GLOBAL SOURCING STRATEGY Global Sourcing Strategy

bangladesh cambodia taiwan thailand vietnam

Taiwan Vietnam bangladesh thailand cambodia

KRISTIN SEARS JESSIE KUNKEL EMILIE SOBEL Kristin Sears ANDREA MCCARREL Jessie Kunkel MARIA AYRES Emilie Sobel

Andrea McCarrel Maria Ayres

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ABSTRACT

At JAKE Handbags, we strive to promote our vision, accessible empowerment, throughout every aspect of our business. Our school handbags and backpacks are trendy and functional, perfect for a fashionable and educated young woman on a budget. We want to ensure that our young customer exudes confidence and creativity through the handbags and backpacks she carries at school. Through the sourcing and manufacturing of JAKE handbags, we continuously express our core business values, standards reflective of the girl who carries them. In addition to providing a high quality, fashionable handbag and backpack, we are also concerned with the affordable price of our products. For a courageous young woman, an affordable school bag is essential. In order to keep our retail prices low to accommodate her, our manufacturing costs need to be just as low, without sacrificing quality components and products. Our mission at JAKE is to find 3 countries and manufacturers within those countries conducive to manufacturing our product and stable for production. Our owners at JAKE Handbags have fully researched Taiwan, Cambodia, Bangladesh, Vietnam and Thailand and through this extensive research, have found the top 3 countries and top suppliers within those countries to produce our handbags, keeping in mind our core values and customer needs. With the country research as our platform, we have developed a strategy to leverage our prices, quality and lead-time, while still ensuring viable sourcing guidelines. This strategy is how JAKE Handbags will produce, manufacture, transport, price, source our products within the selected countries. As a company, we strove to develop a strategy in order to increase opportunities and minimize risk. Our strategy includes many factors, like country and supplier analysis, costing negotiations, and the evaluation and analysis of strategy development factors. We believe that this sourcing strategy aids us in continuing to provide the best products for our customers.

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TABL

E OF CONT ENTS

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6 8 9 10

I N T RO D U C T I O N
Company Profile W h o We A r e Product Offering Ta r g e t M a r k e t

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S T R AT E G Y DEVELOPMENT P RO C E S S
Why Develop a Strategy? Va l u e s Sourcing Guidelines P r o d u c t s , Vo l u m e s & Seasons

03

02

12 13 15 16

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C O U N T RY A N A LY S I S

16 H i g h l i g h t s & Te x t i l e Industry of Countries 20 B a n g l a d e s h 23 C a m b o d i a 29 Ta i wa n 32 T h a i l a n d 36 V i e t n a m 41 C o u n t r y S e l e c t i o n 44 Ra t i n g s S p r e a d s h e e t

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S U P P L I E R A N A LY S I S

05

04

70

46 S u p p l i e r S e l e c t i o n 47 H i g h l i g h t s o f S u p p l i e r s of Countries and Selections 47 B a n g l a d e s h 53 C a m b o d i a 55 Ta i wa n 62 T h a i l a n d 64 V i e t n a m 68 Ra t i n g s S p r e a d s h e e t

COSTING

70 L i n e P l a n / P r e l i m i n a r y Costing 72 I n i t i a l C o s t s v s . Preliminary Costs

S T R AT E G Y DEVELOPMENT

74

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C o u n t r i e s 74 S o u r c e s 77 P r o d u c t s a n d P l a c e m e n t 82

S O U RC I N G S T R AT E G Y
Vietnam Ta i wa n Bangladesh Final Placement

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85 87 88 94

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C O M PA R I S O N O F FINAL COSTING

96

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P r e l i m i n a r y C o s t i n g v s . 96 Final Negotiated Prices P r e l i m i n a r y M a r g i n s v s . 96 Ac hieved Margins

CONCLUSION

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09 10

P r o c e s s O u t c o m e s , H o w 98 JAKE Mitigated Risk, Benefits for JAKE and our Suppliers, Future Opportunities and Po t e n t i a l

APPENDIX & BIBLIOGRAPHY

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C o s t S h e e t s 101 Te c h Pa c k s 126 S o u r c i n g G u i d e l i n e s 170 M a n u f a c t u r e r E m a i l s 175 B i b l i o g r a p h y 182

COMPANY PROFILE
Mission Statement: JAKE Handbags offers a line of trendy and functional school bags for the fashionable and educated woman on a budget Vision: Accessible Empowerment Values: Teamwork, knowledge, integrity, courage, communication, consensus, appearance, creativity, growth and perserverance JAKE Handbags is a company dedicated to accessible empowerment. A line of trendy and functional school bags for the fashionable and educated young woman on a budget, we care about so much more than just looking good. JAKE aims to create a line of backpacks that are not only fashion forward, but also encompass the values and beliefs that are important to the young and educated woman. Our promise to incorporate every value and belief is going to be included every step of the way; throughout the production and the sourcing of the JAKE backpacks. JAKE aims to create a product that is fashionable, convenient and grows with the customer. As we explore each country, we will discover and utilize the best manufacturers and corporations that we believe will best suit our product and our customer. With extreme detail on every aspect, including social, political, economical, cultural, and geo-graphics that are apart of each country, we will report every single thing found to ensure a great product and a great place to manufacture our bags. Our standards are high, are values are of the utmost importance and our promise to our customer, as well as our employees is key.

INTRODUCTION
-COMPANY PROFILE -WHO IS JAKE? -PRODUCT ASSORTMENT AND ILLUSTRATIONS -PRICE RANGE -TARGET CUSTOMER

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What We Stand For

While the cultural elements of our countries are our priority, a thorough evaluation of the manufacturers for our production and the research of trade-agreements to ensure safe work environments will make sure that it is safe for the employees located at all of our facilities. Analyzing the cost of manufacturing to ensure that every detail in the process is cost effective and of highest quality possible, this report is to provide the knowledge and information that goes into creating a strong strategic plan to benefit our company and the customers apart of JAKE. Our core company values are a strength for our company and we continuously conduct business with these in mind. We stand for integrity, teamwork, communication, growth and creativity. Our customer is extremely important to us, and her happiness and satisfaction with our product and everything that goes into it is what keeps JAKE going as a successful company. JAKE Handbag price points are relatively cheap and directed to the fast fashion consumer on a budget: The Backpack/Foldover Bag $50, The Drawstring Bag $30, The iPad/Tablet Bag $25, The Laptop Bag $35, The Bucket Bag $40. This report will provide you with the risks, the benefits and the information for each country we have chosen to conduct business with. JAKE is all about accessible empowerment aimed towards the fashionable and educated young woman. We want to educate you on the products we make, where we make them and every other details that are included.

Inspirational Images: (left to right) Bucket Bag, Backpack/Foldover Bag, Drawstring Bag, Laptop/Tablet Bag

Backpack/ foldover bag

STYLE #1 RETAIL PRICE: $50

5 STYLES FOR FALL/WINTER 2014

tablet bag

STYLE #2 RETAIL PRICE: $25

laptop bag

STYLE #3 RETAIL PRICE: $35

bucket bag

STYLE #4 RETAIL PRICE: $40

drawstring bag

STYLE #5 RETAIL PRICE: $30

ALL BAGS ARE LINED WITH PANTONE 072C ROYAL 9 BLUE SUEDE

G AR

U C T

E M O T

JAKE Handbags caters towards a young woman, within the ages of 16 to 24, who also reflects the values of our company. As a woman, education is important and essential for personal growth and success; our customer strives to achieve these goals daily. The JAKE customer is educated, fashionable, empowered, confident and creative. Through these values and through the use of JAKEs bags, she is able to succeed everyday through personal and educational goals. JAKE was created in order to produce a line of handbags for a high school or college aged woman who was growing and finding herself along the way. Throughout these crucial years, Jake is boys name found in many typical high school situations, and tends to be a typical first crush type of man. We wanted to express this fun and young attitude in our brand name and in our image. Not only is our customer young and educated, but she enjoys being innovative and having fun with everything that she does. Through communication and teamwork, she is able to explore her interests and have a sense of self-acceptance. Friendship is also extremely important for our JAKE customer. How she interacts with others at school or on campus is reflective of the bag she carries. With a sense of creative fashion, she is aware of her appearance, but does not let that stop her from being courageous and persevere. Our mission at JAKE is to provide handbags, backpacks and other school essentials to our customer so they will feel empowered, self-accepted and confident. As a team, JAKE Handbags will continue to grow with our consumer, realizing their wants, needs and styles as they grow as a woman. JAKE Handbags provides fashionable handbags to a young customer who is driven, empowered and creative, unafraid to take risks and feels confident every time she carries any of our faux leather bags.

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ABBEY JACOBS
Age: 19 From: Long Island, New York Student at Syracuse University, majoring in Communications Supported financially by her parents, but has a part time job for extra money Originally from Long Island, New York, Abbey has an interest in journalism such a fashion writing, and hopes to grow up and own her own PR firm in New York City. Abbey enjoys hanging out with her friends and while she prefers dinner parties over going out, she finds personal appearance and creativity important. Abbey has her own sense of style but loves to collect and read fashion magazines and blogs. Her favorite stores consist of ZARA, Free People, Urban Outfitters, Forever 21, Nasty Gal and vintage stores where she can find cool accessories no one else will have. She loves to mix and match and isnt afraid of taking a risk. Abbey finds hand bags a huge importance to any type of outfit and collects different colors, sizes, styles and brands. She is a student on a budget, her parents allowance and minimum wage and tips she receives from working at her schools book store coffee shop.

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As a fashion company, a sourcing strategy is necessary for international expansion and for international sourcing and production. At JAKE Handbags, we want to perservere and always strive to do more for the company and for our customers; therefore, sourcing internationally allows our costs to lower and our retail prices to lower, as well. In this way, we are increasing profit. Developing a strategy is necessary to leverage our resources and economies of scale in relation to our manufacturers. In order to remain a viable business, we need to have alternatives, sourcing in other countries and multiple countries, rather than just the United States. In this way, sourcing internationally maximizes opportunities and minimizes risks. The purpose of building a strong strategy for JAKE Handbags is to develop a successful plan for product placement for our bag styles. Sourcing for our products will be done outside of the United States because domestic production is very expensive, and there are numerous respectable manufacturers in other countries, such as the ones we have researched and contacted about out products. Our countries of choice have been narrowed down to Vietnam, Bangladesh, and Taiwan, countries that are filled with

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suppliers that manufacture leather and faux leather handbags to brands such as Coach, Walmart, Disney, and Michael Kors. Our plan identifies the most consistent manufacturers with the best services, prices, sourcing guidelines, and reputation. This plan also identifies the breakdown of our products based on style, season, and quality for our bags. This strategy represents the best possibilities for reducing risks, and maximizing our margins all while keeping up with our values and sourcing guidelines. As we source our products and production overseas, JAKE continue to keep our customer and company values in mind. With sourcing guidelines reflective of our company and our values, we strive to find the best options for production and a solid strategy that fits with our company, our product and our customer.

STRATEGY DEVELPMENT PROCESS -WHY DEVELOP A STRATEGY? -VALUES -SOURCING GUIDELINES -BREAK DOWN # OF PRODUCTS, VOLUMES & SEASONS

Our following sourcing strategy and research is evaluated and based on many factors reflective of our company. For example, our company values are found specifically in our sourcing guidelines and are utilized in every way that we do business. At JAKE, our goal and future outlook is to grow by 15% every year, doubling our revenue within 5 years. Other goals include international expansion and further distribution to stores like Zara and ASOS. Our vision is to continue to provide accessible empowerment through our handbags and through our sourcing strategy, will we do so, as well. Our strategy is also based on our customer requirements, which include a fashionable school bag at an affordable price point. Our customer wants great quality in their fabrics and components, but at a reasonable price and that is exactly what JAKE provides. In order to grow as a company, we also base our strategy on our profitability requirements in order to make a profit. The fashion industry is also turning towards a more fast-fashion experience, which we need to consider in our strategy; our products are trending currently and we need to provide great quality at a great price point to our customers.

VALUES

When it comes to sourcing products, JAKE Handbags takes pride in our strong business ethics, aspiring to the highest ethical and legal standards today. We only work with vendors and suppliers who share that commitment and to achieve the quality of backpack that our customers expect. Our mission is to ensure our vendors are efficient, safe and ethical to produce safe, reliable and quality backpacks. Social compliance, supply-chain sustainability, product safety and quality, factory investigating and operations are many of the teams at JAKE that works for responsible sourcing. Our sourcing guidelines derive from our core company values, some of them are -Teamwork: JAKE is a team and our goal is to build strong relationships with our vendors and customers to achieve the best results possible -Knowledge: Our bags are for women who are either in school or have recently entered the workforce- they help cultivate knowledge. We strive to be knowledgeable on our customers, our products, and the world around us in order to practice the model we preach. -Integrity: Our customer is one that is honesty and sincere- our sourcing practices strive to do the same. As a business, we are unified in our beliefs, target consumer, values, and responsibility to source products in a respectable way. When it comes to reporting violations at company manufacturers, there is a confident and secure way to do so, keeping with our value of sincerity.

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-Courage: At JAKE, we strive to promote a strength and bravery through our handbags- for our customer, she can use our backpack to conquer school, sports and friends. This same heart is found in our responsible sourcing. We constantly strive for the best and for the better -Communication: Communication is a strong priority within our company. First, we will abide by the California Transparency in Supply Chain Act. This means that we will be transparent and only work with manufacturers who are also transparent in how we treat our workers and align with human rights standards. It is also extremely important for our workers (at every level) to feel comfortable and welcome to communicate anything; whether it be a rule violation or otherwise. -Consensus: Making sure we remain on the same page with all of our employees is highly important. The needs of our employees are extremely important to us. We will put forth any extra effort to ensure that we are conducting business responsibly; not only by the standards of our culture, but by those of the cultures within which we conduct business. -Appearance: We strive to give our customer the fashion forward backpack she wants to wear every day. Because we create bags that are made for the fashion forward, educated young woman, appearance is a very big factor in our product. -Creativity:It is important to stay as creative and as original while creating fast fashion products. JAKE does not believe in imitating other designers or companies products, we are a company that is proud of following the fashion trends and creating products of our own that have yet to hit the market in the style we offer or the price. -Growth and Perseverance: At JAKE we always strive to do our best and to get surpass obstacles, independent of how hard they might be. We try our best to achieve success and we like to inspire our customer to achieve their goals as well. We aspire to grow as a company and to develop into a brand that is well known for our beliefs and values. We make sure that our factories and vendors understand that we strive to grow and achieve success. We also appreciate when our suppliers envision success the same way we do, and look to grow together with JAKE.

sourcing guidelines
At JAKE Handbags we have developed sourcing guidelines which can be broken down into our code of conduct and into our external and internal monitoring. Our codes of conduct address, in great depth, the following: Harassment Abuse Forced labor Child labor No-Discrimination Environment Freedom of association and collective bargaining Health and safety Wages and benefits Hours of work Overtime compensation Monitoring: In order to ensure that the manufacturers that we source from will abide by our guidelines, we implement external and internal monitoring. For internal monitoring we include the following: Establish acceptable standards Relationships with local health and right enforcement agencies Confidential misuse or mistreatment reporting Audit schedule Database of workplace standards Employee knowledge testing Reforming plans We also will be implementing FLA (Fair Labor Association) audits, which include: Review of our code of conduct Access to employee records Review of employee work ethic Review of past audits Establishing an audit timetable Maintaining a communication channel Actions on noncompliant sectors Publishing of compliance and standards evaluation report

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OUR PRODUCTS

TOTAL annual VOLUME: 650,000 UNITS METALLIC FAUX LEATHER TREND for back to school
Style #1: Foldover Bag Colorway: Black with Gold Hardware Volume: 195,000 units per year Season: Fall/Winter 2014
As our most popular bag, the Foldover Bag is a classic backpack fit for our high-school student customers. This bag is classic, yet updated with trendy fabrics and metallic components. Pockets are accessible for storage and adjustable straps allow for complete comfort. The Foldover Bag is our essential bag for back-to-school and incorporating recent trends, this bag will be a confidence boost for the first day of school!

Style #2: Tablet Bag Colorway: Gold with Gold Hardware Volume: 97,500 units per year Season: Fall/Winter 2014
As one of our more specific designs, the Tablet Bag is catered towards our customer that is on the go. From a high school freshman to a graduate student, this bag spruces up the average tablet case and helps her carry all her technology essentials in one. Catered towards a more specific innovative customer and for those with iPads and tablets, it is a lesser selling bag in comparison to others.

Style #3: Laptop Bag Colorway: Bronze with Bronze Hardware Volume: 97,500 units per year Season: Fall/Winter 2014
Similar in style to the Tablet bag, the Laptop Bag is a style that spruces up common laptop cases and provides more storage and ability for on the go elements. With more fashion forward elements, this bag is for a creative and innovative girl who needs her technology wherever she goes. Just like the Tablet bag, fashion meets function.

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Style #4: Bucket Bag Colorway: Silver with Silver Hardware Volume: 130,000 units per year Season: Fall/Winter 2014
The Bucket bag is our signature bag in a sense that it is our most fashion forward and is produced in limited quantities throughout the year. This bag would be considered a signature item because it also caters towards a specific customer. This customer is older, fashionable, creative and uses her bags from day to night. This customer could throw her school books in her Bucket bag during the day and use it going out to dinner with friends after class. This bag is innovative, fun and a testament to the JAKE mission.

Style #5: Drawstring Bag Colorway: Rose Gold with Rose Gold Hardware Volume: 130,000 units per year Season: Fall/Winter 2014
The Drawstring Bag is catered towards a younger, sportier customer that desires a bag that is simple and not so fashionable or flashy. This customer could use this bag to spruce up her wardrobe and can be functional as well. Without pockets, organization is not apparent, but the Drawstring Bag is able to hold many of the items this younger customer needs from day to night.

For the Fall/Winter 2014 season, our total product volume is 650,000 units throughout the year. This is based on the fact that JAKE is a fashion company, not a basics company, so we need to provide product throughout the year, usually in two different incriments- back to school/summer months and before holiday. The Foldover bag is the most popular bag and an essential for students, so the most units are produced of these to cater towards our customer. The Drawstring and Bucket bags are our second popular bags because of their fashionable and unique characteristics and provide function and fashion. The least amount of units produced goes to the Tablet and Laptop bags because of their specific function and cater towards a specific customer. Overall, all styles, for this season, feature a metallic faux leather exterior fabric and always have a royal blue suede interior, JAKEs signature color. Unit production is based on demand, necessity and popularity and our price points cater towards our customer, as well, keeping our retail prices cheaper, with high quality. 17

BANGLADESH

CAMBODIA

TAIWAN

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COUNTRY ANALYSIS
-COUNTRIES SELECTED -HIGHLIGHTS OF EACH COUNTRY AND TEXTILE INDUSTRIES -COUNTRY RATINGS SPREADSHEET AND EXPLANATION

THAILAND

VIETNAM

Countries were initially selected by our professor, but were selected for a reason. Bangladesh, Cambodia, Taiwan, Thailand and Vietnam were all selected for their influx in handbag manufacturing. In these Asian countries, which are close in geographic location to each other, manufacturing is prominent and costs are much cheaper. In general, however, these selected countries are around 9,000 miles from JAKE Handbags headquarters in Savannah, Georgia. When deciding our sourcing strategy, we took this distance into account, but also the low costs and widespread manufacturing. Following are highlights of all of our 5 selected countries and their textile industries, as well as our country ranking explanations and why we narrowed our production to Vietnam, Taiwan and Bangladesh.

JAKE HEADQUARTERS

bangladesh cambodia TAIWAN thailand VIETNAM

ROUGHLY 9,000 MILES FROM JAKE HEADQUARTER IN SAVANNAH, GA TO OUR SOURCING COUNTRIES!

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HIGHLIGHTS
Very competitive in marketplace Abundant and low cost labor (4 million workers in apparel, 77 million in total work force) Good quality domestic supply of raw materials Long established tanning industry which produces around 2-3% of the worlds leather from a ready supply of raw materials. Apparel is the dominant industry with $20 billion in annual exports (leather is 4th) Leather sector grew by 17.5 percent and earned $765 million in revenue in 2012. Much room for potential growth. The leather goods sub-sector earned export revenues of USD 99.39 million during 2012 TICFA- Between U.S. and Bangladesh: Allows them to more regularly work together to

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address issues of concern in our trade and investment relationship.

Bangladesh makes perfect sense for JAKE for these reasons. Though we are just starting out, our volumes will continue to grow as our business expands into new stores so Bangladeshs growing leather goods industry is a great place for us to start. With such a large population the workforce in Bangladesh is huge and growing everyday which means there will never be a shortage of manufacturers willing to make our bags. We can mutually benefit from producing goods in the country. Our bags are fast fashion, so being able to produce them cheaply is one of our top priorities. Bangladesh has some of the most competitive prices in the industry. Furthermore, they are well established and can help us along the way with their knowledge and expertise of the industry. From the contact we have had with manufacturers already, it is quite easy to do business with Bangladesh in terms of communication and culture. They are friendly and strive to establish a strong business relationship with American companies. Bangladesh is not extremely stable yet the textile industry is such a driving force in the country that its usually spared from economic or political issues that arise. However, there are two big risks when entering Bangladesh: 1- The sourcing guidelines are satisfactory for JAKE, but they are rarely enforced. We will have to keep a more careful watch on manufacturers here than in some other countries. 2- The geography of the country lends itself to large natural disasters such as cyclones; much of the country routinely inundated during the summer monsoon season.

Apparel is Bangladeshs dominant industry, with $20 billion in annual exports, making it the worlds second-largest garment exporter after China. Bangladeshs garment industry accounts for 80% of the countrys exports and is so important to the economy that it is generally spared from the political unrest that periodically plagues the South Asian nation, even though many textile tycoons are politically active.

