What happens in the Putting-out system?
What happens in the Putting-out system?
For the weavers, this arrangement has two advantages:
1. The weavers do not have to spend their money on the purchase of yarn.
2. Weavers don’t have to think about the selling of finished cloth.
On the other side, there are a few disadvantages for the weavers:
1. Dependency on raw materials and markets makes merchants more powerful.
2. Weavers are paid very less for making the cloth.
The market works more in favour of the merchants. The arrangement between the merchant and the weavers is an example of putting-out system, whereby the merchant supplies the raw material and receives the finished product.
The merchant supplies the cotton cloth produced by the weavers to a garment exporting factory. The garment exporting factory uses the cloth to make shirts. The shirts are exported to foreign buyers. Foreign buyers are businesspersons from the US and Europe who run a chain of stores and do business strictly on their own terms which are:
1. They demand the lowest prices from the supplier.
2. They set high standards for quality of production and timely delivery.
3. Any defects or delay in delivery is dealt with strictly.
For the weavers, this arrangement has two advantages:
1. The weavers do not have to spend their money on the purchase of yarn.
2. Weavers don’t have to think about the selling of finished cloth.
On the other side, there are a few disadvantages for the weavers:
1. Dependency on raw materials and markets makes merchants more powerful.
2. Weavers are paid very less for making the cloth.
The market works more in favour of the merchants. The arrangement between the merchant and the weavers is an example of putting-out system, whereby the merchant supplies the raw material and receives the finished product.
The merchant supplies the cotton cloth produced by the weavers to a garment exporting factory. The garment exporting factory uses the cloth to make shirts. The shirts are exported to foreign buyers. Foreign buyers are businesspersons from the US and Europe who run a chain of stores and do business strictly on their own terms which are:
1. They demand the lowest prices from the supplier.
2. They set high standards for quality of production and timely delivery.
3. Any defects or delay in delivery is dealt with strictly.
