compression/release test at 100 pounds acknowledged a very high energy return that we could not calculate due to the limitations of our computer. Performance; With its provided insole and based on weight (9.4 ounces) and energy return (RBI +++/very high) we classify the Asics between a medium fast and fast category (Graded; slow>medium fast>fast>ultra fast). Recommendations; We recommend the Asics for neutral/mild pronators of light statue void of lower extremity/posterior calf complex related issues. Provided Insole Translation Results; With its provided insole the Asics lost 51.13 percent of its potential stability all due to a 11.02 percent decrease in hindfoot stability, a very poor insole translation.

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Swolverine has grown at an astronomical rate the last few years. The biggest challenge, you guessed it - scalability. We have reached a point, that if we want to continue that growth, release new product formulations, and hold our momentum, we'll need a partner. Operating cash flow is what ultimately the decider of success in this business, and with growth comes increased demands, and bigger investments in marketing and inventory. Swolverine has an incredibly strong brand presence, brand equity, and the ability to cross into multiple product categories within the health and fitness space. It's what makes a brand like ours, so attractive. If you're looking for an investment opportunity, or know of an individual or group, that would be interested in becoming a capital investment partner, or private equity partner, we'd love to hear from you. #swolverine #marketing #supplements #smallbusiness

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For the vendors and brands building retail point-of-sale reporting, how are you handling the variability in data readiness when presenting metrics back to your report users? A given retailer may sometimes be two or five days behind in providing data. This can vary by metric within the same retailer (i.e., inventory is three days behind, and sales are two days behind). How do you indicate this data variability in your reporting? Are you consistently checking and showing the most recent data across each metic/retailer combination? Are you making your report users wait until all metrics have been successfully loaded for proper WoW aggregate reporting? Are you displaying data availability on your reports as a “key”? Sreenath Reddy // Andrew Hamada // Kyle Volenik // Doug Murless

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I got invited back! In my second Podcast with Luminous founder Jared Ward we hit lightening rod topics that are generally not understood or openly talked about. Gonna be fun! - Corporate espionage - Bribery experiences - Using other companies tooling - Tooling control - Finding and using your competitors supply chain - IP books - How to sell under cost AND make money (seriously) #chinatrade #chinatradesecrets #chinamanufacturing #chinasourcing #supplychainmanagement #productionsecurity

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Do you solve a problem? Does it work? Can you feel it? Is there a simple sales cadence to follow? Will people be moved to purchase quickly? SOUND ON & WATCH THE VIDEO. This is what my prospective industry partners require to be successful. The secret ingredient in the mattress industry is a quick attention grab and customer capture rate. I spent the weekend at a local "Just for Her" event perfecting the 30 second attention grab and two minute close for Rairflow's LatAir Mattress Toppers. A year and a half of work, too many to count designs/protos, focus groups, industry advisors and testers have paid off. Here is a sample of the reactions from my weekend. DM me if you want to learn how I get the quick attention of these attendees. Here are just a few of the 97,000,000 woman in the United States struggling with hot, humid beds every night. At Rairflow we uniquely eliminate heat and moisture trapped between the sleeper and any mattress. If you sleep hot or have a cosleeper who sleeps hot visit Rairflow.com Please forward this to anyone you may know that can benefit from what we are doing.

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The gold standard for any brand is the ability to transcend generations. A recent profile in Ad Week, saluted one such brand: Carhartt, “a hard-wearing industrial brand” with an appeal that spans “laborers, rappers and fashionistas alike.” From its inception, Carhartt created a line of clothing for men working in mines and on the railroad. Throughout its growth and success, Carhartt stayed true to its values, which trace back to the overalls Carhartt made with the input of railroad workers. From that interaction, when Carhartt decided to advertise its overalls, it could speak the language of working people. From then on, Carhartt has embraced this mentality throughout its product development. This is a mindset we at '47 also share. From the earliest days of our company, our foundational values of quality and attention to detail have defined all our products and our processes. Like Carhartt, we know that these values transcend demographics–and speak to quality-conscious consumers. This is what the pursuit of longevity and sustainability is all about. #BrandLegacy, #HeritageBrands, #BrandValues, #BrandIdentity