As mentioned under Labor Laws, the industry has been in the spotlight due to its unethical business practices. Thousands of citizens have died in fires and other tragic events, but it has not affected the industry enough to spur too much of a change. There are still increasing profits year to year, and the US is still the second largest importer of Bangladeshs garments (2nd to the European Union.) In 2010 the garment exports in Bangladesh accounted for almost 12% of total country GDP, coming in at around $11 billion. Woven Apparel is the largest import category with $3.3 billion, Knit apparel is next with $1 billion, and so on. Fortunately for Bangladesh, many new jobs (1.8 million), mostly for women, have been created by the countrys dynamic private ready-made garment industry. It has grown at double-digit rates through most of the 1990s. Now there are 4 million workers, 80% being women. Though the ethical state of the industry is very poor, the economic status continues to grow year to year. In Bangladesh the leather industry is well established and ranked fourth in terms of earning foreign exchange. In consideration of being a value added sector the (Government of Bangladesh (GoB), Ministry of Industry (MoI) has declared it as a priority sector. The leather products sector have huge opportunities in generating employment , entrepreneurship and investment by increasing export of higher value added products rather than finished leather and by utilizing locally made raw material (finished leather) to convert into more value added leather products (including footwear and other leather goods). Statistics prepared by Export Promotion Bureau of Bangladesh for the Financial Year 2011-12, the leather sector grew by 17.5 percent and earned $765 million in revenue. Of this $434.8 million was attributed from leather products, accounting for approximately 57 percent of the total revenue. The leather sector includes 220 tanneries, 3,500 MSMEs and 110 large firms2 of leather products controlling more than 90% of the export market. Most of the enterprises are Lin Dhaka, followed by two big clusters at Bhairab and Chittagong. The sector generates direct and indirect employment for about 850,000 people, including a significant number of women, particularly in the leather products industries. Export of leather products jumped from $ 50 million to $ 435 million which is only 0.5% of the global market share so there is a huge room to explore the opportunity for the leather products sector of Bangladesh to increase the world market share.

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SOCIAL

HIGHLIGHTS

The Khmer culture is very hierarchical. The greater a persons age, the greater will be the level of respect that must be granted to them. For Cambodians, seniority comes before the name, and they are addressed to with this hierarchical title corresponding to such. When a married couple becomes too old to support themselves, they may invite the youngest childs family to move in and to take taking care of their domestic life, allowing them to enjoy a position of high status at this stage of their lives.

ECONOMIC
On August of 2004, Cambodias parliament ratified the countrys entry into the World Trade Organization. Since then, garments, construction, agriculture, and tourism have been what pushed Cambodias development. The garment industry currently employs about 400,000 people, accounting for about 70% of Cambodias total exports, and GDP has escalated more than 6% each year between 2010 and 2012.

POLITICAL
Cambodias government is a Multiparty Democracy Under a Constitutional Monarchy. The Kingdoms general election on July 28th, 2013 took place in a mostly peaceful environment. In midSeptember 2013 a mass opposition protest took place in Phnom Penh and there were some clashes between police and protestors resulting in numerous injuries and one recorded death. A further mass protest took place in Phnom Penh from October 23rd to the 25th during which the opposition marched to various embassies around the city.

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On January 3rd 2014, disorder broke out during labor protests in Phnom Penhs Pur Senchey District, resulting in the death of several protestors. On January 4th, the government issued a statement banning any additional protests, and activists were effectively cleared from Freedom Park in central Phnom Penh. When marches are announced, the Cambodian security forces may decide to disrupt the march.

LABOR LAWS
In Cambodia, the Labor Code controls the labor relationship between employees and employers and the socio-legal rights and obligations resulting from a labor relationship. Every Cambodian citizen and foreign national working in Cambodia is subject to the regulations of the Labor Code. The Labor Law specifically provides regulations on enterprise establishment, apprenticeships, labor contracts, collective labor agreements, general working conditions, placement and recruitment of workers, trade union freedom and worker representation in the enterprise, specific working conditions for agricultural work, health and safety of workers, work related accidents, settlement of labor disputes, strikes and lockouts, labor administration, and the labor advisory committee. The Law on Social Security provides a system of protection regarding work related accidents for workers under the scope of the labor law. Incorporation of Terms in a Collective Agreement: Terms and conditions between individual employment contracts and collective labor agreements may be at contradiction with one Presumption of Term: There are three basic term lengths for labor contracts The Labor Law: indefinite term UDC, definite-term of 1 to 24 months FDC, and probationary term or probationary contract of 1 to 3 months Dismissal for Cause: The only situation in which an employer is legally allowed to unilaterally terminate an employees contract without giving notice or being liable for any type of severance or compensation pay is for any serious misconduct mentioned in the Labor Law. Notice Period: The notice period for unilateral contract termination depends on the duration of the contract and reason for termination: Minimum Wage: There is no minimum wage law in Cambodia yet, except a Notice No. 04/1/11 dated March 2011 providing a minimum wage for workers who work in a garment industry is 61 USD per month.

another.

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Working at night and public holiday: 200 percent of the current wage rate for overtime hours Health Insurance: Health insurance is not compulsory for employee under the labor law. However, the employer is responsible for a workers work related accidents.

TRADE AGREEMENTS
TRADE SUMMARY The U.S. goods trade deficit with Cambodia was $1.7 billion in 2005, an increase of $259 million from $1.4 billion in 2004. U.S. goods exports in 2005 were $69 million, up 17.9 percent from the previous year. Corresponding U.S. imports from Cambodia were $1.8 billion, up 18.0 percent. Cambodia is currently the 141st largest export market for U.S. Goods.U.S. foreign direct investment (FDI) in Cambodia (stock) was $10 million in 2011, up 150% from 2010. World Trade Organization (WTO) ASEAN Association of the Southeast Asian Nations ASEAN) Trade and Investment Framework Agreement (TIFA) EU-ASEAN - Free Trade Agreement Bilateral Investment Treaty (BIT) Asia Free Trade Area (AFTA) International Organization for Standardization (ISO) Cambodia Bilateral Textile Agreement

TEXTILE INDUSTRY
Garments and textiles are the essence of Cambodian economy, amounting to 85% of the nations total exports, and if you if you include footwear, that amount rises to 95%. Garment manufacturing represents 16% of the countrys gross domestic product and services 45% of its manufacturing workers. Garments make up the largest part of the industry, since the country has two small textile mills. Representing the largest portion of Cambodias manufacturing sector, the garment industry exports grew to $4.61 billion n 2012, up 8% over 2011, and reported exports worth $1.56 billion in the first half of 2013. This industry segment employs 335,400 workers, of which 91% are female.

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As a country with a low GDP of about $13 billion, Cambodia lacks a strong textile-manufacturing base; therefore, the sector operates mainly on the finishing stage of garment production, which consists of turning fabrics and yarns into garments. Cambodia pays the highest tariff rate of any other US partner, ranging between 15-25%, depending on the category of product. Cambodia is currently aiming to get US to lower its tariff rates so it can compete with China. STATE AND CHALLENGES OF THE TEXTILE INDUSTRY There are several threats or challenges that make Cambodias garment industry vulnerable. The country is especially cautious of the increasing competition, predominantly from Bangladesh and Vietnam, Bangladesh having reported 300% export growth in the garment segment over the last seven years, and became the USs second largest foreign supplier in 2008 after China. China has the same profuse cheap labor as Cambodia, along with a low inflation rate and a large spinning capacity- leading to 90% vertical combination of knit products. Cambodias reliance on imports makes it subject to increasing material prices, while its dependence on both export markets and foreign investment makes it exposed to a financial crises. Cambodias high dependence on the US market, its position of being the lowest value-added segment in the global garment value chain, and transcontinental investment firms lack efficient management and technology to make transfers to the local economy. Although labor norms in Cambodia are generally considered to be an encouraging competitive factor in the Cambodian garment industry, numerous illegal strikes indicate that the improvement of the attentiveness towards workers rights does not always improve the industrys global competitiveness. The national capacity of the Cambodian government is weak and seems to limit growth opportunities for the industry, and the quality of basic education, and specifically the quality of labor force, is a critical element that needs to be addressed.

BENEFITS OF DOING BUSINESS IN CAMBODIA

One of the many benefits of sourcing in Cambodia would be to be able to generate stable jobs for the people who live there. At JAKE we follow our guidelines to the core, and we intend to make sure that every worker is compensated and treated ethically. Sourcing from Cambodia could end up being a good situation for both our company and the country, as we would be bringing in more opportunities to the textile and garment industry of Cambodia.

In Cambodia we will be able to source good quality product, at a very good cost, remaining faithful to our sourcing guidelines. With a growing economic market with the average GDP growth of 7% last year, and a developing market economy that grew at an average rate of over 10 percent from 2004 to 2007, JAKE has the opportunity to grow as a company together with the country, largely driven by an expansion in the garment sector, construction, agriculture, and tourism.

REASONS WHY CAMBODIA WAS NOT CHOSEN FOR SOURCING AT JAKE

It was difficult to find suppliers and manufacturers of PU leather bags in Cambodia with respectable clients. Many manufacturers that I did find had little or no client base, which isnt the best thing because you, as a buyer, dont know if the supplier is trustworthy. And suppliers that had clients such as h&m, Levis, Nike, Puma, Wal-mart, etc, were strictly garment producers. Cambodia is undergoing social and economical reforms and hopefully will keep growing as a nation, but for now theyre still having many problems regarding laws, education, health, government, and so on. Because we have such high standards in what we create, it has been a challenge to find companies in Cambodia that will best fit JAKE, not only our company, but also our values, and demands concerning our sourcing guidelines.

CHALLENGES OF DOING BUSINESS IN CAMBODIA

Some significant challenges in doing business in Cambodia include their weak rule of law, poor infrastructure, high-energy costs, corruption, and under-developed human resources. Lack of respect for basic human rights, including media freedoms, freedom of expression, and freedom of assembly, also remain a key concern that ends up factoring prominently in disputes over land rights, affecting our future employees and our company as well. Limited enforcement of intellectual property rights, including the sale of imitation and pirated products, also remains a major concern for American companies. Though the political climate has gotten a bit better, and there seems to be less violence and protests than before, these are also some concerns we have when it come to decide whether it is safe to source from Cambodia or not, not only because we worry about personal safety, but we want to ensure that our employees are safe and comfortable when working with us.

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Ta

n a iw

SOCIO-ECONOMIC-POLITICAL CLIMATE

HIGHLIGHTS

Social: With free national health care and a fairly democratic country overall, Taiwan is extremely stable. The fast aging population, with a decreasing birth rate has lent itself to a decreasing work force at the appropriate age. Close to 40% of the population is 65 and over. Womens issues are also an issue in Taiwan in reference to equal pay, working conditions and cultural aspects. Women often work in the textile and electronic industries and often get paid two thirds of what men receive. Economic: Taiwan is a leading force in exports and imports, specifically technology and textile production. Because of this, they are a highly developed economy, but extremely dependent on mainland China, economically and through investments. Exports brought in close to $300 billion in 2012 alone. Because they are so focused on exporting, their dependence lies on the success of other countries, like China, the United States and Japan. Also, there is a massive lack in domestic affairs, such as updating infrastructure and the education system. Taiwans economy is extremely focused on external, international affairs, which is not stable or predictable. The low birth rate and rapidly aging population are long-term economic challenges that could affect education, the work force and unemployment. Overall, Taiwans economy is dependent on external factors through exporting and importing and severely dependent on Chinese investment, which is problematic and shows a sign of weakening.

Political: Taiwan is fairly stable politically, but like other Asian bordering countries, there are distinct parties separated over the issue of Taiwans independence. China still claims Taiwan as a dependent, but Taiwan wants to completely become independent, with these issues causing political turmoil. The President is Ma Ying-jeou and has showed promise to create stronger ties with China. The KMT party and the Democratic Progressive Party are the two strongest and largest political parties separated by this independence issue. Despite these issues, however, the political aspects are extremely stable and riots and coups are not evident in the future. Today, the KMT or the Kuomintang party rules in Taiwan and supports unification with mainland China.

LABOR
Taiwan has a very low unemployment rate at 4.2%, with over 11,000,000 citizens employed at a participation rate of close to 59%. Minimum wage was just increased in September of 2012 to $3.71 per hour, but has caused some issues socially because citizens believe the cost of living requires a much higher minimum wage. The service industry has the highest worker involvement, with the industry market being the second highest. Business tends to be done between families, with small and medium sized businesses ruling. With such direct competition with China, Japan and surrounding Asian countries, Taiwan is losing workers and employers because of their booming economies and massive manufacturing facilities. Job shortages are at a all time high, with over 230,000 job openings. The Labor Standards Act is the most significant law regarding employment conditions and terms for the Taiwanese.

TRADE AGREEMENTS
As of now, there are no specific trade agreements with the United States, but Taiwan has Free Trade Agreements with Singapore, Guatemala, El Salvador, Honduras, Nicaragua, Panama and New Zealand. Another agreement put into place is the Economic Cooperation Framework Agreement (ECFA) between China and Taiwan to increase trade and keep peace between the two countries. Taiwan has also been thought to join the TPPA in the near future, if that agreement ever passes.

RISKS AND BENEFITS

Benefits of Taiwan are the exporting, textile and apparel and labor industries that generally fluctuate with their economic standing. Manufacturers and production are widely available in Taiwan, which is a benefit as well.

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Taiwan is also extremely stable politically and socially, focusing on cheaper labor and production as well. Risks, however, include Taiwans weakening and dependent economy. Without a strong independence, the security of manufacturers and production could be unstable. Also, domestic affairs are not the first priority and relations between the United States and Taiwan are seemingly non-existent. Annual monsoons and typhoons are also natural risks and hazards.

TEXTILE AND APPAREL INDUSTRY

The textile industry in Taiwan is one that has grown tremendously after being liberalized in 2005. With increased technology and vertical integration, many of the textile manufacturers manufacture yarns, spin and weave, dye and sew to create full-fledged fabrics to export. Taiwan is also a heavy exporter of textiles. In the past 12 years, 77% of textile production was specific towards exports. As a result, the industrys production value, manufacturers, and employees all reduced 14.4% within those 12 years. Monthly wages, though, in the textile and apparel industries grew within the past six years, indicating a necessity for these industries. Taiwan is the 6th largest textile and 30th largest apparel exporter in the world. As far as imports, the textile industry generated $3.3 billion in 2012, second to apparel and accessories, fibers, and fabrics. Once again, with close proximity, China is Taiwans major source of imports, specifically gearing towards apparel; Vietnam, United States for cotton, Japan, and Indonesia were ranked next. In todays textile market, the thousands of manufacturers in Taiwan have moved to lower costing countries, such as China and Japan due to a struggling economy and lack of workforce. Many apparel and textile manufacturers will have offices in Taiwan, but factories in nearby China. The benefit of being geographically close to these emerging markets is beneficial to Taiwan. In order to keep Taiwan competitive and segmented from other large powerhouses like China, Vietnam, and Japan, they need to have a solid product. Research and development staff is needed to differentiate Taiwans fabrics from others and keep them fresh, new, and incorporating leading edge technology. Taiwans apparel industry was affected by the weakened economy and also consumer spending decreased because of the economy as well. Fast fashion is on the rise, especially in Asian markets, with retailers like Uniqlo and Zara becoming increasingly popular in Taiwan. Overall, the textile industry is evident, strong and growing, but directly affected by the weakening economy. For these reasons, Taiwan would be an ideal country to source our JAKE handbags.

Despite a weakening economy dependent on Chinese investments and exports and imports, Taiwan

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is stable in almost every other aspect of their country.

As a business, JAKE requires fast fashion bags, but with high quality fabrications and components, like faux leather and metallic hardware. Also, we require manufacturers that can handle these fast fashion production units and volume. Manufacturing in Taiwan makes sense for JAKE Handbags because of their strong textile industry, stability in many aspects and the cost of production. The textile and apparel industries in Taiwan have steadily grown after being liberalized in 2005 and today, technology and vertical integration are popular in most manufacturing facilities. Over 75% of textile production was specific towards exports, which would be geared towards JAKE handbags. Taiwan is the 6th largest textile exporter in the world, with close to $12 billion made from imports. Production values, manufacturers and employees have increased as a result. Because of this strong sign of growth and strength in exporting, especially in the textile and apparel industries, production of JAKE Handbags would be high quality with a quick lead-time. Quality is another factor that JAKE Handbags require and that is found in many of Taiwans handbag manufacturers. With a strong base in technology, innovation, research, development and full services, Taiwan stays competitive in the production market with these high quality services. Many manufacturers now focus on what new fabric they have produced or what innovative customers they manufacturer for or how to utilize the most efficient production processes. These technology advancements should lead to a $550 billion increase in production by 2015 and $700 billion by 2020. Creating a strict, sophisticated, and innovative textile industry will set Taiwan apart from other industry leaders and create a ground point for future fashion industries to manufacture, like JAKE Handbags. Despite a weakening economy, JAKE Handbags could have a stronghold in the handbag manufacturing business in Taiwan. Production of fast-fashion items requiring high quality components is popular in Taiwan and JAKE requires just that. Also, despite comparatively high production costs, Taiwans quality makes up for the slightly higher costs, which would be attractive for JAKE. Strong corporate values and sourcing guidelines are widely found in Taiwan, as well as a strict minimum wage and minimum age requirements, which is also a benefit for production for JAKE. Taiwan shows immense growth for faux leather handbag production, keeping in mind fair business practices and minimum wages, as well as lower costs and quick lead-time, which is extremely beneficial for our business.

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il a Th

d n a

SOCIO-ECONOMIC-POLITICAL

HIGHLIGHTS

Free-market policies created an economic boom in 1997, opening the eyes of the public to new economic ideas. Thus began the rise of Prime Minister Thaksin Shinawatra, a populist governmental official. He was criticized highly among the city elite, but was extremely popular among the poor in more rural areas.

BACKGROUND
Thaksin Shinawatra was born in 1949. In 1973, he studied criminal justice for his masters in the United States on a goverment scholarship grant. Thaksin became a businessman in Thailand after finishing his masters in the United States. He became a self-made billionaire through the field of telecommunications. Thaksin founded a political party entitled Thai Rak Thai (Thais Love Thais) in 1998, transforming the politics of the country. In 2001, he won the office of Prime Minister in a landslide election against the Democrat Party. He was greatly popular because of his outreach to poorer voters. Thaksin was extremely popular at the start. However, there were some controversial bumps along the way. While in power, a governmental crackdown on drugs in 2003 caused the deaths of more than 2,500 people; causing additional outrage and blurring the governmental reputation. Also, it was discovered that Thaksin did not declare all of his monetary wealth legally. In 2006, his family sold Shin Corp (telecommunication business) shares, gaining $1.9 billion in money that many Thais voiced was avoided of taxation.

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Massive demonstrations followed this controversy, causing Thaksin to call a snap election. All of the other parties boycotted the election, causing many no votes for the election. Finally, Thaksin stepped down... but only for a few months. His return to office was unwelcomed by most. After more than five years in power, he was exiled in a military coup dtat in 2006. This coup was ignited by the governmental accusation of corruption and abuse of power. Since, the Supreme Court has taken an estimated $1.4 billion for these allegations. Since, he has chosen to stay exiled, remaining mostly in London or Dubai. If he returns to Thailand, Thaksin will face two years in jail; now having been convicted of absentia. This additional charge was added during 2008 when he missed a court appearance because of his presence at the Beijing Olympics. Thaksins assets were frozen, forcing him to sell stocks; including his controlling stake in Manchester City football club in the English Premier League. Today, red shirts are the name of protesters who still remain allegiant to Thaksin. They often request the lifting of Thaksins ban and he will often make appearances on large screens to give them pep talks or other visual/audible support. Although exiled, Thaksin is still believed to have a hand in leadership within Thailand. Still, he is believed to control the Pheu Thai party, which is in control of Thailand today. His sister, Yingluck (below), was elected as Prime Minister in 2011 and is undoubtedly very influenced by Thaksin. Yingluck, however has showed a turning point in the eyes of most Thais, politicians, and voters. In reaction to a pending massive demonstration, Yingluck announced her dissolution of parliament in favor of a partially new government. Her party-run government will still have the high power, however this dissolution is looked at as a sort of compromise. The anti-party citizens treat this as a great victory, as Thailand will soon re-select the decision-making parliament. This move is seen as an effective negotiation or compromise by many, however there is still one problem in the back of everyones minds: Thaksin.Suthep Thaugsuban is head of Peoples Democratic Reform Council, and leader of the protests against the Thaksin way and Thaksinomics. Suthep doesnt see Yinglucks dissolution of the parliament as such a brave compromise on her part. In fact, he believes that this election will result in another win by for Thaksins Pheu Thai party. In fact, it is commonly thought that the Democratic party may not even run during the election, similar to the reaction during Thaksins snap election in 2006. In 2012, the Pheu Thais started a deal with rice farmers which is now referred to as the rice scheme by some Thais. This entailed the purchasing of rice from certain farmers with a promise for a pay raise for paddy workers.

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The promise said that once the world market price started to rise, Thailand rice farmers pay would rise, as well. Two years later, their pay has not risen. The farmers have yet to see the money from the government. In fact, the price of rice was cut by 3,000 baht. This action was followed with many rallys and protests. It will surely be interesting to see how Thailand schedules the upcoming election and, of course, how they will elect the new parliament.

LABOR LAWS
Employee and Employer Agreement: A written or verbal agreement that is dually understood for employment. Minimum Wage: The minimum wage requirement depends based upon location. The range is within 148 baht-203 baht. Obviously, the highest minimum wage is present in Bangkok. In 2008, a new daily minimum wage rate was established. Salaries for Full Time: The range for these positions is 7,000 baht-150,000 baht per month. Overtime Compensation: Compensation for overtime must be paid at a rate of 1.5 times on a regular day and 3 times on holidays. Deductions from Wages: Income tax deductions, trade union dues, payments of savings cooperate debts, payments of debts in welfare benefits, security for work, or agreed pension funds act as acceptable deductions from wages.

TEXTILE INDUSTRY
In 2009, the global crisis affected the textile and apparel exports in Thailand greatly. The exports decreased by 11.7%. Thailand recorded a positive increase in retail calue and export growth in 2012. Demand peaked particularly in the second quarter of 2012. This creates more Wage rates in Thailand are increasing as is their minimum wage in most regions. This makes their textile and apparel industry more expensive for manufacturing.

BUSINESS CULTURE
Thailand has a polychronic business culture. This describes a culture in which business people do many things at once. They manage interruptions well. They are committed to people and human relationships. However, they will change plans often and rather easily; rescheduling has no hard feelings in this culture.

