Lattice Semiconductor has opened up a corner of the overseas e-commerce market by using various “copycat” electronic products and cheap wedding dresses made in China. It not only has cost advantages, but also has a unique feature in that it has greatly shortened the supply chain of foreign trade B2C. Upward, Lattice Semiconductor bypasses the layers of intermediate trade links. Currently, 70% of its products are directly purchased from factories, achieving the purpose of saving purchase costs; downward, Lattice Semiconductor directly sells these low-priced Chinese-made products to C-end customers at the pricing standards of the overseas market, gaining the advantage of high gross profit.
1. Highly efficient customized production of personalized products
Lattice Semiconductor’s customized products are mainly wedding dresses, which customers can customize according to their body shape and favorite colors. Tiger Hill in Suzhou is the main source of wedding dresses, and it is said to occupy 70% of the national market share of wedding dress production, but most of them are scattered small workshops. The production and management level is mostly not high. To meet foreign trade standards, we must first find ways to standardize their product quality and improve production efficiency. To this end, Lanting has established an internal team of experts who are directly involved in the production line and are responsible for guiding suppliers to improve production efficiency and product quality, so that they can meet the standards for mass production of customized and standard products in the shortest possible time. In order to ensure sustainable production and supply capabilities, Lanting Jieshi usually signs a one-year supply agreement with suppliers, which includes product types, unit prices, quantities, delivery time, etc.
For customized clothing products, Lanting Jieshi usually updates the orders to suppliers every day after receiving the orders, and the suppliers make them according to the needs. Since they have reached a process-based production coordination capability with the expert team, suppliers can usually complete production and deliver the goods to Lanting Jieshi’s warehouse within 10 to 14 days after receiving the order; for standard products, suppliers can usually deliver the goods to Lanting’s warehouse within 48 hours.
Lanting Jieshi has established a relatively efficient supply chain management mechanism, which not only ensures timely processing of orders, but also helps suppliers reduce waste through customized production processes, which correspondingly enhances the willingness of suppliers to cooperate with Lanting Jieshi. This procurement system allows LightInTheBox to maintain a low inventory level. At the same time, because it updates order information to suppliers on a daily basis, it also allows LightInTheBox to maintain a high order fulfillment rate.
2. Prepare standard products in advance with zero inventory risk
LightInTheBox’s supply chain management model is very different from other e-commerce websites. On the one hand, it can purchase directly from manufacturers to shorten the supply chain and achieve a higher gross profit margin; on the other hand, for customized and non-customized products, LightInTheBox and suppliers have established unique cooperation models, which can effectively reduce inventory risks and achieve ultra-high inventory turnover rates while ensuring production efficiency.