Sourcing in Bangladesh: Breakdown of costs
If you are sourcing in Bangladesh or even in China or elsewhere, have you ever wondered where your money goes?
Check out this graph showing the breakdown for textile and apparel imports from Bangladesh:
It quite telling to see that industrial costs (energy, utilities, etc.) factor in as much to the price as does labor! Increased automation over the years has clearly increased the industrial costs and decreased overall labor costs. With Asian factories scrounging to get the most out of each employee, cases of unfair labor treatment and child labor are still quite common!
Also, one can note how little is devoted to testing of the materials. Most of the 1% listed above is likely left for dyeing and washing. This makes it even clearer why buyers need to leave the quality inspections and lab testing in their own hands rather than trusting the factory to do this.