They look for people who are closely related to conduct business. This culture places importance on status. Lifetime relationships are commonly built with businesspeople of this culture. While women are starting to hold higher executive positions in Thai culture, the business environment is still very patriarchal.

WHY JAKE ELIMINATED THAILAND

Thailand was eliminated for many reasons. First, the political unrest is not very assuring. More specifically, the rice scheme creates a downright scary business climate. If the Thai government is unreliable to their own business climate, they surely will not be supportive to foreign business. In addition, the costs of producing in Thailand are currently rising as a response to the labor wages increasing yearly among most Thai regions. There is not only political unrest, but a complete political divide. Also, the country is completely unsupported politically, as Yingluck Shinawatra completely dissolved any sort of Parliament within the nation. Finally, of the five countries researched, Thailand had one of the smallest manufacturing markets from which to choose. The selection highlighted more disposable bag manufacturers, weavers, and sports bag manufacturers. Of the seemingly suitable manufacturers, none replied to JAKEs emails. When phoned, the manufacturers did not pick up. Of those who had voicemails, none of the calls were returned. This presented us with a situation where we saw it best to move on without Thailand; they certainly were not appreciative of our potential business.

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t e i v

m a n

SOCIAL

With the unification of Vietnam in 1986, they have since adopted a number of legal documents on the Law on Marriage and Family with hopes of making family relationships more equal. There have been a number of different measures that have also been taken to raise awareness of the public to change their attitude, promise gender equality and fight for the rights of women. Along with this there has been an increase with the protection and rights of children, emphasizing the fight against child labor and of course promoting education.

HIGHLIGHTS

ECONOMIC
Vietnam has been a quickly developing country since 1986, making a huge transition from the structure they once knew many years ago. The government has reaffirmed their commitment to economic modernization in recent years. Vietnam joined the World Trade Organization in January 2007, which has promoted more competitive, export-driven industries. Vietnam became an official negotiating partner in the Trans-Pacific Partnership trade agreement in 2010. Agricultures share of economic output has continued to shrink from about 25% in 2000 to less than 22% in 2012, while industrys share increased from 36% to nearly 41% in the same period. State- owned enterprises account for roughly 40% of GDP. Poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. Vietnam became an official negotiating partner in the Trans-Pacific Partnership trade agreement in 2010. Agricultures share of economic output has continued to shrink from about 25% in 2000 to less than 22% in 2012, while industrys share increased from 36% to nearly 41% in the same period. State- owned enterprises account for roughly 40% of GDP. Poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year.

LABOR & LABOR LAWS

Vietnam became an official negotiating partner in the Trans-Pacific Partnership trade agreement in 2010. Agricultures share of economic output has continued to shrink from about 25% in 2000 to less than 22% in 2012, while industrys share increased from 36% to nearly 41% in the same period. State- owned enterprises account for roughly 40% of GDP. Poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year.

TRADE AGREEMENTS
EU FREE TRADE AGREEMENT NEGOTIATION This is a huge market with 27 members and is one of the most important trade partners of Vietnam. Vietnam and EU are negotiating a Free Trade Agreement (FTA), from June 2012. With the hopes of negotiating a comprehensive agreement that includes not only market opening commitments but also other related trade ones like investment, environment, competition, sustainable development, etc., EU-Vietnam FTA, once finished, may have great impacts on each industry and the whole Vietnamese economy. ASEAN ASSOCIATION OF SOUTHEAST ASIAN NATIONS Fundamental aims and purposes of the ASEAN are to accelerate growth and social progress and cultural development within the countries; promote peaceful and stability; promote active collaboration and mutual assistance; collaborate more effectively; and to cooperate with existing international regional organizations. They also strive to have a mutual respect for independence, sovereignty, equality, territorial integrity, and national identity.
TRANS-PACIFIC PARTNERSHIP

Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. According to the Office of the United States Trade Representative, what the TPP will do, is enhance trade and investment among the TPP partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs. The goal is to later expand the partnership to other Asia Pacific countries, but there is still much to be done.Vietnam is the 46th largest goods export for the United States, with goods exports of $4.6 billion, up 7.3% from 2011.

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Vietnam also exported $20.3 billion in 2012, a 15.9% increase from 2011 making it the United States 23rd largest supplier of goods in 2012. This will open free trade between the US and Vietnam for the first time and it will help reduce tariffs and barriers caused by duties when exporting to the United States. Vietnam participates in the Trans-Pacific Partnership or the TPP. The TPP is a proposed free trade agreement between Australia, Brunei, Chile, Canada, It is known that the duties from Vietnam to the US are quite expensive, so it will greatly benefit the overall cost of the company. This trade agreement will be the most beneficial trade agreement to the United States.

NEGOTIATION STYLE & STRATEGIES

The most important quality in negotiations with Vietnamese is patience. Outward displays of anger are interpreted as a sign of personal weakness, and will invariably be met with a stony response and increased resistance in negotiations. You should focus on transaction details as well as cultural factors. More often than not, this means price, as the formative Vietnamese market is extremely price-conscious. Vietnamese buyers have a preference for stable and well-proven products, turnkey solutions, and a strong reliance and expectation on the supplier to provide after-sales service support. Do not feel compelled to fill silences that may occur during business negotiations. Being silent is particularly useful if the Vietnamese have made an unreasonable demand or proposal. The pace of negotiations may be slower than expected with informal conversation at the beginning of the meeting. As business decisions are not usually made during an initial meeting, it is often beneficial to send a written proposal well before the meeting if an immediate response is required. Negotiations will usually continue after an agreement is executed. Have your lawyer operate behind the scenes rather than taking part in the negotiations as most Vietnamese companies prefer a less legalistic approach to negotiations.

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Vietnams textile and garment industry has seen fast and sustainable growth over the past years, playing an important role in national socio-economic development. Demand for labor in the sector is huge. Every year, the sector gives employment for millions of people, generating income for the workers. Export value of textile and garment products in recent years has been ranking number two in the countrys total export revenue, earning a major source of foreign exchange and contributing significantly to Vietnams gross national product and budget. Vietnam has advantages: only small investment capital required; a quick playback period because of short capital turnover; lots of preferential policies from the State because of providing much employment; and large domestic consumption Vietnam is home to a population of almost 90 million. Related to the latter, there is a vast pool of young, skilled Vietnamese workers more than willing to work for low wages. Vietnams joining the WTO in 2007 provided it tremendous opportunity to develop. Vietnam receives equal treatment and benefits in preferential trade just like other members of WTO; further, it can access world markets conveniently. Right away, the textile and garment sector took strong and stable development steps. Vietnam is a top 10 country in textile and garment exports. Despite the recent global economic downturn, the sector is seeing impressive export performance. Export revenue exceeded US$11 billion in 2010, up 24% against 2009, US$14 billion in 2011, accounting for 16.5% of the countrys total export revenue and up 38% against 2010. Vietnam can be proud of this commendable performance. Consider that its textile industry was the only sector in the country to maintain its overall growth and export earnings compared to the previous year.

With a garment manufacturing population that employs millions of people, it is constantly growing and remains a great source for US product developers and any one else from every where else. This industrial market is growing and does not seem to be stopping. By employing manufacturers in Vietnam, JAKE will be providing jobs for the hundreds of employees who need to provide for their families. After extensive research, we know that the garment factory workers will be in stable conditions and work in an environment that is safe, clean and well deserved. Of course, we cannot ignore the differences in politics that Vietnam and our country, the United States, may have. However, politics aside, Vietnam offers a great deal of opportunity and promise for the future of JAKE backpacks. JAKE has every intention of following the sourcing guidelines outlined, keeping our word with every single bullet point mentioned. Our company values the employees that help create the brand we have dreamed of and without them JAKE would be nonexistent. By working with Vietnam, we are helping workers provide income for their families, creating a product at the best value at the highest quality and creating business relationships with a country that has so much to offer. JAKE will continue to grow with Vietnam as long as we see the guidelines are followed on a daily business and our product maintains the quality and design promised to our customers.

From our previous research and analysis, we ranked our countries based on many different factors. We collaborated and debated on many different factors in order to decide on numbers in relation to our countries. Based on our rankings and our previous research from our country reports, our top three countries, in order of highest ranking, are Vietnam, Taiwan and Bangladesh. #1: Vietnam When it came down to narrowing down our five countries, we chose to continue working with Vietnam for a variety of reasons. First off, the business climate in Vietnam is great. Not only is the country welcoming to Americans and our business, they are professional and tend to work well with us. The handbag manufacturing industry in Vietnam is huge, which means there is a lot of competition and constant need to offer our companies exactly what we want, which means the costs to do business are of a good value and there are many options to choose from. We noticed, after speaking with suppliers, there was an ongoing communication on prices, what they offered and what they wanted to do for us as a company. You can feel the strong sense of wanting to cooperate which ties into how well the business climate is and the entire textile industry. The textile industry is strong, so realistically, Vietnam is a top country to manufacture handbags, especially fast-fashion faux leather back packs. The government in Vietnam obviously is not ideal, however it is stable. Of course, it could be improved noting the fact that they are a communist party, but everything is stable enough that we found no posing issues. Vietnam is across the world from America, so the location could always be improved. The country offers many shipping ports and it is not as difficult as other countries to shop back and forth from, we just have to consider timing and costs due to the distance. When it comes to trade agreements, they are in place and pretty excellent for the United States. Labor risks are of serious importance to JAKE. Our sourcing guidelines point out how important it is to us that our factories and the manufacturers running them follow the rules we stand and believe by. We believe that the suppliers we have chosen to work with will undoubtedly follow our guidelines, however, there are always risks in labor over sees. When it comes to sourcing guidelines in Vietnam, they are in place but we need to constantly be paying attention to violations that could possibly occur. After careful evaluation and comparison, Vietnam is a great country to manufacture in and stands strong through out the important factors we went over through out the process of choosing the best possible countries for JAKE.

COUNTRY selection

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#2: Taiwan With a score of 66, Taiwan was rated as our second highest country because of their extreme stability and high quality production. For JAKE, production would be beneficial in Taiwan due to the social, political, and business stability. The business climate, in regards specifically to the textile industry, is constantly growing and showing signs of innovation and technologic advancement. Taiwan shows strong signs of growth within the textile manufacturing industry and utilizes strong business practices, such as fair minimum wage and minimum age requirements, technology and innovative design elements. Many manufacturers in Taiwan are using these innovations to their benefit, setting them apart from the fierce competition in surrounding countries, like Japan and China. Still, however, there is a boost in textile and handbag production in Taiwan, which is favorable for JAKEs production. Possibly their strongest economic aspect is exporting goods, specifically textiles, which is a benefit for JAKE. Exporting makes up a large percentage of their economic wealth, which can be a positive or negative; for JAKE, this is a positive aspect. They are extremely knowledgeable and efficient in regards to exporting and because of this, lead-times and costing can be lowered with furthered relationships with suppliers. Also, the treatment of workers and the strong use of sourcing guidelines are evident throughout Taiwan, which is also a strong point for JAKE, who strives to work with manufacturers that share our values and sourcing guidelines. Minimum wage has increased within the past two years and the government is recognizing the importance of education and training programs for workers. Despite a decreasing birth rate resulting in a lower than normal work force participation, the unemployment rate is extremely low, around 4%, which shows a passion and drive for the Taiwanese to work. In Taiwan, the manufacturing and service industries are those with the highest work force numbers, once again highlighting the prevalence of production in Taiwan. With a declining economy, lack of trade agreements with the United States and comparatively higher production costs, Taiwan makes up for these negatives in the strength, growth and stability in other aspects of their country. Striving for quick turn-around with high quality elements at a low cost, JAKE would maximize their opportunities and minimize their risk in manufacturing in Taiwan.

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#3: Bangladesh In our country rankings, Bangladesh was tied with Thailand. Their positives are similar in that they both have booming textile/apparel industries and very low manufacturing costs. However their cons are equal as well- they both have economies that are not stable and they both have poor labor laws and enforcement. The determining factor was the political unrest that is happening in Thailand right now. It is having an effect on the entire country and the economy. In Bangladesh there is some political divide but it has subsided in more recent years. There are you occasional riots and protests but not to the same caliber as is Thailand. Bangladeshs economy, especially the textile industry, has proven to be extremely resilient through any strife they have faced politically. Even in the global recession they reported steady gains each year. Bangladesh may look like a negative place to do business with the recent factory tragedies, however, they have highlighted what needs to be done to make it a more successful business environment and many US retailers are beginning to combat these labor issues. The costs in Bangladesh are very low which is one of the biggest determining factors for JAKE. We see Bangladesh as being a country that we can grow with.

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COUNTRY RANKINGS
Scale of 1 to 10 with 1 being the worst and 10 the best
Vietnam Business Climate Costs Government Location Risks Social Stability Sourcing Guidelines Textile Industry Trade Agreements Trained Work-force Socio-eco-political Total AVERAGE 9 8 6 4 5 6 7 9 4 8 8 74 6.7 Taiwan 7 5 9 5 4 9 7 7 2 6 5 66 6.0 Thailand 8 5 7 5 5 6 8 6 2 7 3 62 5.6 Bangladesh 6 9 6 4 3 6 4 8 2 6 5 59 5.4 Cambodia 7 9 5 3 3 5 6 7 2 6 6 59 5.4

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After deliberation and negotiation, we decided to rank and place our products in specific countries based on many factors seen above. Specifically, the socio-eco-political climate, business climate, textile industry, trade agreements and costs were strong factors for deliberation. Overall, we decided on Vietnam, Taiwan and Bangladesh for our top countries to source our handbags. For our faux leather handbags, Vietnam is our strongest country as far as country stability, Taiwan is the best for its high quality and Bangladesh is overall the best for its low costs and manufacturers.

COUNTRY RANKING EXPLANATIONS

Scale of 1 to 10 with 1 being the worst and 10 the best Vietnam Taiwan Thailand Bangladesh Bangladesh is a high risk place to steady business do businessclimate focused Inadequate very good, There is a healthy on exports and infrastructure, professional and business climate manufacturing, corruption, poor welcoming to that is inexpensive but dependent contract Americans for the US on investments enforceability, from China etc. However much US product is produced here. With costs low in Currency One of the relation to a conversion is cheapest places global scale, they inexpensive; good value, rising to do business are not as however min. (not without competitive as wage= $10 a day consequences) China or India at (USD) $.057/hour Strong, stable government with no risk of revolt or issues, but is an unstable relationship with China Very far from US and too close to China to be competitive enough to pickeasy access to Pacific Ocean Cambodia

Business Climate

good for garment and textile industry, growing tourism and textile industries

Costs

good, higher than China's and Vietnam's

Government

Communist. Stable, could be improved

Two parties have The laws would been at odds with relatively new, still not be inhibiting, eachother for some corruption, and Thailand is years. Boycotts, less protest, but welcoming to riots, and deadly still a bit messy, foreigners in violence is working on it matters of common relating business. to politics. The port of Laem Chabang to the port of LA is Far away but has from LA to Phnom extremely two fairly large Pehn, 16 hours, 55 common and ports minutes doable for international manufacturing

Location

Many ports, approximately 30 hours from Savannah to Vietnam

Risks

Labor Risks

Massive floods one of the Typhoons and Thailand is occur every few poorest countries monsoons, cracking down on years with in Asia, increasing economy based violence and devastating competition, on China, lack of theft in ports. Riots effects. Poor predominantly domestic growth are lessening working from Bangladesh conditions. and Vietnam Very strong citizens, no revolting or uprising- very peaceful and respectful people No wars. Much stable, but political strife. Still country is one of the undergoing social poorest countries and economic in Asia. reform Most of the manufacturers found have very little credibilitysome leading us to environmental believe the regulations and sourcing child labor issues, guidelines are should be very flexible. watched Bangladesh has several laws in place but are not enforced.

Social Stability

Stable

Society has a huge political divide

Sourcing Guidelines

In place, but need to pay attention for violations

Dedication towards positive actions, but still Our sourcing needs growth and guidelines are watch in these very similar to the area- strong and laws of Thailand wide variety of trusted manufacturers

Textile Industry

Strong, a huge part of the country

The textile industry Strong and stable, well developed, 2nd largest in Thailand has with potential to expnding and been growing exporter of textiles grow, but not growing. One of in the world. rapidly since 2010, currently a the biggest but slim choice of (Handbags are stronghold in industries in the not as high) handbag economy country manufacturers TICFA- Between U.S. and Bangladesh. Allow them to more several trade regularly work agreements, together to address issues of none which are free trade, but concern in our they're working on trade and it investment relationship. Several agreements with other countries

Trade Agreements

Though our trade agreement with Thailand was Somewhat No trade dissolved in 2006, complicated, but agreements with Thailand is eager pretty excellent US to re-establish this for USA realtionship with the United States through the TPPA

Trained Work-force

Plenty

11.34 million are employed, but A huge there is a future There is a large population decrease in amount of trained looking for workworking force age workers in Big opportunity. group because of Thailand Not extremely the declining work trained. force- strong workers

some

Strong social and political status, The laws aren't but the economy inhibiting, is mediocrehowever there is a Stable, could be declining and Socio-eco-political lot of political better unstabledivide and dedicated to instability in Chinese Thailand investment and exports AVERAGE 6.7 6.0 5.6

Considered a least developed country (LDC). good, getting Relatively stable. better, have had Still very poor, a few setbacks rocky politics, low but working on education, reformation overpopulation. Textile industry offers hope. 5.4 5.4

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FROM OUR INITIAL COUNTRY REPORT RESEARCH, ALL FIVE COUNTRIES HAVE SELECTED THEIR TOP THREE MANUFACTURERS FIT TO PRODUCE JAKE HANDBAGS. FROM THESE SELECTIONS AND RANKINGS, JAKE THEN CHOSE THE TOP MANUFACTURER FROM each of OUR TOP THREE COUNTRIES- VIETNAM, TAIWAN AND BANGLADESH.
Countries Selected with Supplier Selected
1. Vietnam: Jinjiang Jiaxing Shoes & Garments Co. Ltd. 2. Taiwan: Taiwan Yamani Inc. 3. Bangladesh: US Bangla Leather Products Ltd.

All Five Countries with Top 3 Suppliers Bangladesh

1. US Bangla Leather Products Ltd. 2. Picard Bangladesh 3. Fortuna Shoes & Bags Ltd.

Cambodia 1. KAP Cambodia

2. WAH SUN Factory 3. Zhongzheng

04
SUPPLIER ANALYSIS
-SUPPLIER SELECTION -HIGHLIGHTS OF EACH SELECTED SUPPLIER -SUPPLIER RATING SPREADSHEET AND EXPLANATION

Taiwan 1. Taiwan Yamani Inc.

2. Starite International Ltd. 3. Heilian Inc.

Thailand 1. Boss Leather Goods

2. Royal Handbag 3. Dragon Handbag

Vietnam 1. Jinjiang Jiaxing Shoes & Garments Co. Ltd.

2. Thai Duong Co. Ltd. 3. TMH Vietnam Co. Ltd.

BA

NG

LA

DES

Bangladesh has been the hot topic in the news of the fashion industry. It has a bad reputation for poor working conditions, low wages, and child labor, all which have been reoccurring problems. Because of this, sourcing from Bangladesh without having an established relationship with a trusted manufacturer is difficult to do. The internet is not widely available in the country (less than 20% of people use it)- this means many manufacturers do not have websites, and the ones that do are extremely hard to navigate and lacking needed content. Without a thorough website, it is difficult as a buyer to trust the company. In order to gain a better understanding of each company we contacted them through email and phone calls as well as contacted the BGMEA, apparel trade association, for a list of trusted manufacturers That being said, the suppliers selected for initial research were chosen based on their possible compatibility with JAKE Handbags. This includes the capacity, customers, sourcing guidelines, costs, lead time, services offered, costs, and customer service. Their Panjiva profiles and completeness of their websites were a driving force in choosing the best suppliers. One of the most important factors in choosing the best competitor was the customer list. With trusted customers, we can assume the manufacturer is trustworthy and capable. The top 10 from Bangladesh all had good capacities, capabilities, flexibility, and costs but were lacking more when it came to sourcing guidelines, customer service, and customers. The top three suppliers were chosen largely because of the quality of information they were able to provide for us. Each had quality websites that provided insight to the integrity and credibility of the companies.

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US-Bangla Leather products Ltd. is an emerging 100% export oriented leather goods manufacturer in Bangladesh. It is a joint venture initiative between United State and Bangladesh and it part of the larger US-Bangla Group in the process of Group business diversification. They intend to provide a variety of leather bags and leather goods & services precisely developed to the meet the needs of each client. They prioritize product development and design, merchandising follow-up, quality control and Just In Time (JIT) delivery. Their commitment towards the satisfaction of their customers needs is the top priority. This is made evident through their prompt responses and readiness to meet every need of JAKE Handbags. The team is dedicated to ensuring quality products and services to their clients. US-Bangla believes in providing a better value for the money, consistently striving for technological advancement and research so as to ensure quality product. The factory itself has many services such as a day care center, health care center, canteen, prayer room, and buyers guest house which JAKE Handbag employees has been invited to visit. Their customers include Japanese companies like Kitamura, Shimokawa, Top Run, Police, A style, etc. They have just started development with H&M, Zara, Samsonite, Youngone etc. With diverse and trusted customers such as this, it shows the company is growing and can meet our needs in capacity and sourcing guidelines. US-Bangla produces 50,000 products a month but is quickly increasing with the new customer base. Furthermore, they gave a verbal confirmation that our target costs can be met and even lowered. Mission: To provide best quality leather products with competitive price to the International market through maximum utilization of the countrys hides & skins with continuous growth in order to have major market share. Our immediate motto is to explore the right market and hit the target with vigorous propulsion to redefine the leather fashion technology in the existing global leather products market. Vision: To be one of the best leather goods manufacturing industry in the world by 2020 and be the company that our customers, shareholders and the society want. To be the preferred and most trusted name in the leather goods manufacturing arena in the world by 2020. Values: Customer first, Loyalty, Commitment, Cutting Edge /State of the Art /Pioneering Technology, Creativity, Integrity, and Social Responsibility

#1: US BANGLA LEATHER PRODUCTS LTD.