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Great insights and super smart business moves for any company thinking about leaning into the running market. TL;DR: "REI's run business has consistently grown double digits, and it is growing “significantly faster” than total REI." More interestingly: "[...R]oad running footwear now accounts for roughly 60 percent of [REI's] running sales, with trail running accounting for the remaining 40 percent." That's an interesting flip from pre-pandemic data for this outdoor giant, and reiterates amazing growth in the running industry. Lululemon knows this, too, as they've also invested heavily in running (have you *seen* the #further campaign? #amazing).

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One of the most rewarding things I get to do professionally is this presentation - a session aimed at helping brands and their sales teams understand how most independent retailers formulate their buying plans, and how that understanding can lead to more long-term sales. Over the past few years, I have been fortunate enough to present this to dozens of brands. I’ve been in front of the sales team for the biggest brand in the outdoor industry, and startups that have one employee. The consistently surprising thing that I observe is this - most people responsible for selling to wholesale have at best a fuzzy understanding of the math that buyers use to spend their open-to-buy, and it’s a huge unlock for their success when they learn it. Knowing how and why a wholesale account spends money with you - beyond “because we make cool stuff” - gives you the opportunity to be an exceptional brand partner. Plus, it can make everyone more money. If you’re interested in learning more about how to bring this session to your team, please reach out. One other thing. This was my first time back to Outdoor Retailer in years. It’s a completely different show than what it once was . The thing that inspired me to accept this gig was that it’s mostly now made up of small brands. Some of those brands are very small businesses- just like Sunlight Sports. I hope that something that we talked about in my session helps one of those people who have risked so much on their new startup brand be successful. If so, what a great feeling. More thoughts on OR overall to come. Katie Soule thanks for the post! #outdoorretailer #outdoorindustry #independentlyowned

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Most of our clients have us build their entire supply chain. The best thing about it is… It’s scalable, sharable, & it grows new markets. The hardest stage of manufacturing is defining the product in the development stage. It’s that critical phase where every decision has consequences. And it‘s where clients are reluctant to make fast decisions. For example… If you want your product to have longer battery life, you‘ll have a bigger and heavier product. That’s not necessarily a bad thing, but it’s a decision that NEEDS to be made. Once you make your decisions, it‘s our speed of execution that‘s by far our biggest advantage. And it‘s how we power our flywheel. What‘s one thing you love about your business? I want to hear your unfiltered thoughts below. ✍

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“Just Keep It” Nike decided several years ago to sever ties with some major retail partners such as DSW and Urban Outfitters and sell less merchandise through others such as Foot Locker and Macy’s. The theory, apparently first developed by previous management prior to COVID, was that the wholesale business should be phased out. This unforced error in Nike’s long and great history represents a teachable moment that helps explain two fundamental business truths. The first is that, in the words of the great University of Chicago Booth School of Business Professor James H. Lorie, “where money is concerned, more is preferred to less.” No business can afford to rationalize giving up hard-earned revenues with the expectation that it can be replaced with more desirable sales from a different channel. The second fundamental principle is that you don’t bet some or all of the farm on a theory. Yes, the world of great retail brands is moving clearly in the direction of D-T-C. The great brands need to be ready to sell exclusively through their own physical and digital channels should third-party partners disappear. There is no point in hastening this transition. They should just keep the third-party revenue flow as long as they can, and it is presumably in their interest to help their partners stay in business. (At times, it might make sense for a high-end brand to reduce wholesale accounts for the purpose of reducing supply and increasing the aura of exclusivity. That was not the playbook here). Ralph Lauren, for example, is purposefully working to increase both AOV and the percentage of total revenues from its own stores and on-line business. But they have not made the mis-step Nike made. Retail is in transition and great brands like Nike are destined ultimately to get all the marbles as third-party retailers increasingly find they can’t compete with many of their marquis brands’ omnichannel operations. But this is a long-term transition. Nike is absolutely correct to prioritize figuring out how to become more customer-centric and using their mono-brand stores and apps to strengthen customer communications and connectedness. The objective of course is to increase Customer Lifetime Value (CLV), which means focusing on relationships with the top 20% of retail customers and increasing the number of people in that cohort. Of course, D-T-C retail is more profitable and attractive than third-party wholesale sales to struggling multi-brand retailers. Obviously, you prefer to own and control the customer relationship and capture all the data it entails. But what were they thinking? It’s not like Nike was losing money on the wholesale business. The margins were obviously considerably lower than their retail profit but margins they were. It’s called marginal revenue for a reason. It is a big mistake to trade less profitable revenues for no revenues from the same source. Business is not always binary. A swoosh in the hand is worth two in the bush.

