Product sourcing example: re-sourcing a UK brand's product from China to Turkey

The starting situation

A UK homeware brand sells a woven cotton throw through its own website and two retail accounts. For six years the throw has come from a single factory in China. Over the last two years the landed cost has crept up, sea freight has become less predictable and the door to door lead time is long enough that the brand has to order months ahead of the season. Twice it has run out of stock while the next order was at sea.

Nobody has re-tendered the product since launch. The brand does not know whether the price is still competitive, and it has no second supplier it could turn to.

The brief and selection criteria

The first step is a written brief, so every supplier quotes on the same basis. In this example the brief covered:

• Specification. Fibre content, weight per square metre, weave, size tolerances, colourways, finishing, care label and packaging.
• Order size. Annual volume and the smallest repeat order the brand could accept, so suppliers could state their minimum order quantity (MOQ).
• Target landed cost. A target per unit delivered to the UK warehouse, not a target ex-works price.
• Lead time. A maximum time from purchase order to goods in the warehouse.
• Certifications. Evidence the brand's retail customers already ask for, such as fibre content testing and social compliance audits.

The brief went out as a structured request for quotation. The free RFQ template follows the same structure.

The long list and how factories were screened

The long list covered the existing country and two alternatives: Turkey, for its home textile clusters and shorter journey to the UK, and Portugal, as a European option. The screening steps were the same in each country:

• Factory or trader. Business registration, the production address and which processes happen on site, so the brand knew whether it was dealing with the maker or a middleman.
• Capability. Whether the factory already weaves and finishes similar products for export, at the volumes in the brief.
• Audits. A factory audit at the two leading candidates, covering quality systems, capacity, sub-contracting and working conditions.
• Samples. Samples from each finalist tested against the specification and compared side by side with the current product.

The guide to manufacturing in Turkey covers where Turkish factories are strong and the trade rules in more detail.

Comparing China, Turkey and Portugal on landed cost

Each finalist was compared on landed cost per unit: the price paid plus freight, duty and the other costs of getting the throw to the UK warehouse. Duty depends on the commodity code and the country of origin^[1], and goods that meet the rules of origin under a UK trade agreement can qualify for preferential rates^{[2, 3]}. Import VAT is usually recoverable for a VAT-registered business, so it is treated as cash flow rather than cost^[4].

Landed cost per unit includes an illustrative £0.20 per unit (£0.15 for Portugal) for inspection, port charges and delivery to the warehouse. The landed cost calculator runs the same sums for any product.

In this example Turkey and China are close on landed cost per unit, and Portugal is dearer. The table does not show the bigger difference: with a lead time roughly half as long and a lower MOQ, the brand can order smaller quantities closer to the season and hold less stock.

Quality checks before volume moved

• Pre-production sample. Made from the bulk yarn and approved in writing as the quality reference for the order.
• First article inspection. The first pieces off the line checked against the approved sample before the full run continued.
• Pre-shipment inspection. A random sample checked by an independent inspector once most of the order was packed, before the balance payment was released.

The quality inspection checklist covers what to check at the pre-shipment stage.

Trade-offs and risks

• A higher unit price from Turkey means the saving depends on smaller orders and less stock, not on the invoice price.
• The duty position relies on the goods meeting the rules of origin. If the yarn or fabric comes from outside the agreement, the preference may not apply, so origin needs checking with the supplier before the first order.
• A new supplier has no track record with the brand. A trial order and the first two shipments carry more risk than an established relationship.
• Moving volume away from the current factory can affect service on the lines that stay there, so the conversation needs handling carefully.

The outcome and what changed

In this example the brand moved the throw to the Turkish factory after a trial order passed inspection, and kept the Chinese factory as an approved second source for two other lines. The bigger change was in how the brand buys:

• products are compared on landed cost, not unit price
• every product has a written specification and an approved sample
• each supplier is reviewed once a year against price, quality and lead time
• critical products have a qualified second source

Lessons for other UK buyers

• Write the brief first. Without one, quotes cannot be compared fairly.
• Compare landed cost, lead time and MOQ together. The cheapest unit price is often not the cheapest option.
• Check origin rules before counting on a duty saving.
• Run the new supplier alongside the old one until good stock has arrived.
• Keep the supplier relationship in the buyer's own name, with contracts and payments direct.

Frequently asked questions