Factory Details Total factory area: 80,000sqft Total workers : 300 Total store area: 10000 Total production area: 50000sqft Total office and showroom: 10000sqft Total sewing machines: 50 Total cutting machines: 7 Total skiving & splitting machines: 8 Other machinery: 20

US BANGLA LEATHER PRODUCTS LTD. WAS CHOSEN AS OUR MANUFACTURER FOR BANGLADESH

Best Attribute Responded quickly and extremely eager to help. Commitment to customer satisfaction is top priority. Has impressive customer base.

#2: PICARD BANGLADESH

Picard Bangladesh Limited is a joint venture company, which was established in 1995 in conjunction with PICARD Lederwaren Gmbh Co. & KG. The company manufactures leather hand bags, briefcases and small leather goods for export in the international market. The Picard brand was originally established in Germany in 1928. The company is family owned and is currently in its fourth generation of ownership. Picard Bangladesh Limited has come a long way since its inception. The factory started with about 60 workers in a small production floor of about 2000sqt.

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Currently the factory is located in the heart of the new industrial area at Kondolbag, Zirabo, Savar, which is approximately 30km North of Dhaka. The company now employs about 1200 people and has a production area of approximately 70,000sqft. In addition to manufacturing for the PICARD brand, they are also involved in production for our other customers based in Australia, Europe, Canada, Japan and Singapore. The Companys objective has always been to manufacture and export high quality leather goods at the best price possible for their valued customers. Vision Picard Bangladesh Limited aspires to become one of the largest leather goods manufacturing units within the subcontinent. The companys short term goal is to diversify its export into new markets. Its long term goal is to become a recognized name world wide as a manufacturer of high quality leather goods. The vision for Picard Bangladesh is to have a sustainable growth in terms of output and quality and to make a significant contribution towards the betterment of the workforce in the company. Picard Bangladesh has, had and will always strive to be true to it motto which is We are never on time; rather we are always ahead of time. Facilities The Facilities at Picard are a huge attraction for JAKE. They strive to take care of their employees and offer many free services for their well-being which is in line with our guidelines. Picard believes in taking care of its employees and the company is dedicated towards providing facilities to its employees which will enable them to have a better work life. Day care facilities are provided to the workers and the day care center located within the factory grounds. The day care center is free for all employees and children admitted will receive food and regular health check ups funded by the company. The company also has free complete health check ups facilities for its entire staff and there is an arrangement with a local clinic where the staff can also receive emergency health care services during off duty hours. Picard Bangladesh also has comprehensive group insurance for all the workers. In cooperation with the Government of Bangladesh the company has started a program to educate its workers lacking basic primary education. Till now, 80 people has been successfully educated through this program. In addition, the company also hosts annual picnics and sports carnivals for the entertainment of the staff.

Factory Details Total factory area: 50,000sqft Total store area: 6240sqft Total production area: 24000sqft Total office and showroom: 4080sqft Total sewing machines: 90 Total cutting machines: 17 Total skiving & splitting machines: 15 Other machinery: 22 With the current production capacity Picard Bangladesh currently produces 25000 bags and 27000 small leather goods per month. Using our total production capacity, 70% of our output is for the Picard brand and 30% is for other brands. Guidelines Picard Bangladesh Limited has very stringent regulations regarding compliance issues and OHS matters. The Company strictly follows government building regulations as well as having ample fire fighting equipment and exit spaces, first aid stations, filtered drinking water facilities in the production floor and day care facilities. Picard Bangladesh also complies very stringently with ILO regulations and has group insurance and provident fund facilities for the whole workforce. The company pays special attention towards occupational health and safety issues as all on the job accidents and liabilities are covered by the company. Special regulations are also in place to ensure that protective gear is worn in places with health hazards. Best Attribute High Quality. Strict Regulations and many additional facilities and services show a high level of care for their employees and partners.

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#3: FORTUNA SHOES & BAGS LTD.

This privately held entrepreneurial and innovative company is an extremely well-developed manufacturer that is one of Bangladeshs leading footwear and leather goods company. The state of the art footwear & bag manufacturing plant has a capacity to produce 6000 pairs of shoes & 500 bags per day (195,000 per month). The factory is in two parts: Unit 1 is 40,000 sqft and Unit 2 is 30,000 sqft Unit 2 and are both located in located in Fortuna Park, Kunia, Gazipur Bangladesh. The capacity is more than enough than JAKE needs right now, however with our plan to grow 15% each year for the first five years, we will need these large capacities in the future. Fortuna Shoes not only thrives for giving the customer the latest models of footwear and leatherwear, it expands its opportunities by maintaining and increasing the value of its products. Fortuna has its own shoe last factory, outsole factory and a leather factory as part of the value chain. Fortuna Shoes is known for its world class leather products with modern style and great packaging. Fortunas leather products include ladies and gents shoes, leather bags, men gears like moneybags. Fortuna Shoes has a client base from all around the world. They make sure that the clients are served with the best quality of service. The company is currently exporting to France, Japan, Spain, Australia, and Germany. Clients from around the world include Otto Hermes- Bon Prix & Body Fit Brand (Germany), Farest Accessories Ltd- Mellow Yellow, La Redoute, 3Suisse Collection (France), Shinco Seni-Johny Moke (Japan), Yass International - (Japan) (Bags), Penta Shoes - Authentic (Spain), Juju-Bags Australia, and Motherhouse - Bags Japan etc. If JAKE were to manufacture with Fortuna we could be the first American relationships for the company which would allow us to mutually benefit from the partnership. Fortunas vision is open to strategic partnerships and joint ventures that will help both sides to develop further and prosper in the long run. This is great for JAKE because we want to develop and prosper, and grow with a great company. Developing trusting relations with clients, partners and employees based on honesty, integrity and sincerity are part of Fortunas values all of which fall in line perfectly with ours. Best Attribute Very well-established, professional website, and long list of customers shows they are trustworthy and will make good partners.

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CA

MB

ODI

After having selected ten suppliers that seemed to be the most viable in our selected countries. Ten suppliers were researched that specialized in leather and faux leather handbags and luggage, and who would be able to manufacture our bags. Quality standards, and how their manufacturing process would benefit our company were considered. Followed by that, other criteria was considered, such as their abilities, capacity, flexibility, lead-time, customer ser vice, top customers, and sourcing guidelines The suppliers picked were the ones able to find the most information on, and most information on their customers. The main criterion looking at for Cambodias suppliers was definitely based on customers, and their sourcing guidelines. These suppliers seamed to be the one that matched best our companys sourcing guidelines.

#1: Kap cambodia

KAP Cambodia is a manufacturer capable of producing almost any type of handbag. They have 610 employees working for them and have a capacity of supplying 10,000 units per shipment. They are a small company, communication is available through phone numbers and email, but they do not have a website. Some of their customers include RUSSI USA, STUDIO NAZAR Inc, R&J BAGS, and JC USA. They are rather flexible, produce only handbags but can make almost any style based on their customers. Based on their cusomers and their guidelines and values, KAP seems to have strong values as well as good sourcing guidelines. Their bags are of high quality and the manufactur fast-fashion handbags as well.

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#2: Wah sun factory

Wah Sun is a supplier with the abilities to manufacture: Ladies and gentlemens bags, rucksacks, sports and leisure bags as well as purses made from synthetic and nylon materials, cotton, patchwork and leather. They have a little over 510 workers. It is a small company, not much information is available online, and they dont have a website, but they have email addresses, physical addresses, and phone numbers available for contact. Their biggest customer is Rosetti Handbags LTD- a wholesaler that sells handbags to big stores such as JC Penny, Belk, Sears, and Amazon. Their products are of good and high quality, but they also produce cheaper and fast fashion bags. Based on their customers their guidelines seem good and in harmony with our guidelines. Seem to have core values, employee empowerment, and credibility within the Rosetti and other companies it works with.

#3: zhongzheng

Zhongzheng manufacturers have the ability to produce totes, leather messenger bags, polyester computer bags, force bags, handbags, and request the minimum order to be of at least 20,000 pieces at a time, with the ability to manufacture 500,000 pieces per month. They have: 716 employees and have had a total 67 total shipments, according to panjiva. They dont have a website so communication is limited but available over email or phone calls. Some of their main customers are Atrium Buying Corp, Stephen Gould Corp, GEMLINE, SME consolidated, The gem group. Their sourcing guidelines are not available and neither are their values, but due to their customers guidelines and values, their codes of conduct, should be similar or somewhat similar to ours. Produce good quality bags, luggage, and leather goods.

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TA

IWA

When deciding faux leather handbag suppliers in Taiwan, which were limited to begin with, I decided to focus on a few main factors: customers, services, quality, production units, a strong management system or the evidence of a website, and a sense of growth or expansion. If manufacturers had similar customers, their sourcing guidelines will hopefully be similar to those of JAKE. Also, the large evidence of similar customers resulted in a guarantee of quality for our handbags. For example, some manufacturers had customers like Kmart and Walmart, which are fast fashion companies who require many units, but do not have the higher standards of quality that JAKE requires. Quality needed to be guaranteed and evident through pictures and customers. Service flexibility was essential, as well, because when JAKE grows in the future, bag designs may fluctuate between many different styles and we need to ensure our manufacturers can handle these future designs. Also, evidence of different teams, like research and development, quality control, technology, etc. was essential so if JAKE ever needed those additional services, there were available. Production units was also required because we are a fast fashion company, requiring over 650,000 units per year, with certain seasons high than others. We require many shipments throughout the year and with many units amongst them. For some strong manufacturers, they produced to excellent customers and were in a great location in Taiwan, but their unit production was around 200,000 units a year, which is extremely low for JAKE. A strong sense of corporate values and culture was necessary for us at JAKE, especially because these manufacturers need to reflect our company values and sourcing guidelines. A sense of honesty, respect, communication and empowerment, especially for women, was a beneficial thing to see on many of these manufacturers websites.

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Despite the wide range of manufacturer selection, for JAKE, there needed to be a sense of growth within the manufacturer that could handle our initial start-up units and designs and would then grow with us and be a strong force in the manufacturing industry. Overall, we needed to select top manufacturers that reflected our company values and show a strong customer base and quality standards, whose high prices we could certainly overlook.

#1: taiwan yamani inc.

With a wide range of product offering, their strength lies in handbag manufacturing, specifically those made of leather. Innovation and technologic design and manufacturing are strengths of theirs as well. They have a strong ability to utilize a wide range of materials throughout a wide range of handbag designs. With a strong experience in leather handbags, that is their strongest ability. 6,000,000 pieces of womens handbags per year is their highest level of capacity. This is their strongest commodity and largest capacity. With over 7,000 employees, these demands can be met. Not quick to respond, but have a very valid website, with a strength in company culture. Shows strength in putting the customer first in all aspects of the manufacturing process and has over 70 years of experience with their validated customers. Their high quality leather products have gained worldwide recognition, so their customer service has to equal that quality. Some of their largest customers include Coach, Levenger and Pierre Cardin, who is the leader in licensed products. These high-quality companies are utilizing Yamani because of their high quality and high unit turnaround. These company unit sizes and quality should be an example for our backpacks. Not extremely flexible when it comes to other products other than handbags, because that is Yamanis main focus, but specific handbag designs are interchanged quite frequently. It is easy to change between handbag designs, but not between other products, such as bag accessories or apparel. Also, when the turnaround rate is much quicker for fast fashion products, rather than high-quality designer goods, this faster rate might not be normal for Yamani. Roughly about 60 days from purchase order to sent shipment, which is fairly average for a large manufacturer. Yamani is used to large quantities and quick shipments, so this should not be an issue. With such a strong customer base and large employee base, the lead-time should be average, if not faster.

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Yamani has been around for over 60 years, so the entire Yamani United Group has core business values, with honesty being at their core. They utilize and promote advanced technologies, leather quality testing and worldwide recognition for their quality since they have been opened. Management continues to provide opportunities for employees and customers and continues to grow the business. Quality leather handbags are what Yamani is essentially known for and has been known for over 60 years. They have a specific design and quality team to provide leather quality testing for cracking, stretching, etc. They pride themselves on providing high quality leather handbags and luggage worldwide. They also pride themselves on being a luxury brand manufacturer, which demands that high quality product. Achieved the national quality certificate of AAA. With over 70 years of experience, there is an attention to detail, creativity, and quality that establishes the Yamani company. Yamanis main focus is in leather goods, like small leather goods, womens handbags, backpacks, wallets, belts, briefcases and luggage. Other services include leather product quality testing and research and design teams. Technology advancement teams are also services offered for customers to improve and innovate their products. Quality testing is their strongest area of business. Yamani is constantly looking to grow their manufacturing branches and countries to promote their production. Their goal is to establish retail locations by 2016 to ease the distribution process and to strengthen that relationship. With a stronghold in the Asian market, they are looking to penetrate the international market to serve more customers. They have also looked to their strongest customers to increase their retail locations to also promote Yamani manufacturing. Honesty is at their core at Yamani. Employees are trained before beginning to work and receive a salary based on their work performance. With an insurance system and personnel leave system put into place, there are distinct and fair working guidelines for their workers they consider people-oriented. Yamani focuses on the empowerment of their employees to achieve their dreams and goals while working at Yamani, stimulating their potential and awarding them for great work.

TAIWAN YAMANI INC.WAS CHOSEN AS OUR MANUFACTURER FOR TAIWAN

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#2: STARITE INTERNATIONAL LTD.

With strength in handbag and sport bag manufacturing, Starite also has a stronghold in design and efficient manufacturing. From design and development teams to testing lab equipment, there are many design services offered for Starite customers. Quality control is another strength of theirs, as well. With larger customers focused on backpacks and travel bags, their strength is handbag manufacturing. No strong description on capacity, but with a large customer base, there is evidence that they will be able to handle a fast fashion companys demands. Roughly, there are about 300,000 units produced every month and with lean manufacturing, the quick production process is their strongest aspect. With over 30 years in the manufacturing business, one of their core company values is collaboration with their customers and their partners. They are known for having high quality and strong partnerships with their customers to keep customer service strong. They also had many forms of contact information, but were not quick to respond. Known for being easy to work with and having strong relationships. Startites customer base is extensive and very close to JAKE Handbags needs. Customers include Target, Adidas, Samsonite, Jansport, Camelback and Columbia. These customers demand high quality, technologic products, but at a lower cost and quick turn-around, which is essential for our business, as well. Customer base is their strength at Starite. Starite is semi-flexible when it comes to the production of other products other than handbags or bags in general. They also produce footwear for some customers, but in general, they are not that flexible with designs other than bags. Sport accessories are also another aspect to their manufacturing business, which gives them a diversity. Not specific on lead-time, but with lean manufacturing, Starite is known for having a quick turn-around and being efficient with production. Production from many factories also allows a quicker lead-time for Starite. Starite can more than handle large shipments shipping quickly due to the large customer base and large unit production. Starite is led under Prosperous Group and is the largest cut and sew manufacturer in the Asian countries. Their commitment is to every aspect of the production process to exceed expectations every step of the way. Regional offices are located internationally, which gives them a global voice. Their vision is to provide and fulfill their customers needs first and foremost.

Competitiveness is one of Starites corporate values, stressing cost-efficient products, as well as high quality products. With a strong designer customer base, quality is necessary for all of their products. There is a strong commitment to quality through routine quality checks and inspections on a daily basis to ensure high standards in every part of their manufacturing business. Services include the production of backpacks, camera bags, CD cases, cosmetic bags, luggage, messenger bags, golf bags and womens handbags. Other services include quality control, daily inspections, technology advancements, design, research and sourcing teams to provide the highest quality and most cost efficient products for their customers. There is not a definite outlook on their future as a bag manufacturer, but based on their ratings, there are signs of growth. With a strong customer base that shows growth, there is a strong sign that Starite will grow further in the future. Also, showing a growth internationally, their strength is imminent, but nothing prospective at the moment. Possibly the strongest aspect of their business is Starites sourcing guidelines. From outstanding worker awards and elections, there is a sense of empowerment, goal making, accomplishment and collaboration. Their core values include responsibility through lean manufacturing, creativity, credibility, and streamlining partnerships. They empower their employees and provide safe and healthy working conditions for an effective and quick production cycle.

#3: Heilian inc.

As a small company with only over 100 workers, Heilian is able to produce a large amount of units at a very quick rate. Their strength is in womens handbag production to large manufacturers like Walmart and Kmart. Their main ability is in the production of handbags in many different materials, throughout many designs. Heilian ships over 400 shipments of unit to the United States within the past year and shows growth to increase those units. Shipment volume averages around 10,000 to 25,000 units per shipment, averaging at close to 5,000,000 units per year. There does not seem to be strength in many shipments, but in large unit shipments. As a small company, communication is available, but difficult. Heilian puts their customers, design and production first, but doesnt widely display these attributes. They pride themselves on being a small manufacturing company with strong production and strong customers, not ethical aspects of the business, necessarily. The strongest aspect of Heilian is their customer base. Walmart, Kmart and Payless are their biggest customers, with large shipments sent to the United States. Focusing on handbags and backpacks, the production of these is specific to these markets in infrequent and large shipments. Heilian is not very flexible when it comes to production of other goods other than handbags. Specific designs, like duffle bags and technology accessories are available, but in general, basic bags are available. Because Heilian is such a small company, the ease of flexibility might not be evident. As such a small company with only over 100 workers, lead-time seems to be slower than average. On the other hand, with large retail customers like Walmart, Payless and Kmart, there needs to be a sense of urgency and demand for fast fashion products. Lead-time is not as fast as the competitors, but still reflective to demand. Because customer service is not evidently apparent, management values seem to take the same quality standards. There are no evident values or strengths of their management, but they are expected to grow continuously in a strong manner within the next few years, which reflects a strong management. Quality standards are Heilians strongest aspects because of their small company size. With such few workers, their quality can be constantly checked and monitored. They are known for high quality products that attract customers like Walmart, Payless and Kmart. For fast fashion, however, the quality standards may not be up to designer quality standards.

Heilian is more diverse in the products offered, such as duffle bags, womens handbags, backpacks and technology accessories. With such a diverse product offering, there is a sense of design freedom and teams to help with these processes. Design and development teams are available, as well. Heilian, however, is not necessarily focused on research and development and technologic advancements. Based on Heilians website and other online resources, they have received many ratings that show a stronghold in the international market in the future. With a short history in manufacturing, there are beginning their upward tick at this moment and look to show continuous and strong growth within the next few years. Just like management and customer service values, their sourcing guidelines were not widely available, other than the basic health, safety, discrimination standards that every manufacturer employs. This could be a cause for concern, but as a small company, there may not be an immense amount to watch out for. With such a lack of regard for these guidelines, this needs to be watched in the future, especially as they grow as a strong, international manufacturer.

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D N A

#1: boss leather goods

Boss Leather Goods is more than 25 years old. They specialize in business cases, computer cases, catalogue cases, backpacks, luggage, luggage accessories, duffle bags, casual bags, executive writing pads, and custom requests. In 2003, they became the exclusively licensed distribution company for McKleinUSA in Southeast Asia. Customers: Kenneth Cole, Calvin Klein, Travelpro, Costco

#2: royal handbag

Out of these manufacturers, Royal Handbag Co. Ltd. has had the highest level of consistent shipments Royal Case and Brackerton are among their customers. Their most common product shipments consist of bags, polyester products, and pvc products. Customers: Royal Case Co., Brackerton Inc

#3: dragon handbag

Dragon Handbag was founded in 2012. They specialize in bags, handbags and other polyester goods. Their registered capital is currently $25,000,000. Customers: Polo Ralph Lauren, Brighton Collectibles, and Brighton Footwear.

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Of these manufacturers, there seem to be a clear top three in terms of possible manufacturers for JAKE products. These decisions were based on many factors such as age of company, legitimacy of current customers, legitimacy of website, shipment numbers, quantity of available information, and more. Seemingly the best of these choices is Boss Leather Goods in Samut Prakan, Thailand. Not only does the company have more than a twenty-five year history, but they also have reputable customers. Kenneth Cole, Calvin Klein, Travelpro, and Costco are the top customers of Boss Leather Goods. Not only are these customers recognizable and reputable, but they are also known for their high-quality leather and faux leather products. They make business cases, computer cases, catalogue cases, backpacks, luggage, duffle bags, casual bags, and more. This demonstrates the possiblity of high capability to produce the different JAKE styles. Royal Handbags in Pathum Thani, Thailand would be the next choice. They have the highest level of consistent shipments among these manufacturers by far. Their reputable customers consist of Royal Case Co and Brackerton Inc. Bags are their main focus, with a concentration in polyester and pvc products. The last choice of the top three would be Dragon Handbags in Bangkok, Thailand. The weakness of Dragon would definitely be age, as the manufacturer was only established two years ago. The quickly profitable company has worked with reputable brands as well such as Polo Ralph Lauren and Brighton. They are also a very attractive choice because they specialize in polyester handbags and bags. Although young, this company presents a definite front-runner as far as manufacturing choices for JAKE within Thailand. Elimination While these manufacturers all had promise in different areas, we received no response from all three. Some of the manufacturers didnt even have a voicemail set up with their international dialing number. This furthers our decision to eliminate Thailand as a choice for the manufacturer sourcing process.

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t e vi

m a n

The three suppliers were narrowed down mainly based on their customers, their amazing customer services and the type of products they create. Vietnam has over 200 handbag manufacturers which has proven to be very beneficial towards JAKE. Because there is so much competition, the suppliers were eager to do business and were constantly in contact with our company, answering any questions and providing spreadsheets on prices, guidelines and other important information. Because there are so many different suppliers to choose from, we narrowed down our selection by customer. Jinjiang Jiaxing Shoes & Garments Co. work with huge companies such as Disney and Wal Mart, companies that have strict sourcing guidelines and are constantly being watched in terms of violating rules that are important to follow regardless of your business. Trusting our supplier is key and by the list of customers we know that this manufacturer can be trusted to provide what we need, how we need it and when we need it.

#1: jinjiang jiaxing shoes & Garments co. ltd.

