Beyond Price: Winning Strategies in RMG Negotiations: Hasin Arman, Director, MB Knit Fashion Limited

The global apparel market is in recovery mode, but price pressure has intensified. Brands are consolidating their supplier base, aiming for fewer but stronger partners while still demanding lower landed costs. In FY ’25, exports crossed US $ 39 billion, yet margins were squeezed harder than ever.

I’ve experienced this firsthand at the negotiation table where buyers asked for 5-6% cuts, citing oversupply and alternative sourcing from Vietnam or Turkey or other competitive countries.

Retailers are cautious; they want agility, lower inventory risk and are spreading sourcing across more countries. That gives them leverage on pricing. Meanwhile, a weak Taka raises input costs for us. A stable FOB doesn’t mean stable profit when half of your raw materials are imported. Also, when your costs are rising but you are not getting the FOB according to the cost structure, it’s a one-sided win then, and in such a way, it’s very difficult for the manufacturers to survive.

Another trend is buyer consolidation. Larger retailers prefer to reduce the number of suppliers, giving bigger orders to a smaller pool. The upside is stability if you’re in that circle. But the negotiation becomes tougher because buyers know you want to stay in. We need to rethink our investments and factory set-ups. We need to think about upgrading our status from OEM to ODM and OBM.

Price opens the door but it rarely closes the deal. Buyers look for three things: reliability, on-time delivery and consistent quality. Delays are more expensive than a 2-3% higher FOB. Compliance and trust matter – factories with clean audit records reduce risk for brands.

Differentiation also plays a big role — faster design-to-delivery, sustainable fabrics or innovative packaging. I recall this buyer of ours who chose us over a cheaper competitor because we ensured consistency and offered complete transparency in audits. The 2% price difference mattered less than avoiding a missed season. We need to have certain USPs to promote ourselves; there are no alternatives.

Negotiation is won before it begins. We must research sourcing patterns, know if the buyer splits orders by region, their MOQ habits and peak seasons. Benchmark competitively, not just on price but on lead times, compliance and value-added services like design, working culture, payment methods and sustainability practices. Know your numbers, always walk in with a clean cost breakdown and your minimum acceptable price.

Prepare scenarios, a standard quote, a value-added option and a conditional discount. Personally, I maintain a one-page dossier for each buyer; their negotiation style, past concessions and typical bottlenecks. It shortens talks and prevents repeating mistakes.

Also, bundle it up, instead of quoting item by item, try packaging SKUs or styles together; it saves buyers time and gives you room to offer better overall value. Design together, invite buyers into the process.

A small tweak in fabric or trim, done collaboratively, can cut costs without hurting the final look. Think long-term – offering a small discount in exchange for a two or three-season commitment can be a win-win. For example, when a buyer asked for a 5% cut, I offered 2% plus a two-season forecast agreement. That gave stability to both sides. Start small, scale smart, pitch pilot runs using new materials or processes; if the results are solid, scale up. It’s low-risk and shows you’re thinking ahead.

At the same time, there are clear don’ts. Don’t slash prices out of desperation; volume without margin is unsustainable. Don’t ignore hidden costs like logistics surcharges, commercial charges, compliance remediation or last-minute airfreight — they can turn a profitable order into a loss. And don’t overpromise — unrealistic lead times damage credibility and ruin future negotiations. I’ve seen factories accept aggressive lead times only to spend their entire margin on overtime and expedited freight. I’ve also seen companies take orders out of desperation at lower values which don’t even match the basic costings. This is when we lose our value. If you’re a big supplier, it’s better to say no than to burn both money and trust.

Price negotiations in 2025 are no longer about who quotes the lowest FOB. They’re about who reduces risk and adds value. The winning suppliers are those who know their costs, communicate transparently and offer structured solutions rather than one-off discounts. Our strength as an industry lies in scale and resilience but our future depends on evolving from order takers to strategic partners. We’ve reached a mature stage; we’ve proven our resilience. Now it’s time to diversify our product range and move into value-added segments.

Looking ahead, we must upgrade ourselves toward ODM and OBM models, as I’ve emphasised before. But my utmost request to everyone in the Bangladesh RMG industry is this: let’s keep our unity intact. That’s our greatest strength. We must not destroy market standards by quoting prices below cost and we must not give anyone the leverage to divide us and rule. As an organisation, we’re committed to working on floor pricing and setting industry-wide standards to protect our future.