Financial
legal contract between the vendor and customer that clearly describes sold products and their value; the main document used for assessment of duties by the customs
commercial invoice
firm that provides services for other businesses, often used for selected apparel manufacturing processes; also known as vendors
contractor
reflects the cost of goods as well as shipping and insurance to the requested port
cost, insurance, freight (CIF)
prototype of a product made for approval of the desired design features and garment fit
first sample
individual or firm that provides services to procure and deliver products
sourcing agent
legal document that is issued by goods carrier to the shipper and includes description of goods, quantities, and port of destination; serves as a contract between the carrier and the shipper
bill of lading (BL or BOL)
apparel production firms that not only provide production services but also assist with and finance materials sourcing and some phases of product development
full-package factory
covers the costs of goods, insurance, freight, and import duty in the destination country
LDP (landed duty paid)
stage of apparel manufacturing that involves all product development activities performed before the garment is approved for production; includes design, patternmaking, grading, making first and production samples,
and
preproduction
a company that has expertise in design, product development, acquisition of materials, logistics, and importing as well as an established network of apparel factories they contract with
intermediary
a preliminary bill of sale sent by vendor to customer; includes an estimate cost of goods or services along with description of products such as quantity, value, weight, transportation charges, etc
pro forma invoice
in addition to apparel assembly to customer specifications, the factory can source and finance all materials and deliver goods on board; they do not offer any product development services
package factory
product that meets materials, construction, appearance, and fit requirements
first quality or “firsts”
the process of managing a product’s life cycle from inception, design, development of related materials, manufacturing, delivery, distribution, marketing, sale, and in some cases, service and disposal production
product life cycle management (PLM)
a brand owned and marketed exclusively by a brand manager or retailer
private brand
a guarantee to the seller that the buyer has the funds to complete the purchase and that they are reserved for the seller
letter of credit
apparel contractors that commonly provide apparel assembly as their primary service, including cutting fabric, making garments, and providing basic trims such as sewing threads, for example.
cut-make-trim (CMT) factory
also known as free on board, reflects the total cost of a product when it leaves the factory plus the cost of loading the product on board of a vessel at the port of export
freight on board (FOB)
garments made at the factory where the order will be mass produced to check for quality and any potential production issues; typically produced in all ordered sizes
production sample
shared ownership of a business or facility by two or more firms
joint venture
tariff-free trade zone that is set up by governments in developing countries to promote export through simplified import and export procedures
export processing zone (EPZ)
detailed graphic and written descriptions of product styling, dimensions, materials, production procedures, and finishing instructions for a garment
technical specifications
garments that are not first quality when they come off the production line, also known as irregulars because they do not meet materials, construction, appearance, or fit requirements
seconds
basic characteristics used to determine acceptability of the quality and resulting performance and appearance of products and services
standards
performance standards or rules established by the customer related to things like working conditions, wages, and age of workers that a vendor must follow in order to do business with that customer
vendor Compliance