This company can create almost any type of hang bag or type of bag product, mostly tote bags and other types of cheaper fashion bags. The staff consists of 1,490 people and well trained to handle different kinds of requirements for product specifications. 3,000 pieces FOB price of US$1 for a typical backpack. There is a tab to contact the supplier on every single page, link or website outlet you visit for this company. Their customers include Disney, Wal-Mart, Speedo, Bata and Quicksilver. This company produces many types of cheaper fashion products and can produce a type of fashion hang bag that is not as fancy with real leather. The lead time is approximately 30 days once order is placed. 100 R&D engineers and 15 designers. Many tabs to contact management on each of the companys pages.

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This company offers services for any type of handbag and they make sure to state that they offer the services required to create the product desired, their staff is highly trained and very large. They clearly values their products as well as their customers, you can tell that they strive to deliver the best products and best services while following rules and guidelines. They have been approved by many secured authenticity companies as well as third part verifications. They have 6 stars on the global sourcing website for 6 years in a row and have been approved for over 20 years of manufacturing experience.

jinjiang jiaxing shoes & garments co. ltd. WAS CHOSEN AS OUR MANUFACTURER FOR vietnam

#2: thai duong co. ltd.

Thai Duong Co. Ltd. Specialized in manufacturing many different types of bags and products and has been manufacturing and exporting fashion bags made of natural materials since 1993. Their total revenue reached $10-50 million. Their capacity can product a number of 10k products with quality per month. They employ a skillful and well disciplined labor force of more than 250 workers. They have reached markets in countries such as the US, UK, France, Taiwan, Korea, Japan, Canada, and Italy. This company can create almost any type of hang bag or type of bag product and their capacity is huge and orders typically have a minimum of 200. The costs are fair for genuine leather pieces, however, there is a minimum order of 200 for most items. There is a tab to contact the supplier on every single page, link or website outlet you visit for this company. They seem to produce mostly genuine leather which could pose an issue to our faux leather products with a lead time of Approximately 30 days once order is placed. The director, Duong Tran Thai is made clear on every part of their website and is available for contact. This company offers services for any type of handbag, it seems as if they can create anything/provide what is asked for. The company clearly values their products as well as their customers, you can tell that they strive to deliver the best products and best services while following rules and guidelines. The Sourcing Guidelines have been approved by many secured authenticity companies as well as third part verifications

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#3: tmh vietnam co. ltd.

This company creates woven baskets or polyester bags, not much variety when it comes to other fabrics or leathers. With 10 Employees and registered in 2012 30,000 units per month, their FOB Price of $1, minimum order quantity of 300. Easily seen that this company values their customers, direct emails as well as contact forms for customers to get in touch with company. Their customers include Disney, WalMart, Speedo, Bata and Quicksilver and can supply 30,000 per month. The lead time is Approximately 30 days once order is placed with 10 designers. Website would not load well when trying to find out who management was and there was not much variety when it comes to fashion hang bag services, however, polyester hand bags are one of their specialties The company clearly values their products as well as their customers, you can tell that they strive to deliver the best products and best services while following rules and guidelines. They have been approved by many secured authenticity companies as well as third part verifications. The company is not a large factory, maintaining only 10 trained employees following our guidelines.

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67

SUPPLIER RANKING
Scale of 1 to 10 with 1 being the worst and 10 the best

Vietnam
Jingjiag Jiaxing Thai Duong TMH

Taiwan
Taiwan Yamani Inc. Starite Int'l Ltd. Heilian Inc. US-Bangla

Bangla
7 7 7 10 6 7 7 8 7 8 6 80 6.7 9 5 9 9 10 8 6 7 7 9 5 7 91 7.6

Fortu

Abilities Capacity Costs Customer Service Customers Flexibility Lead-time Management Quality Services Offered Strategic Outlook Sourcing Guidelines Total Average

9 9 8 9 8 6 7 10 7 8 9 8 98 8.2

9 9 8 9 8 6 7 10 6 8 9 8 97 8.1

6 9 8 9 8 6 7 6 6 8 6 8 87 7.3

8 10 9 10 6 7 9 9 8 8 9 93 7.8

7 6 8 10 6 7 9 9 9 6 9 86 7.2

9 9

3 5 7 5 8 8 6 7 6 73 6.1

Jinjiang Jiaxing Shoes & Garments Co. Ltd., Taiwan Yamani and US Bangla became our top three suppliers based on our chosen countries. These three manufactuers were selected based on the above rankings. In addition, they also received the highest scores for each country based on many different factors, such as capacity, management, quality and sourcing guidelines. For JAKE Handbags, our first priority is quality. Our handbags are well known for being high quality, but at a great price point and sold in a fast-fashion manner. With Urban Outfitters as our main selling venue, we want to carry that same aesthetic in every style of bag we produce. Our manufacturers and especially the three that we have chosen rank an average of 8 on quality, which is high for our standards. At JAKE, our next priority for production is their sourcing guidelines and management to implement those guidelines. How they treat their employees, the way in which they work and manage and the programs and training they offer their employees. Also, the way in which they communicate and effectively work with their customers is key. Our manufacturers sourcing guidelines need to reflect JAKEs, which at the root, are our company core values. A sense of communication, empowerment, growth and honesty are key to our company and should be key to our chosen manufacturers. On average, our three chosen manufacturers scored an 8 for sourcing guidelines and the availability of those guidelines in the

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workplace.

Bangladesh
Heilian Inc. US-Bangla Fortuna Picard Kap

Cambodia
Wah Sun ZhongZheng Boss

Thailand
Royal Dragon

nt'l Ltd.

7 7 7 10 6 7 7 8 7 8 6 80 6.7

6 2

9 5 9 9 10 8 6 7 7 9 5 7 91 7.6

9 9 3 5 7 5 8 8 6 7 6 73 6.1

7 7 6 7 8 4 8 8 9 7 9 80 6.7

9 7 5 7 6 7 7 9 8 6 9 80 6.7

9 9 5 5 6 6 7 8 8 6 8 77 6.4

6 9 5 5 6 6 7 8 8 5 8 73 6.1

9 8 3 9 10 5 8 7 5 6 70 5.8

4 10 1 4 4 0 2 3 5 0 33 2.8

4 5 6 7 4 0 7 4 5 5 47 3.9

For example, Taiwan Yamani in Taiwan has a strong company value system, provides training and empowerment to employees and continues to stress honesty, integrity, growth and perser verance within the workplace, a benefit for JAKE Handbags. Another aspect that JAKE takes in to account when choosing top manufacturers is a strong customer base. As a company, we produce a different type of school bag- one that is high quality, but at a fast fashion rate and price. Our components are sourced to therefore keep production costs down. We need to ensure from our manufacturers that despite this, there are strong quality standards that can be seen through their customers. For example, customers include Zara, H&M, Disney and Levenger within our top three chosen manufacturers. This is a wide range of quality standards, products and production rates, but this fits perfectly for JAKE. Although we are a fashion company, we do not produce as quickly as H&M, but not as slow as Levenger. We chose manufacturers very wide on the spectrum of skills, quality and ser vices in order to cover all of our style and design bases. There also needed to be a quicker lead-time in order to produce the 650,000 units annually to ser ve our customers. JAKE also takes into consideration cost. While not as important as other factors, it is beneficial to keep costs low in order to make a profit. Costs for these three manufacturers were low enough to be attractive and to begin production in the future.

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For the Fall/Winter 2014 season, JAKE Handbags has designed 5 different styles of school bags. The Foldover bag, the iPad/Tablet bag, the Laptop bag, the Bucket bag and the Drawstring bag are all styles a part of this seasons launch. Our goal is to launch 650,000 units per year, with a strong focus towards the back to school season. Retail prices range from $25 to $50 for this season, with costs around $8.
JAKE Handbags
LINE PLAN F/W 2014 SPRING JAN FEB STYLE # Style 001 Style 002 Style 003 Style 004 Style 005 NAME Foldover iPad Laptop Bucket Drawstring TOTAL SUMMER MAR APR Fall/ Winter MAY JUN JUL AUG
Quantities

SEP

OCT

Quantities Quantities Quantities Quantities Quantities Quantities Quantities

Quantities Quantities

15,000 2500 2000 2000 3000 24500

15,000 2500 2000 2000 3000 24500

7,000 5000 3500 1000 1000 17500

7,000 5000 3500 1000 1000 17500

15,000 5000 3500 1000 10000 34500

15,000 8000 10000 10000 10000 53000

45,000 20000 25000 35000 40000 165000

45,000 20000 25000 35000 40000 165000

12,000 5500 3500 5000 10000 36000

6,000

3000

3500

5000

2000

19500

FOLDOVER BAG : $50 AT RETAIL $6.94 AT COST IN TAIWAN TABLET BAG : $25 AT RETAIL $4.87 AT COST IN BANGLADESH

05
COSTING
-PRELIMINARY COSTING SPREADSHEET -COMPARISONS: INITIAL SUPPLIER QUOTES VS. PRELIMINARY COSTS

LAPTOP BAG : $35 AT RETAIL $7.58 AT COST IN CAMBODIA BUCKET BAG : $40 AT RETAIL $6.88 AT COST IN VIETNAM DRAWSTRING BAG : $30 AT RETAIL $6.63 AT COST IN THAILAND

In relation to product volume, our most popular and classic bag, the Foldover bag, holds 30% of the production, with 195,000 units produced annually. The Bucket and Drawstring bags, both unique and fashion forward, hold 20% of production due to their popularity, yet special qualities. Both styles produce 130,000 units annually. The Tablet and Laptop bags are slightly less popular because of their specific use and lack of fashionable forward elements, both producing 15% of our total units.
AUG
Quantities

all/ Winter SEP OCT

UL

HOLIDAY NOV DEC

TOTAL

Wholesale
Per Unit

Wholesale
Total

Cost
Per Unit

Cost
Total

Margin
$ Per Unit

Margin
% Total

Quantities

Quantities Quantities Quantities Quantities

45,000 20000 25000 35000 40000 165000

45,000 20000 25000 35000 40000 165000

12,000 5500 3500 5000 10000 36000

6,000 3000 3500 5000 2000 19500

6,000 10500 8000 16500 5000 46000

7,000 10500 8000 16500 5000 47000

195000 $ 97500 $ 97500 $ 130000 $ 130000 $ 650000 $

50.00 25.00 35.00 40.00 30.00 45.00

$ 9,750,000.00 $ 2,437,500.00 $ 3,412,500.00 $ 5,200,000.00 $ 3,900,000.00 $ 6,175,000.00

$ 6.94 $ 4.87 $ 7.58 $ 6.88 $ 6.63 $ 8.23

$ 1,353,300.00 $ $ $ $ 474,825.00 739,050.00 894,400.00 861,900.00

$ 43.06 $ 20.13 $ 27.42 $ 33.12 $ 23.37 $ 36.78

86% 81% 78% 83% 78% 81%

$ 1,080,868.75

Each style produces 97,500 units annually. This seasons styles are essentially equally popular, but the Foldover bag is our most popular and widely utilized and recognized. For a start-up company, like JAKE Handbags, our initial launch for the F/W 2014 season is 650,000 units total throughout a year. As a smaller company, we want to stress our products delivery towards the summer months as well as right before the holiday season. Our bags and backpacks are focused towards a younger student, so to increase volume and production before August and September is crucial. Because of this, a larger volume of our units are produced and shipped to retail stores in May, June, July and August, as well as over November and December. As far as costs, these intial costs were conducted in our specific countries seen to the left, as our manufacturers had not gotten back to use with specific quotes. Due to components and time of construction and cost of labor, the Foldover bag is the most intense to make, taking the longest, where as the Drawstring bag is the least complicated to make and has the fewest components. In order to increase profit, we wanted our margins to hover around 80%, so our average margin at these costs give us an average margin of 81%.

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JAKE Handbags Margin Comparisons

PRELIM COST | QUOTED COST Vietnam Bangladesh Style Retail Price Prelim Quoted Prelim Qu Foldover $ 50.00 $ 6.85 $ 4.00 $ 7.13 $ Tablet $ 25.00 $ 5.00 $ 3.40 $ 4.87 $ Laptop $ 35.00 $ 6.15 $ 3.60 $ 6.33 $ Bucket $ 40.00 $ 6.96 $ 4.10 $ 7.27 $ Drawstring $ 35.00 $ 5.82 $ 3.50 $ 5.91 $ Average Margins $ 37.00 $ 6.16 83% $ 3.72 89% $ 6.30 82% $

In general, our costs were a bit higher than any suppliers quoted costs. For example, especially in Bangladesh and Vietnam, production costs are much cheaper than expected and can sometimes fall even lower than predicted. However, in Taiwan, where production costs are netorious for being more than average, our preliminary costs were much lower than our quoted or negotiated prices. This could be directly related to the high quality standards and production that is found in Taiwan. Higher production costs could also be a result of a higher minimum wage than in Bangladesh and Vietnam and could also be a result of the necessity to out source many of our materials. Taiwan depends heavily on international trade and never really produces anything for domestic use. Buckles, faux leather, thread, etc. would all have to be outsourced from other countries, which would lead to higher production costs. In Taiwan, our costs were also negotiated 11% higher as a result of the sharp reduction in costs in Vietnam. This way, our quotas and margins are met and we also save money in lower costs in both Vietnam and Bangladesh. Our margin requirement is around 80% and we have continued to achieve this margin throughout our entire sourcing strategy and negotiation process. Whether we negotiate higher or lower,

72 our

goal is to maintain that 80% margin, which we have achieved as shown.

5 0 5 6 2

Quoted $ 4.00 $ 3.40 $ 3.60 $ 4.10 $ 3.50 $ 3.72 89%

Bangladesh Taiwan Prelim Quoted Prelim Quoted $ 7.13 $ 7.13 $ 6.94 $ 6.53 $ 4.87 $ 4.87 $ 5.07 $ 4.69 $ 6.33 $ 6.33 $ 6.52 $ 6.15 $ 7.27 $ 7.27 $ 7.05 $ 6.64 $ 5.91 $ 5.91 $ 6.10 $ 5.74 $ 6.30 82% $ 6.30 82% $ 6.34 84% $ 5.95 85%

3%

In Bangladesh and Vietnam, as mentioned, our costs were negotiated and quoted much lower than originally expected. For example, in Vietnam, our Tablet bag could be produced for $4 rather than $5, which saves that money for the cost increase in Taiwan. Overall in Vietnam, our costs were dropped 15% and in Bangladesh, around 5%. Bangladesh is known for lower production costs, so possibly placing our products at a lower cost to begin with would help achieve higher margin percents and a higher profit. When negotiating these prices, JAKE also took into account the quality, components and production time and what the fair wage and cost would be for these products. For example, our Bucket bag is our signature bag and needs to be produced in a high quality and up to our standards. Therefore, dealing with a higher cost is attractive to us because we know we need to compensate for those more intense production ser vices. Overall, Vietnam is the more viable country to source due to our increased margins and the lower cost of production; quality can lack, however, so to eliminate any risk for production, we also manufacture certain styles in Bangladesh and Taiwan as well. This way, we still keep our high margins and can save money from low costs and utilize high quality for a higher cost.

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COUNTRIES
When selecting our top three countries we looked at the social, economic, and political factors. We also evaluated business etiquette, trade agreements, textile industry, sourcing guidelines, HTS codes, shipping and transportation, location, ports/port location, manufacturers, labor and labor laws, future development, business climate, risks/benefits, work force, geography, and government. We decided that the most important factors for the countries is the state of their textile industry and costs as well as stability within the country.

Vietnam
We chose Vietnam as our number one supplier. Vietnam has a great reputation in the garment industry. It is a top 10 country in textile and garment exports. Even in the economic downturn the textile/apparel industry has seen promising growth. Export revenue exceeded US$ 14 billion in 2011, accounting for 16.5% of the countrys total export revenue and up 38% against 2010. As a small start up, it is important for us to go into a stable and established market to lower our risks and work with knowledgeable and experienced people. The Vietnamese are hard working (only 4.3% of the population is unemployed, and only 11.3% of the population is under the poverty level,) which will contribute to growing the economy. With 50 million workers,

06

the workforce is huge and well trained. Poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. The handbag manufacturing industry in Vietnam is huge, which means there is a lot of competition and constant need to offer buyers exactly what they need. This means the costs very cheap and there are many options to choose from.

STRATEGY DEVELOPMENT - E VA L U AT I O N O F S T R AT E G Y DEVELOPMENT PROCESS

With that being said, the rise of minimum wage in the GDP, the increase in cost of raw materials, utilities, the rise of oil prices, etc. all are contributing to growing costs that could potentially affect our business in the future. The sourcing guidelines are not ideal, but we have pinpointed manufacturers in the country who work with trusted companies who we know have strong values and guidelines that we align with. The government is not ideal but, next to Taiwan, is the most stable of all 5 countries. Not only that, it is the only country that is currently working on a Trade Agreement with the US. This is a huge plus for JAKE. As we look to the future, if there is an agreement that eliminates barriers we will be able to maximize our margins and streamline the importing/exporting process. Coupled with the great prices, the stability of the industry, and the impressive manufacturer list, Vietnam was an obvious top choice. The business relationships we have already developed when contacting Vietnam shows great promise. They are eager to conduct business with America.

Taiwan
Taiwan was a clear frontrunner when evaluating our countries. With free national health care and a fairly democratic country overall, Taiwan is extremely stable unlike our other countries. Not only that, the textile industry in Taiwan is very stable and well established. They are a highly developed economy- Exports brought in close to $300 billion in 2012 alone. Taiwan is the 6th largest textile exporter in the world, with close to $12 billion made from imports. Despite some typical divide the political aspects are extremely stable and riots and coups are not evident in the future. Socially, Taiwan is very stable but lacking in population and workforce. With a quickly aging population and a decreasing birth rate has lent itself to a decreasing work force at the appropriate age. The unemployment rate is low and minimum wage was just raised.

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While this is great for the people, it means the costs in Taiwan are the highest of all the countries. Because we are so focused on fast fashion- creating product based on quantity and maximizing margins- this is a downfall of Taiwan. However, because their quality is so good, we can stand to pay the higher costs for our higher quality and priced items. Job shortages are at an all time high, with over 230,000 job openings. While it does not seem to pose a problem to us right now, it could be a risk to our growing company in the future when looking to produce more and more. However, their future is still promising. With new technologies and prospects in Taiwans future, a $550 billion increase in production is expected by 2015 and $700 billion by 2020. Because of this strong sign of growth and strength in exporting, especially in the textile and apparel industries, production of JAKE Handbags would be high quality with a quick lead-time. Also, Taiwans strict sourcing guidelines are an important factor for JAKE as we know we should not run into any labor or environmental issues in the future.

Bangladesh
Choosing between Bangladesh, Cambodia, and Thailand, was harder to determine. All three countries are in unstable political and economic situations right now. However, Bangladeshs unrest has proved to have almost no effect on the textile industry, which is booming. Apparel is Bangladeshs dominant industry, with $20 billion in annual exports, making it the worlds second-largest garment exporter after China. Bangladeshs garment industry accounts for 80% of the countrys exports and is so im-portant to the economy that it is generally spared from the political unrest that often plagues the nation. A big deterrent for JAKE in Bangladesh is the unethical business practices that have been highlighted the past few years. Thousands of citizens have died in fires and other tragic events, but it has not affected the industry enough to spur too much of a change. Though the ethical state of the industry is very poor, the economic status continues to grow year to year.

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The Trade and Investment Cooperation Forum Agreement (TICFA), signed in Washington last year, should pave the way for a more consistent discussion on trade and labor issues after these disasters that highlighted horrifying conditions in Dhakas garment industry. Furthermore, many retailers are working relentlessly to make sure all Bangladesh factories are up to code. The implementation of TICFA agreement is promising for JAKE. It offers a more positive business relationship with Bangladesh in the future. With the MDGs mentioned in the previous section, Bangladesh has a vision for the future that is a positive attribute for JAKE. It shows the country is not looking backwards and wants to reform the country socially and economically. Because of the huge work force a low minimum wage, Bangladesh is an extremely cheap country to manufacture in. We needed to choose a variety of countries to have a diverse portfolio. To balance the higher costs of Taiwan, we chose Bangladesh. The margins we will obtain here will allow us to be profitable across all our accounts. JAKE feels like we are going into Bangladesh at the right time. They are beginning to turn around their labor laws and regulations and we can be a part of the change and begin to build a strong and stable business partnership. The location was not a huge determining factor in our countries. They are all in the same general location and distance but they all have very accessible ports. Because they were essentially equal, it did not have much sway on our final strategy.

sources

When evaluating our manufacturers to be selected we analyzed their abilities, capacity, costs, customer ser vice, customers, flexibility, lead-time, management, quality, services offered, strategic outlook, and sourcing guidelines. From there we evaluated prelim costs vs. initial quotes and product qualities. We evaluated risks v. benefits with between lead-time, quality, capacities, etc. Lastly we looked at our future requirements and the suppliers strategic outlook and value added ser viced to determine if the long-term relationship is viable. The most important factors to JAKE were customers and costs. We know that with good customers, a supplier is trusted. Being fast-fashion, our costs always need to be as competitive as possible.

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We were able to maximize our margins by keeping production costs low and retail prices high and choosing cheap countries to manufacture in. Other ways we reduced costs were through our use of faux leather, being competitive with our component costs, designing the product ourselves, and negotiating payment terms and cost. Vietnam One of the main reasons Vietnam was chosen as a country to begin with is their huge bag-manufacturing base coupled with their amazing customer ser vice. There was not shortage of great companies to work with. The three suppliers were narrowed down mainly based on their customers, their amazing customer ser vices and the type of products they create. Because there is so much competition, the suppliers were eager to do business and were constantly in contact with our company, answering any questions and providing spreadsheets on prices, guidelines and other important information. The deciding factor was the customer list as this says so much about a supplier (such as their values, their capacities, their qualities, etc) Jinjiang Jiaxing Shoes & Garments Co. work with huge companies such as Disney and Wal Mart, companies that have strict sourcing guidelines. We know just based on this that they will be a good fit for us. Wal Mart though having lower prices, has very well made products, and Disneys sourcing guidelines are up there with the best. What also set this company apart from others was their transparency in pricing. This company can create almost any type of hand bag or type of bag product, mostly tote bags and other types of cheaper fashion bags. The factory is large, staff consisting of 1,490 well trained people which shows that the capacity is more than sufficient for our needs. A minimum requirement of 3,000 pieces FOB price with US $1 being the price of a typical backpack, the prices here are unbeatable. The quoted costs for us were about 30% lower than our preliminary costs which was one of the most competitive we have seen.

