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1. TBOND - The Solution for Your Fashion Brand
With the mission of creating outstanding products closely associated with fashion brands, We simplify the supply chain process in the apparel fashion industry, from sourcing to production and transportation, enabling our partner businesses to focus on expanding their brands and directly marketing products to consumers.
As a research entity providing optimal solutions for fashion brands, Tbond offers services such as FOB/ODM and OBM.
2. The Definition of FOB
FOB, which stands for Free On Board, is a higher-level export method compared to CMT (Cut – Make – Trim); it involves a process of buying raw materials, and selling finished products. Under the FOB method, businesses actively participate in the production process, from purchasing raw materials to delivering the final products. In contrast to CMT, exporters using FOB take the initiative to purchase necessary input materials instead of being directly supplied by their buyers.
In the Vietnam market, those in the garment industry use the term FOB to mean the all-inclusive price at customs clearance for one unit of goods (at the Vietnamese port). FOB essentially implies using the workshop’s own raw materials, equipment, and labor to complete the customer’s specified product. The FOB price includes the cost of raw materials, the production cost of the finished product, and transportation expenses (depending on the agreement between the parties involved).
3. Process and Operation Mechanism of FOB
The activities under the FOB method vary significantly based on the contractual relationships between suppliers and buyers, which can be broadly categorized into two types:
- FOB Assignment: Businesses operating under this method will procure input materials from a group of suppliers decided by the buyers. This method requires textile companies to take financial responsibility for procuring and transporting materials.
- FOB Sourcing: Businesses adopting this method receive product design samples from customers and are responsible for sourcing, manufacturing, and transporting both materials and finished products to the buyers’ port or warehouse. The key is for companies to find suppliers capable of providing specific and reliable materials in terms of quality and delivery deadlines. This method aims to provide higher value and quality for both parties.
OEM/FOB order is a term in the garment manufacturing industry referring to an order where the customer provides the design, and the manufacturing company handles the rest. In other words, the customer designs the product, and the manufacturing company independently purchases fabrics and materials, manufactures the products, and then ships them to the designated port or warehouse.
In an OEM/FOB order, the manufacturing company actively engages deeply in the production process and autonomously manages input material sourcing, from purchasing materials to delivering the final product. However, design, quality requirements, and technical specifications are provided by the customers (the ordering party) to the manufacturing company.
4. Value of FOB for Businesses
4.1. Benefits of Using FOB Orders For Manufacturing Companies
- Lower Capital Costs when Placing Orders
Customers (ordering parties) in OEM/FOB orders do not need to invest their own capital in fabrics and other raw materials, as the manufacturing company takes proactive responsibility for those costs. When negotiating the contract, the ordering party can potentially secure a better deal with the manufacturing company, and the payment timeline will follow the mutual commitment. However, the quality of the order must be carefully negotiated during the ordering process.
- Reduced Business Management Costs
The ordering party does not need to maintain a team to source fabrics meeting specific conditions and having good relationships with fabric mills, thereby significantly reducing business management costs.
4.2. Benefits of Using FOB Orders For Manufacturing Companies
- Higher Profit Margins
Because of the proactive decision-making regarding production input materials, manufacturing companies can source from familiar contacts established over the course of their long-term operations at the most affordable prices. As a result, the profit margins for manufacturing companies will be higher compared to CMT orders.
- Increased Flexibility in Operations
Business partners and collaborators of manufacturing companies can leverage their experience in long-term collaborations, resulting in more efficient operations. Operating costs will be lower, and flexibility in resolving challenges throughout the order will lead to better overall profitability for the entire group of manufacturing companies
- Higher Profit Margins
Because of the proactive decision-making regarding production input materials, manufacturing companies can source from familiar contacts established over the course of their long-term operations at the most affordable prices. As a result, the profit margins for manufacturing companies will be higher compared to CMT orders.
- Increased Flexibility in Operations
Business partners and collaborators of manufacturing companies can leverage their experience in long-term collaborations, resulting in more efficient operations. Operating costs will be lower, and flexibility in resolving challenges throughout the order will lead to better overall profitability for the entire group of manufacturing companies.
With many years of experience in the fashion textile manufacturing industry, specializing in creating samples and processing designed garments according to clients’ requests, Tbond has gained trust from numerous fashion brands. Therefore, if you are seeking a suitable partner to collaborate and grow with, Tbond is undoubtedly the right choice as a provider of FOB/ODM services with reasonable costs and excellent quality.
Table of contents
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MANUFACTURING PROCESS
FREQUENTLY ASKED QUESTIONS
The required MOQ to place an ODM
The quantity of sample production at Tbond will be flexible depending on the partner's needs. However, the necessary MOQ for each order is 300 pcs/sample to achieve optimal cost and quality during the sample production process conducted by Tbond.
Do we have the manufacturing factory?
At present, Tbond owns a system of manufacturing plants in the downtown area and in the western provinces. Additionally, we are also partners with major domestic manufacturing plants with abundant and stable labor resources, totaling thousands of workers.
How many workers are there at Tbond?
Tbond possesses a team of experienced professionals in the fashion industry with departments including Brand R&D, market research team, production planning department, customer care department along with a skilled workforce of thousands of workers.
