Lara Guevara talks with the Section 119 team about how they prepare for Black Friday. They negotiate vendor terms that let them pay 70% after shipping, test products with MOQs as low as 35 units, and rely on four-year relationships with suppliers they visit in person.
Questions this video answers
30% down payment and a 90-day term after ship out to pay the 70% balance.
35 units (can be split across sizes; example ≈5 units per size).
About four years (turned four years in August).
Use of third-party inspections in China.
Chapters
Foreign.
This is Lara Guevara, founder of MOVE and the host of Supply Chain Moves podcast. In today's episode, we're spotlighting a brand that's making waves in the competitive world of DTC apparel. Section 118. With 2024 shaping up to be one of the most challenging years for E commerce businesses, I recently sat down with Greg Carey, the CEO of Section 119 to learn how they're not just surviving, but driving. I hope you can check that episode before this episode. We'll also share the link in the show notes. Greg shared very great insights about their preparations for Black Friday and Cyber Monday. But the real story lies in the team behind the scenes. Today we will hear from the incredible individuals who drive their supply chain coordination, inventory planning, product development and design. From securing flexible vendor terms to producing high quality trend setting designs, this team has built a robust foundation for success. We'll dive into how they're leveraging teamwork, adaptability and strong vendor relationships to navigate market challenges and positions themselves for growth. If you're looking for inspiration on how to scale operations or lead a team through uncertain times, this episode is for you. Very excited to get started and interview the talented individuals that I've recruited.
For me.
So the question is what is the strength of section 119 vis 2024? And I was able to talk to Greg last week and he was able to share a lot of input thoughts about preparation of DFCM for section 119. And here with us today are the team members who made that happen. And for me as the one who founded move, I think my. Before I ask our guest what is the strength of section 119? I would say that for me it's the team itself. I'm so proud of this team because this is the team that I built for section 119. So somehow biased, but all of these talented individuals are my connections and I recruited them to join section 119. So everything that section 119 is achieving right now, I know that Greg will agree with me that they are the one who made it happen. So here with us is Joanna, our supply chain manager. Aizah, our inventory planner and analyst. Guys, our new product development lead, our new product and licensing and let our designer. So my only question, one and only question for this episode is what is the strength of Section 119 right now? And if you can explain a little bit about it. So let's start with the supply chain manager.
Yeah.
Hi.
So I'd like to say one of the strengths of the T team would be having good payment terms with our current vendors. Right now we have, we have different payment terms but we're proud to say that we have recently able to negotiate with a vendor to have a 30% down payment and a 90 day term after ship out. That's where we pay the 70% balance payment. So I guess this is brought about by the good relationship that we've been having throughout the years. Probably also one good factor that could have helped also with the payment terms is a recent visit to China wherein we we had the actual plant visit to our top vendors. And from there I'd say they really appreciated the visit. They saw the the long term relationship that we wanted to build with them. So given that we did that we were able to negotiate more and have better terms with some of our vendors because of that.
So yeah, I think that's one of the strengths.
So thank you. 2024 is one of the hardest year for any DTC brand. It has been shared in the news, in social media that this year it's like the make or break of a lot of dtc. A lot has closed and even those who are doing well they start started to slow down and lower growth. So the fact that we are still having negotiating a better payment terms that will really help the DTC brand. So thank you for sharing that. Aiza. For you, our inventory planner, what do you think is the strength of section 118?
For me I think it's the flexibility. So whenever like there are market fluctuations, whenever there are changes in demand or disruptions, especially for peak season, I think 2019 is very flexible enough to support the customer needs. Like whenever there are market uptrends, we make sure that we communicate well with our suppliers and they can probably scale up or you know, make the production faster. They can make changes between their production schedules to make sure that what is important can be delivered earlier. So I think in terms of turning things around, making sure that whatever we need to sell the fastest categories, the volume drivers are easily available for our customers to avail.
I think Isaiah I totally agree. Flexibility is one of the superpower of any DTC brand and it is very connected to what Suana shared about great vendor relationship, good payment terms and then the flexibility of our vendors to allow us to add quantity or improve lead time or whatever. So thank you for sharing. All right. For the new product development lead Kat, what would be the strength of section 118?
I think throughout the years I think the quality itself. Apparel. Apparel has been challenging for us start startup business since we started section 119 we did not compromise any quality.
Even if.
If it's a bit expensive. We did not compromise any quality. And also we established third party inspection in China. It really helps the quality that we bring to the U.S. our market, our main market. So also I think team, teamwork because it's very important every time we have changes in the management, very important the teamwork that we also establish the rapport. Because imagine if every team member we change it from time to time. The rapport will not be established and.
Work well throughout the years.
I know.
Kathleen, how long are you with section 119? Uh, I. Four years. I turned four years August.
Four years.
Same with you. I said that right? Four years. Yeah. So what you've mentioned is on point where imagine having a transition or transitioning employee every now and then talent or even the management, if you keep on changing it will still have a training period adjustment, learning curve. But for you, you keep on improving the expertise, you gain experience. Visit China, you talk to a lot of vendors, you learn a lot and you apply it to section 118. Like section 118 is receiving the benefit of those experiences and expertise that you have. All right. Okay. So for Leah who's our also part of new product and doing licensing, what do you think is our strength as.
Part of the new product development team? One of our strategic advantage is our strateg strong relationship with vendors with loom MOQ can accommodate us. This flexibility is invaluable for like product development and testing which can help us gauge the customer interest and especially without costing us with high upfront inventory costs. And this help us be ready. And if there. If we. If they demand my VATS into. Into a different shift.
I Greg. I remember Greg mentioned during our interview that apparel is. Is a very saturated industry. So having the strength or the the flexibility to order a small quantity. Try that out. If that works then order more. If that didn't work then there's not much inventory left unsold. So I think that's, that's a really good way to also help the cash flow of section one in that sense if you, if you order. So what's your lowest MOQ? Just. Just wondering. Curious.
35. 35.
So imagine 35 and then net. Net 60. Yeah.
And you can split that to different sizes.
That's oh my goodness. So it's a five units per size.
Okay.
Last but not the least our in house designer for all the brands here in section 119. Let what do you think is the.
Strength so for me like as an apparel designer like one of the Strengths of Section 119 is like exceptional quality and the diverse design selections. I think for a couple of years like created high quality, innovative designs that it ranges from like subtle to loud designs. Also like good for casual everyday wear and formal occasions and also trying sports wear. So our collection is very different. It also includes styles for like women's women and men. So it's very unique. And I think one of the strengths that we also have is we're very adaptable with our product releases. We try to stay on like the current trend and the needs of our of the customers.
So yeah, I agree. Let I know that it's extra challenging for you as a designer for a company that is under licensing because licensing is a different ball game. Very strict has a lot of and we cannot just launch any design that we want. Depends on the licensing. So I think we captured six strengths of section 118 and this strength, aside from the teamwork that you've mentioned, the team members that we have right now, it's also the unity of those strengths. If you have issue in cash flow or if you're having issues in sales, low sales, then you have low MOQ payment terms. You have good relationship with your vendor. You have the flexibility to adapt to change and to improve the current ordering system of session 180. So thank you so much for this opportunity that you give me to interview you with. I know that you're very busy and you have a lot of meetings for today. Good luck on your bfc. I know that you're waiting for good news for also the bonus that we're waiting on. Right Greg? So thank you so much. Dean of section 180.