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This company produces many types of cheaper fashion products and can produce a type of fashion hang bag that is not as fancy with real leather. The lead-time is approximately 30 days once order is placed which is the fastest out of all the manufacturers we researched for any country. They have been approved by many secured authenticity companies as well as third part verifications. They have 6 stars on the global sourcing website for 6 years in a row and have been approved for over 20 years of manufacturing experience. Furthermore, the communication with this manufacturer was extremely welcoming and easy. They make it clear that we are welcome to do business with them. For such as successful company to put so much interest into a start up company shows the integrity and collaborative spirit of the company. It is very important that people want to work with us just as much as we want to work with them. In this case, the relationship is unbeatable. The one place we gave this company lower marks are in strategic outlook. There was not much on vision or growth, which leaves JAKE wondering if there is room for us to grow. However, we feel very strongly that all of the many benefits outweigh any small problems we may have with Jinjiang Jiaxing Shoes & Garments Co. Ltd. Taiwan For Taiwan we chose the supplier, Taiwan Yamani Inc. The most attractive features of this supplier are their strong experience in leather handbags, their huge capacity of 6,000,000 pieces per year This is their strongest commodity and largest capacity, and their top-notch customers. Some downsides to the company are they were not quick to respond which shows customer ser vice might be lacking, and higher costs. With over 7,000 employees, these demands can be met. Their high quality leather products have gained worldwide recognition. Some of their largest customers include Coach, Levenger and Pierre Cardin, who is the leader in licensed products. These high-quality companies are utilizing Yamani because of their high quality and high unit turnaround.

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These company unit sizes and quality should be an example for our backpacks. Also, when the turnaround rate is much quicker for fast fashion products, rather than highquality designer goods, this faster rate might not be normal for Yamani. Roughly about 60 days from purchase order to sent shipment, which is fairly average for a large manufacturer. Yamani is used to large quantities and quick shipments, so this should not be an issue. With such a strong customer base and large employee base, the lead-time should be average, if not faster. They also were able to go about 10% lower than our preliminary costs which was a huge plus for JAKE considering the quality we will be getting. They have a specific design and quality team to provide leather quality testing for cracking, stretching, etc. Technology advancement teams are also services offered for customers to improve and innovate their products. Quality testing another very strong area of their business. Yamani is constantly looking to grow their manufacturing branches and countries to promote their production. Their goal is to establish retail locations by 2016 to ease the distribution process and to strengthen that relationship. With a stronghold in the Asian market, they are looking to penetrate the international market to ser ve more customers. Yamani focuses on the empowerment of their employees to achieve their dreams and goals while working at Yamani, stimulating their potential and awarding them for great work. This was an important feature for JAKE, considering we exist to empower the young woman who wants an education and career. This manufacturer was the most clear and comprehensive when it came to their lead-time, quality, and growth plans. Even though the costs are higher than others and communication is not as quick as it could be, their great quality and long-time experience is just what JAKE is looking for. Bangladesh For Bangladesh our top supplier was US-Bangla Leather Ltd. The most important factors in choosing between the options was ease of communication and customer list. Because very few companies have working websites, communication was key.

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The few websites we found to be working and up to date had little information about the company, especially when it came to sourcing guidelines. In the end, US-Bangla Leather Ltd. rose to the top of our list. We received a call within the day that we first emailed them and had regular conversations every day. They were consistent in following through with all the information we asked for. Not only that, a relationship was quickly built and they invited our buying team to stay in the buyers house at the factory. This invitation proved to us that they can be trusted and are very interested in having us as partners. Another huge factor in why we chose this company was their customer list. With huge names like Samsonite, Zara, and H&M just added to their roster, it is clear that US Bangla is a standout company with a clear vision for their future. They have strong corporate values that align perfectly with JAKE. Our initial costs were met immediately which was not surprising considering Bangladesh is known for their low prices. Some downsides to the company are their lead-time, which they were not very clear on, and low capacities. While they are only producing 50,000 units a month right now, they are a new company. Since they have just acquired these large accounts we can expect them to have the available capacity for JAKE, growing as we go. Plus, because our top manufacturers for our other countries, Vietnam and Taiwan, have such large capacities, we can afford to have a smaller supplier. JAKE sees US Bangla as a strategic partnership. We are both new but have the potential to build huge businesses if our relationship is strong. We do, however, need to be careful when negotiating with them, as their yess do not always mean yes. Being clear and coherent with our communication will be key to getting accurate information and maximizing our margins. All of our top suppliers we chose have a great range of capabilities, from raw materials, to design and product development, to production. As we build our company and relationships we hope to alleviate some of our work and give the power to them. If they continually meet our requirements we can trust them to take on more responsibilities.

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products and placement

Our line is a mix of 5 unique and diverse bags to fit the needs of all our customers. No one bag is produced solely at one supplier to ensure that we mitigate any risk. Each bag is strategically placed within the countries based on their quality, their volumes, and their style. The Bucket Bag is our most high-end looking bag for our older customer and easily transfers from school to night. It is intricate to produce and could be very easily be cheapened if put in a lower-quality manufacturer. We decided to place this bag in Vietnam and Taiwan because of their higher quality customers. The volumes are high, at 130,000 units, so we know these manufacturers can handle the capacity. Furthermore, it is the one bag that is not a typical backpack. Our Taiwan supplier specializes in high end handbags so it is a perfect fit. The drawstring bag is for a younger, sportier, laid-back girl, doesnt mind putting all items inside. A Tom-boy could glam up their wardrobe with this bag. It is the most casual and the least amount of components. Begin the easiest and quickest to make we decided it could go well in Bangladesh. However because there are large volumes, 130,000 we knew it needed to go into another country. We placed the other half in Taiwan. We feel it will be a good fit amongst the Wal Mart and Disney bags they already produce. The Laptop and tablet Bags are for our functional girl on the go who is looking to simplify their wardrobe. These will have the lowest demand because few people have these products. Therefore they have the smallest quantities, 97,500 each. These are split between Bangladesh and Vietnam. We know the young company can handle this smaller capacity as well as simple and quick to make design. Many of their bags are already messenger style for laptops and tablets.

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They have the ability and the quality will be satisfactory. The laptop, tablet, and drawstring bags are the three cheapest so it only makes sense to place them in our two cheapest countries. Lastly is the fold over Bag: our unique take on the classic backpack. We know this bag will be in high demand for the fashionable high school girl with many books and so it makes up the most units. It is also the most complicated to make with the most detailed components. At 195,000 units we decided to place these bags in Taiwan and Vietnam. This is our most important bag so we want it to be total split between Taiwan and Vietnam equally. This will ensure a steady flow of the bag all year round with great, consistent quality. We are confident that we have a strong strategy: Three countries with huge textile industries and stable economies, three suppliers with great clientele and extremely competitive costs, and a placement strategy that mitigates risks and utilizes the key benefits of each supplier.

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based on our country and supplier research and strategy development requirements, our sourcing strategy for jake results in production of our handbags in vietnam, taiwan and bangladesh. each country and selected manufacturer in that country were selected for many reasons and requirements. through our criteria for evaluation and the opportunity to eliminate risk and maximize opportunities,our sourcing strategy takes us internationally to the asian countries of vietnam, taiwan and bangladesh.
#1: VIETNAM Cost and quality

07
SOURCING STRATEGY
-JUSTIFIED BY COUNTRY AND SUPPLIER SELECTION BASED ON EVALUATION AND ANALYSIS

#2: TAIWAN STABILITY AND QUALITY

#3: BANGLADESH low production costs

WHY VIETNAM?
Vietnams textile and garment industry has seen fast and sustainable growth over the past years, playing an important role in national socio-economic development. Demand for labor in the sector is huge. Every year, the sector gives employment for millions of people, generating income for the workers. Export value of textile and garment products in recent years has been ranking number two in the countrys total export revenue, earning a major source of foreign exchange and contributing significantly to Vietnams gross national product and budget. Vietnam has advantages: only small investment capital required; a quick playback period because of short capital turnover; lots of preferential policies from the State because of providing much employment; and large domestic consumption - Vietnam is home to a population of almost 90 million. Related to the latter, there is a vast pool of young, skilled Vietnamese workers more than willing to work for low wages. Vietnams joining the WTO in 2007 provided it tremendous opportunity to develop. Vietnam receives equal treatment and benefits in preferential trade just like other members of WTO; further, it can access world markets conveniently. Right away, the textile and garment sector took strong and stable development steps. Vietnam is a top 10 country in textile and garment exports. Despite the recent global economic downturn, the sector is seeing impressive export performance. Export revenue exceeded US$11 billion in 2010, up 24% against 2009, US$14 billion in 2011, accounting for 16.5% of the countrys total export revenue and up 38% against 2010. Vietnam can be proud of this commendable performance. Consider that its textile industry was the only sector in the country to maintain its overall growth and export earnings compared to the previous year. With more than 50 million workers in Vietnam and a growth rate of 6.5% there are great things for Vietnam and the state of the textile industry. With a growing industry market, the economy can only grow, especially with the influence of Western companies searching for cheaper labor and better quality.

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Because the Vietnamese are a hard working people, (only 4.3% of the population is unemployed, and only 11.3% of the population is under the poverty level,) we can see how this is going to help increase the economic growth of the country, and help to benefit the textile industry by providing more workers. Operating margin squeeze and declining profitability are other key issues facing Vietnamese garment manufacturing. Increased cost of labor in line with the rise of minimum wage in the GDP, can result in declined profitability. There has also been an increase in cost of raw materials, utilities, and the rise of oil prices and taking into consideration inflation. There are also increasing costs of financing due to the increased interest rates brought in by the government to fight inflation and revenue reduction due to the depreciation of the US dollar. According to officials from AGTEK, many Vietnamese garment producers are reconsidering the future potential of their industry. An estimated 50% of members have no plans to expand their operations, while 20% want to slash garment production. Currently 65% of the domestic production of garments is intended for foreign buyers. Realizing that they had missed local opportunities for many years, many Vietnamese garment companies are shifting their focus from conquering export markets to the domestic markets. As mentioned earlier, much of the fabric used in production is imported, and many companies are looking to domestically create fabric instead of having to import all of it. By doing this they feel it would upgrade their manufacturing capacity and target the large domestic market. Although one of the largest contributors in the garment and textile industry, 30% of Vietnams garment producers faces technology often nearly 20 years behind. This requires massive capital investment if domestic textile manufacturers want to become internationally competitive. As you can see, there are many factories located in Vietnam that are suitable to manufacture bags with. Because of the work force is so large, there is opportunity to manufacture our products at many different places. However, our sourcing guidelines are thorough and point out many factors we care about as a company. These rules we want to follow through out the manufacturing process will make finding a match a bit more difficult than preferred.

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WHY TAIWAN?
Taiwan was chosen as our second country primarily due to its stability, as well as the quality of products that are produced. Taiwans business climate is extremely stable and especially focused on the textile and manufacturing industries. Seen as an upand-coming country in relation to other neighboring countries, Taiwan is projected to grow and succeed throughout their technology and manufacturing sectors. This projection of stability and growth provides JAKE with a stronghold in the country and finds a safety net in Vietnam and Bangladesh if for any reason this is not the case. Socially, the country is extremely stable, without any aspect of uprising or further political instability. Their political outlook is strong, with conflicts over the connection and dependence on mainland China. This dependence on mainland China is a positive and negative for JAKE because of the increased investments from the mainland and from the risk of depending so heavily on another economy. These investments, however, have fueled the manufacturing and textile industries and continue to fund growth and innovative in these sectors. For JAKE, this is a benefit. The textile industry is continuing to grow, especially through exports to major countries such as the United States, and is looking more towards technology and innovative materials and processes to speed up production. In order to minimize risk, we placed a majority of our product in Taiwan due to the high quality standards that need to be met for our products and that is found in Taiwanese production. To eliminate a risk of losing most of our product if the economy declines severely or a natural disaster occurs, for example, we separated our product into Vietnam and Bangladesh to compensate. Our more expensive and detailed bags, the Backpack and Bucket bags are produced in Taiwan and require only 97,500 units for the Backpack and 65,000 units for the Bucket bag. Once again, quality standards need to be high for these specific products and Taiwan Yamani can more than handle such a request. An equal amount of these products are also produced in Vietnam due to their lower costs and to also minimize the risk of losing these products if all were produced in Taiwan.

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Manufacturers are ample in Taiwan and provide a wide range of choices for JAKE. Once again, this a benefit and also a safety net in case any chosen manufacturer does not pan out. Taiwan Yamani, Taiwans chosen supplier, is a representation of every requirement JAKE has for production. Their strong company values are expressed in their stable sourcing guidelines and show a sense of honesty, empowerment and growth in their employees and in their company. Communicating with their management was efficient and beneficial, which is something we strive to look for in our suppliers. Costs are generally a bit more expensive in Taiwan, so we were not shocked that their quotes were around our expected costs. For JAKE, however, we are willing to increase cost to get the quality and experience we desire. As such a large and popular supplier with a strong customer base, Taiwan Yamani is also able to handle our volume numbers annually and can handle a fast-fashion companies production schedule. With customers like Coach and Levenger, we knew the quality of their faux leather products would be more than our high standards and a benefit for JAKE. In order to keep our margins around 80%, we negotiated a price that was a few cents cheaper or a few cents higher than our projected cost for the Backpack, Bucket and Drawstring bags. Despite the raise in costs for all styles, our margin percentages still hovered around 80%, which is viable for our business. Taiwan is a viable country to source our more high quality, unique bags in due to its growing and stable nature. Despite a bit higher production costs than Vietnam and Bangladesh, quality makes up for it and money is saved through lower costs in those countries. The social, political and economic stability is attractive for JAKE, in relation to manufacturing businesses and production. Taiwan is a viable option for JAKE and will provide many opportunities for our handbag business. Overall, the benefits of manufacturing in Taiwan outweighed the risks, making it a beneficial country for production for JAKE Handbags.

Bangladesh has made great progress in the last decade in becoming more of a market economy and has been remarkably resilient during the global recession. Some grown attractions are its large and growing population looking for work, steady GDP growth, and a strong demand for foreign capital to meet the countrys large infrastructure and energy needs.

WHY bangladesh?

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However, like most developing countries, Bangladesh can be a risky place to do business, many issues plaguing its economy. The country remains one the poorest in Asia- below the regional average for per capita income, growth, and creditworthiness (ranked 122 out of 183 countries according to EFIC). The politics in Bangladesh have been characterized by friction between the two dominant parties (AL and BNP)- the recent 2014 election was accompanied by strong tensions and boycotts. The business environment features inadequate infrastructure, corruption from the bottom to the federal level, arbitrary regulation, and poor contract enforceability which has led to the many tragedies we have seen in factories the last few years. As the country is growing economically and socially, we are seeing a rapid increase in production, especially in the textiles and apparel industries. If Bangladesh can begin meeting higher labor standards and more sophisticated business practices it has the potential great to be a source for JAKE Handbags. We believe the benefits outweigh the risks in doing business with Bangladesh. The main factors for why we chose Bangladesh over Thailand and Cambodia are as follows: Strengths & Benefits -Competitive garment manufacturing sector due to low cost workforce so it will be extremely profitable and cost effective. -Favorable demographics: 45% of Bangladeshis are aged under 15 -Ports are very accessible -Economy has shown positive growth over the past decade. -The textile industry is rarely affected by any political or economic problems. Though the country is not extremely stable, the textile industry is. -Bangladesh is the second largest importer of ready-made garments into the US. The relationship that was tainted due to labor tragedies has been strengthened with TICFA. The future between Bangladesh and America seems positive. -US-Bangla Leather Ltd. has proven to be a trusted manufacturer. Communication is extremely swift and pleasant. They met the target costs we have given them over the phone.

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-We are able to maximize margins by producing with US-Bangla- confirmed over the phone that prices will be cheaper the more we do business with them. -8 MDGS prove Bangladesh is look ahead which is positive for us as a start-up company. Weaknesses & Risks - Very low per capita income - Poor regulation enforcement - Lack of infrastructure and internet presence could make business difficult - Recurrent natural disasters (cyclones, serious floods) which result in major damages and the loss of har vests. - Culture barriers -language, views of women - US-Bangla Leather Ltd. has low capacity as of right now. Bangladesh just held elections in January 2014- The Awami League has won the general election which was violent- 18 people died during the vote and another three the next day. The elections were marred by wide-spread violence, boycotts, and general strikes. The government has taken a harder line on Islamist extremist terrorist groups which have been a continual problem through Bangladeshs history. Even though this unrest is quite common, most political factors have little to zero affect on the textile industry in Bangladesh. JAKE will keep a close watch on the political conditions, however, for business today it is not a vital concern. Despite political instability, poor infrastructure, corruption, insufficient power supplies, and slow implementation of economic reforms, Bangladeshs economy has seen a growth of 5.8% a year since 1996. Bangladesh is considered a Least Developed Country (LDC) but has been striving very hard to rise to Middle Income Country (MIC) status. Significant progress has been made in terms of income growth (per capita income rising by 56% from US$438 in 2005 to US$685 in 2009/10) and has already achieved some of the key MDG (Millennium Development Goals) targets and will likely meet the remaining targets by 2015.

If the GDP can continue to grow and be maintained a 7% or more, the country may achieve MIC status within the current decade. The MDG targets are very important to JAKE. They are goals that Bangladesh has set for itself to meet by 2015. The goals are as follows:

If these goals are met by 2015, Bangladesh is even more of an attractive country to JAKE to source in. As we are looking to grow our business, we are looking for partners who can grow with us. These goals will also help JAKE with our sourcing guidelines. If the government is able to accomplish these, JAKE can give more trust to the suppliers to conduct their business in an ethical manner so we will not have to engage in constant factory checks.The economy has continued to move and has been hardly affected by the recent crisis in global economies. In the face of a global financial meltdown, the country has still been able to post an annual average GDP growth rate of over 6% since 2008. Though the countrys overall performance is strengthening, poverty is still a major issue in Bangladesh. Today 2.5% of the population is living on one dollar a day, 26% living on 2 dollars a day, and 82.8% living beneath the poverty level. An estimated 10% to 15% of the population faces serious nutritional risk. It is important for JAKE to source in a country that shows continual positive growth, which Bangladesh has, as opposed to Thailand and Cambodia. As a company we hope to help combat poverty by being a positive influence in the country.

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Labor Bangladeshs labor practices have been in the spotlight for the last few years and have undergone much scrutiny from citizens and countries around the globe who trade with them. The government has insufficient capacity to properly enforce their labor laws, with just 55 inspectors cov-ering a registered 24,229 factories (about 5,500 apparel). Furthermore, the courts do not have sufficient capacity to process the caseloads regarding labor laws in a timely manner. However, on June 27, 2013, suspended Bangladeshs designation as a beneficiary country under the Generalized System of Preferences (GSP) program, because Bangladeshs did not to take appropriate steps to adopt internationally recognized workers rights. This decision came after several years of review by the USTR. Hoping to reinforce a relationship damaged by the tragic collapse of Rana Plaza garment factory that killed 1,135, 2013 Bangladesh and the United States signed a trade agreement in November later that year. The Trade and Investment Cooperation Forum Agreement (TICFA), signed in Washington, should pave the way for a more consistent discussion on trade and labor issues after these disasters that highlighted horrifying conditions in Dhakas garment industry. Trade between the countries totaled $5.4 billion in 2012, according to the Office of the USTR. The US banned duty-free trade access to some Bangladeshi products after the collapse. The countries are hoping this new agreement will create a stronger engagement between them and settle some trade issue such as duty-free and quota-free access to Bangladeshi exports. The implementation of the agreement is promising for JAKE. It offers a more positive business relationship with Bangladesh in the future. JAKE feels like we are going into Bangladesh at the right time. They are beginning to turn around their labor laws and regulations and we can be a part of the change. Manufacturer- US Bangla Leather Ltd. US-Bangla Leather products Ltd. is an emerging 100% export oriented leather goods manufacturer in Bangladesh. It is a joint venture initiative between United States and Bangladesh.

It is also a part of the larger US-Bangla Group in the process of Group business diversification. They intend to provide a variety of leather bags and leather goods & services precisely developed to the meet the needs of each client. They prioritize product development and design, merchandising follow-up, quality control and Just In Time (JIT) delivery. Their commitment towards the satisfaction of their customers needs is the top priority. This is made evident through their prompt responses and readiness to meet every need of JAKE Handbags. The team is dedicated to ensuring quality products and ser vices to their clients. US-Bangla believes in providing a better value for the money, consistently striving for technological advancement and research so as to ensure quality product. The factory itself has many services such as a day care center, health care center, canteen, prayer room, and buyers guest house which JAKE Handbag employees has been invited to visit. Their customers include Japanese companies like Kitamura, Shimokawa, Top Run, Police, A style, etc. They have just started development with H&M, Zara, Samsonite, Youngone etc. With diverse and trusted customers such as this, it shows the company is growing and can meet our needs in capacity and sourcing guidelines. US-Bangla produces 50,000 products a month but is quickly increasing with the new customer base. They also have a vision for the future of the company- To be one of the best leather goods manufacturing industry in the world by 2020 and be the company that our customers, shareholders and the society want. This shows that as JAKE grows, US Bangla can grow with us.During our talks with the manufacturer, they confirmed over the phone that our target costs can be met. When started with a target cost 10% lower that our actual costs. The fact that no negotiation was required for a cheaper price than what we were hoping is extremely positive. We believe that we can further maximize our margins if we feel like more negotiation is necessary. The company obviously wants to make us happy. Our contact confirmed that the longer we do business the more streamlined the process will get and the cheaper the products will be. As a company we are very focused on building strong relationships in business and we believe that by building one with US-Bangla while we are both young will be the start of a great partnership.

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a n i f

la p l

ce

nt e m

Our placement strategy is based on jake as a fashion company that produces 650,000 units annually, usually within two different seasons- fall/winter and spring/summer. keeping our margin requirement of around 80%, we were able to successfully place our products to eliminate any risks,keeping in mind our company requirements.