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What is one of the biggest changes we have experienced over the last decade? Inventory reduction and buying cadence. Less goods in the back room and in storage. The front is always full, even with extra stock, as long as merchandised smartly. We used to do “Dating Deals” and try to stock up and anticipate needs. Not anymore, we want to act quickly, pay as we go, keep stock current and be ready to pounce on new products. It has also increased efficiency with our team in receiving and merchandising. Puts more pressure on our vendor partners and we appreciate them as we both try and make our businesses more sustainable and profitable. #inventory #toys #toynews #toyindustry #retail #retailindustry #brickandmortar

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Sam’s Club | ShadyPaws®️Corporation ——————————————————————- Shifting the narrative to ‘All Year’ around pet protection products in pet stores… Still today, numerous pet stores continue to underestimate the importance of year-round pet protection. While some may view shade, heat, and ground cover products as ‘seasonal’ needs, it’s crucial to remember that pets require protection from the elements all year long. As pet owners, it's our responsibility to ensure that our furry friends are safe and comfortable at all times. ShadyPaws Corporation is grateful to Sam's Club, for recognizing the importance of pet care for ‘All’ seasons by showcasing our products with such exposure which is more than we could have ever imagined. Let's work together to shift the conversation and acknowledge our consumer’s needs when traveling with animals along with time spent outdoors to ensure we prioritize year-round pet protection for ‘Pawsitively The Best®️’ in pet health care. #ShadyPawsInc #SamsClub #CEO #PatriciaDarquea #Founder #Inventor #Leadership #Entrepreneur #Business #Linkedin #WomanOwned #WomenInTech #Manufacturer #Distribution #K9 #Dog #PetHealth #Commerce #Editorial #Surfing #PublicRelations #SocialMedia #Retail #Outdoorindustry #Buyers #Buyer #Camping #Marketing #SportsIndustry #Boating #K9Training #Yachts #Hiking #Biking #Camping #SurfingIndustry #Womensupportingwomen #PublicSpeaker #PublicSpeaking #PetIndustry #Brand #APPA 🇦🇹🇺🇸

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This story might sound familiar, but it's worth retelling again. And again. Marketing to customers directly can be expensive and unpredictable. Kizik Footwear's Monte Deere says, "Gross margin is really, really great at e-commerce. What's unpredictable is the marketing expense to sell your product." So why are so many brands stuck on rigid single-channel commercial strategies when they could reap the benefits of both worlds? Having a greater presence at wholesale, through select retail partnerships, gets the brand in front of new customers at a relatively lower cost of acquisition, making the cost of selling more predictable and freeing up marketing dollars that can be funneled away from performance marketing and into building brand awareness. Read more about Kizik's gradual expansion into wholesale brick-and-mortar at the link below. #footwear #omnichannel #dtc #wholesale #fashion #retail #salesstrategy #linkedinpostsbymariopace

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