As our highest ranking country, Vietnam receives the most production units with 260,000 units annually. Because the customers of Jinjiang Jiaxing have customers like Walmart and Disney, the quality can lack, but they are able to handle large units and shipments. Therefore, keeping its strong country ranking and stability in mind, we placed four of our styles in Vietnam and kept the Drawstring out because of its necessity of high quality. Pairing with Taiwan, JAKE split production units of the Backpack because of its detailed components and longer time to make. Taiwan can handle the quality and Vietnam is able to handle its volume and production. This same idea applies to the Bucket bag, which requires less components and less time to produce, but still requires high quality production as it is our signature, unique bag. 65,000 units are split between Vietnam and Taiwan for this reason. Splitting units also eliminates any risks present. The Laptop and Tablet bags are our simpliest products to make, whose production units are split with Bangladesh. These products can be sacrificed in quality, in comparison to the Bucket and Backpack, so will not be placed in Taiwan, but in Vietnam and Bangladesh.

JAKE Handbags
FINAL PLACEMENT AND MARGINS 2.28.14

Vietnam - Jinjiang Jiaxing

Backpack Tablet Laptop Bucket

Taiwan - Taiwan Y
Backpack

Total Units Wholesale Cost per Unit Margin $ Margin % Total Wholesale Total Purchase Total Margin $ Avg Wholesale Avg Purchase Avg Margins $ Avg Margins % Avg Cost/Unit $ $ $ $ $ $

650,000 $ $ $ 22,100,000 3,728,888 $18,371,113 34.00 5.74 28.26 83.13% 28.26 $ $ $

97,500 50.00 $ 6.85 $ 43.15 $ 86.30% 4,875,000.00 667,875.00 4,207,125.00 $ $ $

48,750 25.00 $ 5.00 $ 20.00 $ 80.00% 1,218,750.00 243,750.00 975,000.00 $ $ $

48,750 35.00 $ 6.15 $ 28.85 $ 82.43% 1,706,250.00 299,812.50 1,406,437.50 $ $ $

65,000 30.00 $ 6.96 $ 23.04 $ 76.80% 1,950,000.00 452,400.00 1,497,600.00 $ $ $

97,500

50.00 $ 6.94 $ 43.06 $ 86.12% 4,875,000.00 676,650.00 4,198,350.00

$ $ $

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Taiwan is known for high quality production, but at a bit higher production cost. For this reason, we placed our more higher priced bags in Taiwan and also styles that required a high quality production. In order to eliminate any risk, the Backpack and Bucket bag units are split with Vietnam, a stable and highly ranked country. Taiwan Yamani is more than able to handle this large amount of units, but will not sacrifice on quality. This same concept applies to the Bucket and Drawstring bags. The Bucket bag is split with Vietnam to ensure that stability of production. The Drawstring splits 65,000 units with Bangladesh because it requires high quality production, but is the simpliest and quickest to produce. JAKE placed styles specifically in countries so there was a mix between time of production and quality standards. Overall, Taiwan Yamani will produce 227,500 units annually, second to Vietnam.

Bangladesh is known for having very low production costs and we wanted to stress that by placing our simpliest and quickest products in this country. US Bangla Leather shows strong signs of growing and has recently picked up customers such as Zara and H&M. Because of these signs, we know this manufacturer will be stable and more than able to accommodate our production volumes. 162,500 units are produced annually. In order to minimize risk, JAKE split the Laptop and Tablet bag units between Vietnam and Bangladesh at 48,740 units annually. US Bangla Leather is not necessarily known for producing high quality products, so our less intricate and quicker producing products are placed in Bangladesh. The Drawstring bag is also split between Taiwan at 65,000 units each annually for the same reasoning; in addition to eliminating risk, this style is our quickest and simpliest bag to produce. Despite the lack of production units, in relation, Bangladesh is perfect for the production of our simplier and quicker bags to manufacture.
Taiwan - Taiwan Yamani Inc.
Bucket Backpack Bucket Drawstring

Bangladesh- US Bangla Leather

Tablet Laptop Drawstring

65,000 $ $ $ $ $ $ 30.00 $ 6.96 $ 23.04 $ 76.80% 1,950,000.00 452,400.00 1,497,600.00 $ $ $

97,500 50.00 $ 6.94 $ 43.06 $ 86.12% 4,875,000.00 676,650.00 4,198,350.00 $ $ $

65,000 40.00 $ 7.05 $ 32.95 $ 82.38% 2,600,000.00 458,250.00 2,141,750.00 $ $ $

65,000 30.00 $ 5.91 $ 24.09 $ 80.30% 1,950,000.00 384,150.00 1,565,850.00 $ $ $

48,750 25.00 $ 4.87 $ 20.13 $ 80.52% 1,218,750.00 237,412.50 981,337.50 $ $ $

48,750 35.00 $ 6.33 $ 28.67 $ 81.91% 1,706,250.00 308,587.50 1,397,662.50 $ $ $

65,000 35.00 5.91 29.09 83.11% 2,275,000.00 384,150.00 1,890,850.00

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INITIAL VS PRELIMINARY VS FINAL COSTS

JAKE Handbags Margin Comparisons

INITIAL COST | QUOTED COST | FINAL COST
VIETNAM Retail Price $ $ $ $ $ 50.00 25.00 35.00 40.00 35.00 $ $ $ $ INITIAL Margin Cost % 6.85 5.00 6.15 6.96 86% 80% 82% 83% QUOTED Margin Cost % $ $ $ $ 4.00 3.40 3.60 4.10 92% 86% 90% 90% $ $ $ $ FINAL Margin Cost % 6.85 5.00 6.15 6.96 INITIAL Margin Cost % 86%

Style Name Style # Foldover Tablet Laptop Bucket Drawstring Average OO1 OO2 OO3 OO4 OO5

86% $ 6.94 80% 82% 83% $ 7.05 $ 6.10 83% $ 7.80

82% 83% 84%

$ 6.24

83% $ 3.78

89% $ 7.13

foldover Bag
wholesale: $50

For Taiwan, we estimated a cost of $6.94 with an 86% margin. We were able to find quotes as low as $6.53 (87% margin) within Taiwan for this style. Based on the high quality and ser vices provided by the manufacturer in Taiwan, we agreed upon a higher cost of $7.80 with an 84% margin. The estimate for producing the foldover bag in Vietnam was $6.85 with an 85% margin. We were able to find quotes as low as $4.00 with an impressive 92% margin. We were only able to keep with the initial estimate, as

08

the final agreement was upon $6.85.

tablet Bag
wholesale: $25

In Vietnam, we estimated a margin of 80% with a $5.00 cost. Quotes within the country provided a possibility of $3.40 at 86%. After the negotiation and meeting, we agreed upon the initial cost of $5.00 at 80%. Our initial Bangladesh estimate was a $4.87 cost at 81%. That was the quoted cost, as well, as the manufacturer promised to produce at or under our estimated cost. Our final agreement was still an 81% margin at a slightly lower price of $4.63.

COMPARISON OF FINAL COSTING

-COMPARE PRELIMINARY COSTING VS. FINAL NEGOTIATED PRICES -COMPARE PRELIMINARY MARGINS VS. ACHIEVED MARGINS

TAIWAN FINAL Margin Cost % $ $ $ $ 6.85 5.00 6.15 6.96 INITIAL Margin Cost % QUOTED Cost Margin% FINAL Margin Cost % 84% $ 4.87 $ 6.33 82% $ 6.64 83% $ 5.74 84% $ 6.30 83% $ 7.05 84% $ 6.77 85% $ 7.21 82% 81% $ 5.91 82% $ 5.70 INITIAL Margin Cost %

BANGLADESH QUOTED Margin Cost % FINAL Margin Cost % 81% 83% 84% 83%

% % % %

86% $ 6.94 80% 82% 83% $ 7.05 $ 6.10 83% $ 7.80

86% $ 6.53

87% $ 7.80

81% $ 4.87 82% $ 6.33 83% $ 5.91 82% $ 5.70

81% $ 4.63 82% $ 6.01 83% $ 5.61 82% $ 5.42

% $ 7.13

laptop Bag
wholesale: $35

In Vietnam, we estimated a margin of 82% at a cost of $6.15. Quotes within the country provided a possibility of $3.60 at 90%. After the negotiation and meeting, we agreed upon the initial cost of $6.15 at 82%. Our initial Bangladesh estimate and quote were a $6.33 cost at 82%, as the manufacturer promised to produce at or under our estimated cost. Our final agreement was an 83% margin at a lower price of $6.01.

Bucket Bag
wholesale: $40

In Taiwan, our preliminary costing reflected a $7.05 cost with an 82% margin. The lowest quote we could gather in Taiwan was $6.64 with an 83% margin. The final agreement was $7.05, our original estimate. Our preliminary costing in Vietnam began at $6.96 with an 83% margin. We were provided quotes within Vietnam of a 90% margin at a cost of just $4.10. However, we also agreed upon our initial estimate in this location as well, with a $6.96 cost and 83% margin.

drawstring Bag In Taiwan, we estimated a margin of 83% and a cost of $6.10.

wholesale: $35
negotiations, we agreed upon the initial cost of $6.77 at 81%.

For

this bag, this country provided a possibility of $5.74 at 84%. After

Our initial Bangladesh estimate and quote were a $5.91 cost at 83%, as the manufacturer promised to produce at or under our estimated cost. Our final agreement was an 84% margin at a lower price of $5.61.

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09
98

CONCLUSION

We eliminated Cambodia and Thailand during this process. They presented too threatening of risks that seemed extremely difficult or impossible to mitigate. Unstable pricing, restricted size of the industry, and political turmoil are among the most important factors that drew us away from Cambodia and Thailand. We are very pleased with our chosen manufacturers and the negotiations that have been set in place. We will benefit from utilizing our manufactures in Bangladesh, Taiwan and Vietnam for many reasons. First, the prices are lower than that of manufacturing pricing in the United States. Secondly, we established creativity protection during meetings. This means that our manufacturers will protect our creative privacy and ensure that our products will be properly and legally distributed. Our products are all placed in at least two different countries, limiting risk for our production. If something falls through with one manufacturer, we will always have another upon to which depend. The manufacturers will benefit from our partnership, as well. All of our manufacturers work with reputable, large companies. They are looking to expand their portfolio. As a start-up with much promise (Urban Outfitters deal), our company is very attractive to these manufacturers. It is a chance for them to become associated with our company before we find great success; to nip it in the bud, as they say. As we grow, the manufacturer has a chance to grow alongside JAKE. Our higher quality items are placed within Taiwan, as that manufacturer produces high-quality bags for other brands. Vietnam has a little bit lower of quality standards; however they are still very high in comparison to the market. They are more about mass production, high capacity and quick lead times. Bangladesh will focus on our easier bags, as they have the smallest capacities at the time being.

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cost sheets
ALPHABETICAL ORDER by country: BANGLADESH, CAMBODIA, TAIWAN, THAILAND, VIETNAM

APPENDIX & BIBLIOGRAPHY -COST SHEETS -TECH PACKS -SOURCING GUIDELINES -MANUFACTURER EMAILS -BIBLIOGRAPHY

10

JAKE Handbags
COST SHEET - Bangladesh
2.26.14 Style # Style Name Season 1 Foldover Bag Fall/Winter 2014 Faux Leather foldover backpack with buttoned front pocket and buckled foldover, Description black faux leather handle and adjustable straps. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Buckles Grommets Adjustable Buckle Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

fol

dov

er

ba

1.97 0.46 2.43

$/unit
1 2 6 2 1 1

Quantity** $Total

$ $ $ $ $ $ $

0.03 0.05 0.04 0.10 0.001 0.10 0.01

1.01 $ 2.02 $ 6.06 $ 2.02 200 1.01 1.01 $ $ $ $ $

0.03 0.10 0.24 0.20 0.25 0.10 0.01 0.94

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.050 $ 1.250 $ 0.500 $ 1.94 $Total $ 25% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.18 1.42 0.02 0.02 1.64

$ 7.13

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JAKE Handbags
COST SHEET - Cambodia
2.26.14 Style # Style Name Season 1 Foldover Bag Fall/Winter 2014 Faux Leather foldover backpack with buttoned front pocket and buckled foldover, Description black faux leather handle and adjustable straps. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Buckles Grommets Adjustable Buckle Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

$/unit
1 2 6 2 1 1

Quantity** $Total

$ $ $ $ $ $ $

0.03 0.05 0.04 0.10 0.001 0.10 0.01

1.01 $ 2.02 $ 6.06 $ 2.02 200 1.01 1.01 $ $ $ $ $

0.03 0.10 0.24 0.20 0.25 0.10 0.01 0.94

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.056 $ 1.400 $ 0.500 $ 2.09 $Total $ 16% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.15 1.45 0.02 0.02 1.64

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GRAND TOTAL

$ 7.28

JAKE Handbags
COST SHEET - Taiwan
2.26.14 Style # Style Name Season 1 Foldover Bag Fall/Winter 2014 Faux Leather foldover backpack with buttoned front pocket and buckled foldover, Description black faux leather handle and adjustable straps. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Buckles Grommets Thread Adjustable Buckle JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

$/unit
1 2 6

Quantity** $Total

$ $ $ $ $ $ $

0.03 0.05 0.04 0.001 0.10 0.10 0.01

1.01 2.02 6.06 200

$ $ $ $

0.03 0.10 0.24 0.25 0.20 0.10 0.01 0.94

2 1 1

2.02 $ 1.01 $ 1.01 $ $

1 1

$/unit $ $

0.05 0.08

Quantity $Total 1.01 $ 0.05 1.01 $ 0.08 $ 0.13 $Total $ $ $ $

$/unit 2.28 0.03 0.06

Quantity 40 40 40

0.06 0.00 0.00 0.06

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.057 $ 1.425 $ 0.500 $ 2.11 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.23 1.01 0.02 0.02 1.28

$ 6.94

103

JAKE Handbags
COST SHEET - Thailand
2.26.14 Style # Style Name Season 1 Foldover Bag Fall/Winter 2014 Faux Leather foldover backpack with buttoned front pocket and buckled foldover, Description black faux leather handle and adjustable straps. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Buckles Grommets Adjustable Buckle Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

$/unit
1 2 6 2 1 1

Quantity** $Total

$ $ $ $ $ $ $

0.03 0.05 0.04 0.10 0.001 0.10 0.01

1.01 $ 2.02 $ 6.06 $ 2.02 200 1.01 1.01 $ $ $ $ $

0.03 0.10 0.24 0.20 0.25 0.10 0.01 0.93

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.057 $ 1.425 $ 0.500 $ 2.11 $Total $ 20% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.13 1.16 0.02 0.02 1.33

104

GRAND TOTAL

$ 6.98

JAKE Handbags
COST SHEET - Vietnam
2.26.14 Style # Style Name Season Description 1 Foldover Bag Fall/Winter 2014 Faux Leather foldover backpack with buttoned front pocket and buckled foldover, black faux leather handle and adjustable straps. $/yard* Yield** Total $ 1.95 $ 1.01 $ $ 0.60 $ 0.76 $ $ $/unit
1 2 6

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Magnetic Snaps Buckles Grommets Thread Adjustable Buckle JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

Quantity** $Total

$ $ $ $ $ $ $

0.03 0.05 0.04 0.001 0.10 0.10 0.01

1.01 2.02 6.06 200

$ $ $ $

0.03 0.10 0.24 0.25 0.20 0.10 0.01 0.93

2 1 1

2.02 $ 1.01 $ 1.01 $ $

1 1

$/unit $ $

Quantity $Total 0.05 1.01 $ 0.05 0.08 1.01 $ 0.08 $ 0.13 $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

Quantity 40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.056 $ 1.400 $ 0.500 $ 2.09 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.17 1.01 0.02 0.02 1.22

$ 6.85

105

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JAKE Handbags
COST SHEET - Bangladesh
2.26.14 Style # Style Name Season 2 Tablet Bag Fall/Winter 2014 Gold PU Leather mini backpack for tablets. Black plastic chain to extend the straps of Description the bag, black plastic rings used for attachments, & magnetic closure. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 0.51 $ Suede Lining $ 0.60 $ 0.50 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Chains Grommets Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

0.98 0.30 1.28

$/unit
1 2 5 1 1

Quantity** $Total

$ $ $ $ $ $

0.03 0.09 0.04 0.001 0.10 0.01

1.01 2.02 5.05 200 1.01 1.01

$ $ $ $ $ $ $

0.03 0.18 0.20 0.25 0.10 0.01 0.78

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.050 $ 0.750 $ 0.500 $ 1.44 $Total $ 25% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.18 0.97 0.02 0.02 1.19

106

GRAND TOTAL

$ 4.87

JAKE Handbags
COST SHEET - Cambodia
2.26.14 Style # Style Name Season 2 Tablet Bag Fall/Winter 2014 Gold PU Leather mini backpack for tablets. Black plastic chain to extend the straps of Description the bag, black plastic rings used for attachments, & magnetic closure. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 0.51 $ Suede Lining $ 0.60 $ 0.50 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Chains Grommets Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

0.99 0.30 1.29

$/unit
1 2 5 1 1

Quantity** $Total

$ $ $ $ $ $

0.03 0.09 0.04 0.001 0.10 0.01

1.01 2.02 5.05 200 1.01 1.01

$ $ $ $ $ $ $

0.03 0.18 0.20 0.25 0.10 0.01 0.78

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.056 $ 0.840 $ 0.500 $ 1.53 $Total $ 16% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.15 0.99 0.02 0.02 1.18

$ 4.96

107

JAKE Handbags
COST SHEET - Taiwan
2.26.14 Style # Style Name Season 2 Tablet Bag Fall/Winter 2014 Gold PU Leather mini backpack for tablets. Black plastic chain to extend the straps of Description the bag, black plastic rings used for attachments, & magnetic closure. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 0.51 $ Suede Lining $ 0.60 $ 0.50 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Chains Grommets Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

0.98 0.30 1.28

$/unit
1 2 5 1 1

Quantity** $Total

$ $ $ $ $ $

0.03 0.09 0.04 0.001 0.10 0.01

1.01 2.02 5.05 200 1.01 1.01

$ $ $ $ $ $ $

0.030 0.182 0.202 0.252 0.10 0.01 0.78

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.057 $ 0.855 $ 0.500 $ 1.54 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.23 1.01 0.02 0.02 1.28

108

GRAND TOTAL

$ 5.07

JAKE Handbags
COST SHEET - Thailand
2.26.14 Style # Style Name Season 2 Tablet Bag Fall/Winter 2014 Gold PU Leather mini backpack for tablets. Black plastic chain to extend the straps of Description the bag, black plastic rings used for attachments, & magnetic closure. Faux Leather bucket bag with silver exterior and $/yard* a royal blue interior Yield** Total Faux Leather $ 1.95 $ 0.51 $ Suede Lining $ 0.60 $ 0.50 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Chains Grommets Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

0.99 0.30 1.29

$/unit
1 2 5 1 1

Quantity** $Total

$ $ $ $ $ $

0.03 0.09 0.04 0.001 0.10 0.01

1.01 2.02 5.05 200 1.01 1.01

$ $ $ $ $ $ $

0.030 0.182 0.202 0.252 0.10 0.01 0.78

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.057 $ 0.855 $ 0.500 $ 1.54 $Total $ 20% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.13 0.79 0.02 0.02 0.96

$ 4.76

109

JAKE Handbags
COST SHEET - Vietnam
2.26.14 Style # Style Name Season 2 Tablet Bag Fall/Winter 2014 Gold PU Leather mini backpack for tablets. Black plastic chain to extend the straps of Description the bag, black plastic rings used for attachments, & magnetic closure. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 0.51 $ Suede Lining $ 0.60 $ 0.50 $ TOTAL FABRIC COST $ COMPONENTS Magnetic Snaps Chains Grommets Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

0.99 0.30 1.29

$/unit
1 2 5 1 1

Quantity** $Total

$ $ $ $ $ $

0.03 0.09 0.04 0.001 0.10 0.01

1.01 2.02 5.05 200 1.01 1.01

$ $ $ $ $ $ $

0.03 0.18 0.20 0.25 0.10 0.01 0.78

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.056 $ 0.840 $ 0.500 $ 1.53 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.17 1.01 0.02 0.02 1.22

110

GRAND TOTAL

$ 5.00

JAKE Handbags
COST SHEET - Bangladesh
2.26.14 Style # Style Name Season Description 3 Laptop Bag Fall/Winter 2014 Faux Leather, Foldover, Backpack with buckled front, bronze faux leather, chain and faux leather straps $/yard* Yield** Total $ 1.95 $ 0.91 $ $ 0.60 $ 0.71 $ $
Quantity** $/unit $ 0.03 1.01 $ 0.09 2.02 $ 0.04 5.05 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01

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FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Buckle Chains Grommets Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.77 0.43 2.20

1 2 5 1 1

$Total $ $ $ $ $ $ $

0.03 0.18 0.20 0.25 0.10 0.01 0.78

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 20 $0.050 $ 1.000 $ 0.500 $ 1.69 $Total $ 25% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.18 1.26 0.02 0.02 1.48

$ 6.33

111

JAKE Handbags
COST SHEET - Cambodia
2.26.14 Style # Style Name Season Description 3 Laptop Bag Fall/Winter 2014 Faux Leather, Foldover, Backpack with buckled front, bronze faux leather, chain and faux leather straps. $/yard* Yield** Total $ 1.95 $ 0.91 $ $ 0.60 $ 0.71 $ $
Quantity** $/unit $ 0.09 2.02 $ 0.05 1.01 $ 0.04 4.04 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Chains Buckles Grommets Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.77 0.43 2.20

2 1 4 1 1

$Total $ $ $ $ $ $ $

0.18 0.05 0.16 0.25 0.10 0.01 0.76

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 20 $0.056 $ 1.120 $ 0.500 $ 1.81 $Total $ 16% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.15 1.28 0.02 0.02 1.47

112

GRAND TOTAL

$ 6.42

JAKE Handbags
COST SHEET - Taiwan
2.26.14 Style # Style Name Season Description 3 Laptop Bag Fall/Winter 2014 Faux Leather, Foldover, Backpack with buckled front, bronze faux leather, chain and faux leather straps $/yard* Yield** Total $ 1.95 $ 0.91 $ $ 0.60 $ 0.71 $ $ $/unit Quantity** $ 0.03 1.01 $ 0.04 4.04 $ 0.001 200 $ 0.09 2.02 $ 0.10 1.01 $ 0.01 1.01 $Total $ $ $ $ $ $ $ 1.77 0.43 2.20

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Buckle Grommets Thread Chains JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1 4 2 1 1

0.03 0.16 0.25 0.18 0.10 0.01 0.74

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 20 $0.057 $ 1.140 $ 0.500 $ 1.83 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.23 1.30 0.02 0.02 1.57

$ 6.52

113

JAKE Handbags
COST SHEET - Thailand
2.26.14 Style # Style Name Season Description 3 Laptop Bag Fall/Winter 2014 Faux Leather, Foldover, Backpack with buckled front, bronze faux leather, chain and faux leather straps. $/yard* Yield** Total $ 1.95 $ 0.91 $ $ 0.60 $ 0.71 $ $
Quantity** $/unit $ 0.03 1.01 $ 0.04 4.04 $ 0.09 2.02 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Buckle Grommets Chains Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.77 0.43 2.20

1 4 2 1 1

$Total $ $ $ $ $ $ $

0.03 0.16 0.18 0.25 0.10 0.01 0.73

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 20 $0.057 $ 1.140 $ 0.500 $ 1.83 $Total $ 20% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.13 1.02 0.02 0.02 1.19

114

GRAND TOTAL

$ 6.13

JAKE Handbags
COST SHEET - Vietnam
2.26.14 Style # Style Name Season Description 3 Laptop Bag Fall/Winter 2014 Faux Leather, Foldover, Backpack with buckled front, bronze faux leather, chain and faux leather straps $/yard* Yield** Total $ 1.95 $ 0.91 $ $ 0.60 $ 0.71 $ $ $/unit Quantity** $ 0.03 1.01 $ 0.04 4.04 $ 0.09 2.02 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01 1.77 0.43 2.20

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Buckle Grommets Chains Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1 4 2 1 1

$Total $ 0.03 $ 0.16 $ 0.18 $ 0.25 $ 0.10 $ 0.01 $ 0.733

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 20 $0.056 $ 1.120 $ 0.500 $ 1.81 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.17 1.01 0.02 0.02 1.22

$ 6.15

115

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JAKE Handbags
COST SHEET - Bangladesh
2.26.14 Style # Style Name Season Description 4 Bucket Bag Fall/Winter 2014 Faux leather bucket bag with royal blue interior and silver exterior $/yard* Yield** Total $ 1.95 $ 1.01 $ $ 0.60 $ 0.76 $ $ $/unit Quantity** $ 0.05 2.02 $ 0.05 2.02 $ 0.04 12.12 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01 $Total $ $ $ $ $ $ $

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Drawstring Buckles Grommets Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

2 2 12 1 1

0.10 0.10 0.48 0.25 0.10 0.01 1.05

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.050 $ 1.250 $ 0.500 $ 1.94 $Total $ 25% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.18 1.45 0.02 0.02 1.67

116

GRAND TOTAL

$ 7.27

JAKE Handbags
COST SHEET - Cambodia
2.26.14 Style # Style Name Season Description 4 Bucket Bag Fall/Winter 2014 Faux Leather bucket bag with silver exterior and a royal blue interior $/yard* Yield** Total $ 1.95 $ 1.01 $ $ 0.60 $ 0.76 $ $
Quantity** $/unit $ 0.05 2.02 $ 0.04 12.12 $ 0.05 2.02 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Drawstring Grommets Buckle Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

2 12 2 1 1

$Total $ $ $ $ $ $ $

0.10 0.48 0.10 0.25 0.10 0.01 1.04

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.056 $ 1.400 $ 0.500 $ 2.09 $Total $ 16% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.15 1.48 0.02 0.02 1.67

$ 7.41

117

JAKE Handbags
COST SHEET - Taiwan
2.26.14 Style # Style Name Season Description 4 Bucket Bag Fall/Winter 2014 Faux Leather bucket bag with silver exterior and a royal blue interior $/yard* Yield** Total $ 1.95 $ 1.01 $ $ 0.60 $ 0.76 $ $
Quantity** $/unit $ 0.05 2.02 $ 0.04 12.12 $ 0.05 2.02 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Drawstring Grommets Buckle Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

2 12 2 1 1

$Total $ $ $ $ $ $ $

0.10 0.48 0.10 0.25 0.10 0.01 1.04

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.057 $ 1.425 $ 0.500 $ 2.11 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.23 1.01 0.02 0.02 1.28

118

GRAND TOTAL

$ 7.05

JAKE Handbags
COST SHEET - Thailand
2.26.14 Style # Style Name Season 4 Bucket Bag Fall/Winter 2014 Faux Leather foldover backpack with buttoned front pocket and buckled foldover, Description black faux leather handle and adjustable straps. Faux Leather bucket bag with silver exterior and $/yard* a royal blue interior Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Drawstring Grommets Buckle Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

2 12 2 1 1

Quantity** $/unit $ 0.05 2.02 $ 0.04 12.12 $ 0.05 2.02 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01

$Total $ $ $ $ $ $ $

0.10 0.48 0.10 0.25 0.10 0.01 1.04

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.057 $ 1.425 $ 0.500 $ 2.11 $Total $ 20% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.13 1.18 0.02 0.02 1.35

$ 7.12

119

JAKE Handbags
COST SHEET - Vietnam
2.26.14 Style # Style Name Season Description 4 Bucket Bag Fall/Winter 2014 Faux Leather bucket bag with silver exterior and a royal blue interior $/yard* Yield** Total $ 1.95 $ 1.01 $ $ 0.60 $ 0.76 $ $ $/unit Quantity** $ 0.05 2.02 $ 0.04 12.12 $ 0.05 2.02 $ 0.001 200 $ 0.10 1.01 $ 0.01 1.01 $Total $ $ $ $ $ $ $

FABRICS Faux Leather Suede Lining TOTAL FABRIC COST COMPONENTS Drawstring Grommets Buckle Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

2 12 2 1 1

0.10 0.48 0.10 0.25 0.10 0.01 1.04

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 25 $0.056 $ 1.400 $ 0.500 $ 2.09 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.17 1.01 0.02 0.02 1.22

120

GRAND TOTAL

$ 6.96

JAKE Handbags
COST SHEET - Bangladesh
2.26.14 Style # Style Name Season 5 Drawstring Bag Fall/Winter 2014 The bag will consist of a rose gold faux leather exterior. A rose gold drawstring with Description matte black metal components will tightly hold the closure at the top of this bag. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Metal Drawstring Ends Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

dra

ws

tri

ng

ba

1.97 0.46 2.43

$/unit

Quantity** $Total

2 1 1

$ $ $ $

0.05 0.001 0.10 0.01

2.02 200 1.01 1.01

$ $ $ $ $

0.10 0.25 0.10 0.01 0.46

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.050 $ 0.750 $ 0.500 $ 1.44 $Total $ 25% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.18 1.18 0.02 0.02 1.40

$ 5.91

121

JAKE Handbags
COST SHEET - Cambodia
2.26.14 Style # Style Name Season 5 Drawstring Fall/Winter 2014 The bag will consist of a rose gold faux leather exterior. A rose gold drawstring with Description matte black metal components will tightly hold the closure at the top of this bag. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Metal Drawstring Ends Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

$/unit

Quantity** $Total

2 1 1

$ $ $ $

0.05 0.001 0.10 0.01

2.02 200 1.01 1.01

$ $ $ $ $

0.10 0.25 0.10 0.01 0.46

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.056 $ 0.840 $ 0.500 $ 1.53 $Total $ 16% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.15 1.19 0.02 0.02 1.38

122

GRAND TOTAL

$ 5.98

JAKE Handbags
COST SHEET - Taiwan
2.26.14 Style # Style Name Season 5 Drawstring Bag Fall/Winter 2014 The bag will consist of a rose gold faux leather exterior. A rose gold drawstring with Description matte black metal components will tightly hold the closure at the top of this bag. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Metal Drawstring Ends Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

$/unit

Quantity** $Total

2 1 1

$ $ $ $

0.05 0.001 0.10 0.01

2.02 200 1.01 1.01

$ $ $ $ $

0.10 0.25 0.10 0.01 0.46

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.057 $ 0.855 $ 0.500 $ 1.54 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.23 1.22 0.02 0.02 1.49

$ 6.10

123

JAKE Handbags
COST SHEET - Thailand
2.26.14 Style # Style Name Season 5 Drawstring Bag Fall/Winter 2014 The bag will consist of a rose gold faux leather exterior. A rose gold drawstring with Description matte black metal components will tightly hold the closure at the top of the bag. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Metal Drawstring Ends Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

$/unit

Quantity** $Total

2 1 1

$ $ $ $

0.05 0.001 0.10 0.01

2.02 200 1.01 1.01

$ $ $ $ $

0.10 0.25 0.10 0.01 0.46

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.057 $ 0.855 $ 0.500 $ 1.54 $Total $ 20% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER

0.13 0.95 0.02 0.02 1.12

124

GRAND TOTAL

$ 5.74

JAKE Handbags
COST SHEET - Vietnam
2.26.14 Style # Style Name Season 5 Drawstring Bag Fall/Winter 2014 The bag will consist of a rose gold faux leather exterior. A rose gold drawstring with Description matte black metal components will tightly hold the closure at the top of this bag. FABRICS $/yard* Yield** Total Faux Leather $ 1.95 $ 1.01 $ Suede Lining $ 0.60 $ 0.76 $ TOTAL FABRIC COST $ COMPONENTS Metal Drawstring Ends Thread JAKE label Care Label TOTAL COMPONENT COSTS PACKAGING Hangtags Polybags TOTAL PACKAGING COSTS PACKING Cartons Tape Labels TOTAL PACKING COSTS LABOR Pattermaking Grading Marking Cutting Sewing Admin TOTAL LABOR
*Includes pressing & packing unless otherwise noted.

1.97 0.46 2.43

$/unit

Quantity** $Total

2 1 1

$ $ $ $

0.05 0.001 0.10 0.01

2.02 200 1.01 1.01

$ $ $ $ $

0.10 0.25 0.10 0.01 0.46

1 1

$/unit Quantity $Total $ 0.05 1.01 $ 0.05 $ 0.08 1.01 $ 0.08 $ 0.13 Quantity $Total $ 0.057 $ 0.001 $ 0.002 $ 0.06

$/unit 2.28 0.03 0.06

40 40 40

Cost/Min $Total $ 0.014 $ 0.014 $ 0.014 $ 0.143 15 $0.056 $ 0.840 $ 0.500 $ 1.53 $Total $ 17.6% $ $ $ $

1% 1% 1% 10%

OTHER Freight Duty Broker Insurance TOTAL OTHER GRAND TOTAL

0.17 1.01 0.02 0.02 1.22

$ 5.82

125

ALL IN order of style #: FOLDOVER BAG, TABLET BAG, LAPTOP BAG, BUCKET BAG, DRAWSTRING BAG

TECH PACKS

126

fol

dov

er

ba

127

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129

130

131

132

133

134

135

le b a

a tb

136

137

138

139

140

141

142

143

to p a

a pb

240-291-4417 240-291-4418

Laptop Bag

144

145

146

147

148

149

150

151

152

bu

cke

tb

ag

153

154

155

156

157

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159

160

dra

ws

tri

ng

ba

161

162

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SOURCING GUIDELINES

When sourcing products, JAKE Handbags takes pride in our strong business ethics, aspiring to the highest ethical and legal standards today. We only work with vendors and suppliers who share that commitment and to achieve the quality of backpack that our customers expect. Our mission is to ensure our vendors are efficient, safe and ethical to produce safe, reliable and quality backpacks. Social compliance, supply-chain sustainability, product safety and quality, factory investigating and operations are many of the teams at JAKE that works for responsible sourcing. Our sourcing guidelines derive from our core company values: TEAMWORK: JAKE is a team, sharing our unique talents to help those with whom we work, live and serve. We help each other succeed. The diverse thinking and decision making of our people strengthens our team. We respect and value people with different opinions, experiences and backgrounds. We strive to understand the big picture, and then do our part. We know that by working together, we can produce better results than any of us can achieve alone. Our goal is to build strong working relationships with our vendors to achieve these results. -We treat others with respect. -We treat people fairly and prohibit discrimination. -We conduct business worldwide with consistent global standards.

KNOWLEDGE: Our bags are for women who are either in school or have recently entered the workforce- they help cultivate knowledge. We strive to be knowledgeable on our customers, our products, and the world around us in order to practice the model we preach. We stay knowledgeable by keeping in constant contact with our vendors to ensure our products are being made properly, and by constantly seeking research and feedback from customers. It is also important to us that we understand the affect our product is having on the environment so we can take measures. - We seek feedback from employees, customers, and business partners. - We select, place and evaluate employees based on their qualifications and

performance. - We make responsible decisions during the production of our bags to help protect the environment and our workers. - We know what is happening in our factories.

INTEGRITY: Our customer is one that is honesty and sincere- our sourcing practices strive to do the same. As a business, we are unified in our beliefs, target consumer, values, and responsibility to source products in a respectable way.

When it comes to reporting violations at company manufacturers, there is a confident and secure way to do so, keeping with our value of sincerity. JAKE wants our company to grow and succeed, so being unified about our financial integrity is key. Accurate records related to business and standard accounting are taken, including Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Our goal is to be honest about our products, their manufacturing processes, their materials and their price. - We are transparent with reporting services, financial services, employees and our customer - We strive to stay unified in our ability to act truthfully to our responsible sourcing practices - We conduct our domestic business and international manufacturing with a secure and honesty policy. If something is incorrect, wrong or immoral, it is the responsibility and duty of a JAKE employee to report or change that issue.

COURAGE: At JAKE, we strive to promote a strength and bravery through our handbags- for our customer, she can use our backpack to conquer school, sports and friends. This same heart is found in our responsible sourcing. We constantly strive for the best and for the better. We have the courage to do what is right, including a healthy and safe environment, fair wages, and respectable disciplinary practices. Ethical standards are what we strive to enforce in every aspect of JAKE. - We expect our business partners to be law abiding, complying with legal requirements relevant to every aspect of our business. - We are persistent with the ethical standards of our manufacturers, factories, and employees, constantly having the passion to change what needs to be fixed or update what needs to be updated. - We are fearless in the ability to do more, update, and grow JAKE into a respectable and

courageous company COMMUNICATION: We strive to keep communication a strong priority within our company. First, we will abide by the California Transparency in Supply Chain Act. This means that we will be transparent and only work with manufacturers who are also transparent in how we treat our workers and align with human rights standards. It is also extremely important for our workers (at every level) to feel comfortable and welcome to communicate anything; whether it be a rule violation or otherwise.

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 CONSENSUS: It is important to us that we remain on the same page with all of our employees. The needs of our employees are extremely important to us. We will put forth any extra effort to ensure that we are conducting business responsibly; not only by the standards of our culture, but by those of the cultures within which we conduct business. We will seek feedback from employees and will work to best create the open communication within our company. All in all, we will ensure that our standards of fair employment align with that of our workers. APPEARANCE: We strive to give our customer the fashion forward backpack she wants to wear

every day. Because we create bags that are made for the fashion forward, educated young woman, appearance is a very big factor in our product. JAKE handbags promises to stay on top of the fast fashion market, keeping up with the newest trends that appear on the blogs, in the magazines and other places that our stylish consumer pays attention to and is inspired by. CREATIVITY: It is important to stay as creative and as original while creating fast fashion products.

JAKE does not believe in imitating other designers or companies products, we are a company that is proud of following the fashion trends and creating products of our own that have yet to hit the market in the style we offer or the price. Creativity is important to our employees in our every day lives and we hope our customer appreciates the idea of creativity and originality, as well. GROWTH/PERSERVERANCE: At JAKE we always strive to do our best and to get surpass obstacles,

independent of how hard they might be. We try our best to achieve success and we like to inspire our customer to achieve their goals as well. We aspire to grow as a company and to develop into a brand that is well known for our beliefs and values. We make sure that our factories and vendors understand that we strive to grow and achieve success. We also appreciate when our suppliers envision success the same way we do, and look to grow together with JAKE.

JAKE issues a comprehensive agreement with each of our vendors and their factories under which they promise to utilize legally qualified workers, pay them wages which are fair and legal in their jurisdiction, and provide an environment that complies with their legal requirements. Our agreement also covers issues of time off, free association rights, nondiscrimination, environmental protection and security, and prohibits the use of forced or slave labor, child labor, or prison labor.

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These Vendor Compliance Standards were developed to comply with industry standards, local labor laws, the California Transparency in Supply Chain Act, the UN Declaration of Human Rights and the ILO Core Conventions.We have a highly trained Vendor Compliance Team, which promotes and enforces lawful and ethical operations at our third-party factory sites. The Team accomplishes this enforcement by conducting inspections of our active non-US Vendor manufacturing facilities on a random basis to ensure The Vendor Compliance Standards are understood, respected and followed. We also visit most factories before we hire them, to ensure their facility and operations meet with our standards. The people hired to conduct random evaluations hold the right to choose random dates and times and enter every part of the vicinity. The employees hired to do such checks are trusted by JAKE to report any activity that does not follow our standards.After each factory visit, the Vendor Compliance Team provides a written evaluation of the factory, including any action items, which may need correction prior to the next visit. The team at JAKE does their best to provide ongoing information, advice, and support on fair labor, health and safety, and related issues. Any reports of violations from any of the employees results in automatic termination. There will be no opentoed shoes allowed within the vicinity of each factory. If an employee fails to abide by this rule they will receive a warning after the first offense. If the employee manages to break the rule a second time, they will be terminated from their position. Our goal is to work with our factories to help them improve and ensure consistent compliance. However, in the event that we discover very serious violations or violations which are not corrected within a reasonable time period after our corrective action plan has been issued, we may terminate that factory from our roster.We believe this process assists in guarding against potential unsafe conditions, workplace injuries or mistreatment, and also results in an overall improvement in factory efficiency and product quality standards.

Labor Rules: 1. No forced labor or child labor 2. No person should be employed under the age of 16 (unless specific countries laws are different) and not younger than the compulsory age to be in school 3. Workers should be employed on the basis of the ability to do their job, not on the basis of beliefs, personal characteristics, race, gender and encourage our vendors to eliminate discrimination 4. Utilize partners who provide a safe and healthy work environment

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5. We will not knowingly work with factories utilize child labor. 6.We define child labor as either being below the local minimum working age, or the age of 16, which ever is greater

Wages: 1. Provide wages and benefits that comply with applicable laws and match the manufacturing or finishing industry practices 2. Identify local legal limits on work hours and favor partners that require less than sixty-hour work

weeks 3. Employees are allowed at least one day off in a week

Safe and healthy workplace: 1. Safe and healthy workplace 2. Comply with local laws 3. If factories provide residential facilities for their workers, they must be safe, healthy and in compliance with local standards

No Discrimination: 1. Respect cultural differences 2. Workers should be employed based on their abilities, rather than their race, gender, personal characteristics or beliefs 3. Our factories eliminate discrimination in their workplaces

Environment: 1. Our factories operate in compliance with environmental laws 2. Work to minimize their impact on their surroundings and global resources.

Fair Disciplinary Practices: 1. We will not work with vendors whose factories utilize physical or mental 2. Punishment against their employees

Reasonable Working Hours and Overtime: 1. We will not work with factories who require a work week that exceeds local laws 2. We will not work with factories who require a work week of more than 48 hours 3. Workers shall have at least one in seven days off

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MANUFACTURER EMAILS & CALLS

TAIWAN (Responded suppliers include Taiwan Yamani, Core Accessories, Starite International, Lexon Bag & Accessories,
Niche Summit)

VIETNAM

(Due to space, not all emails are shown for all countries, but the most contacted are shown)

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176

THAILAND

(Thailand Manufacturers were also called within the month of February multiple times, but never responded or called back)

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CAMBODIA
After having selected ten suppliers that seemed to be the most viable in our selected countries. I researched the ten suppliers that specialized in leather and faux leather handbags and luggage, and who would be able to manufacture our bags. I also looked at their quality standards, and how their manufacturing process would benefit our company. Followed by that, I looked at other criteria such as their abilities, capacity, flexibility, lead-time, customer service, top customers, and sourcing guidelines The suppliers I picked, were the ones I could find the most information on, and most information on their customers. The main criterion I was looking at for Cambodias suppliers was definitely based on customers, and their sourcing guidelines. These suppliers seamed to be the one that matched best our companys sourcing guidelines.
KAP CAMBODIA EMAIL Date: February 9, 2014 TO: munykap@gmail.com Hi, I am one of the designers and founders of JAKE Handbags, a new handbag company in the United States. We design fast-fashion, faux leather handbags, with high quality and that are long-lasting. We currently have 5 styles, which consist of: the bucket bag, laptop bag, ipad bag, fold-over bag, and a drawstring back pack. They are all faux leather and are lined with faux suede. We found your company on Panjiva, and are looking to source from supplier in Cambodia, since weve heard good things about manufacturing in your country. I am looking for a quote for the attached tech pack, and Id like to know the cost for one unit of each bag. Please let me know your quotes. Thank you, and hope to hear from you soon, Maria Antonia Ayres, JAKE handbags

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Date: February 9, 2014 TO: Cambodia@wahsun..com.kh Hi, I am one of the designers and founders of JAKE Handbags, a new handbag company in the United States. We design fast-fashion, faux leather handbags, with high quality and that are long lasting. We currently have 5 styles, which consist of: the bucket bag, laptop bag, ipad bag, fold-over bag, and a drawstring back pack. They are all faux leather and are lined with faux suede. We found your company on Panjiva, and are looking to source from supplier in Cambodia, since weve heard good things about manufacturing in your country. I am looking for a quote for the attached tech pack, and Id like to know the cost for one unit of each bag. Please let me know your quotes. Thank you, and hope to hear from you soon, Maria Antonia Ayres, JAKE handbags Also no email reply - called and spoke to Kong Botom at +855 650 0232

Because Maria received limited email responses back from these manufacturers, she called the following and received no answers, as well: Kong Botom at WAH SUN (+855 650 0232) Dong Yun at KAP Cambodia (+855 023 987 419) Andy Zuo at Zhongzheng (+855 1195 5013)

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BANGLADESH

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