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Sojitz navigates complexities of compliance: problems with customs can result in cancelled orders, fines--or worse. That's why many apparel firms are turning to outsourcing.

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When a start-up manufacturer of organic apparel set out to label its garments made of bamboo fabric, things got complicated. According to Federal Trade Commission (FTC) regulations, the fabric couldn't be labeled "bamboo," because it was considered a manmade fiber.

If this sounds like a nitpicky technicality, consider the financial impact if U.S. Customs asked for the mislabeled goods to be fixed and redelivered. Depending on whether the goods had already shipped, the importer would face a hefty fine or unhappy retailer.

And labeling is just one small component of the numerous, complex details that today's apparel importers must comply with--or face great expense, delays and governmental liabilities.

Unfortunately, compliance is often viewed as overhead by companies, with compliance professionals wearing many hats. "Although business leaders do realize it's a high-risk area, it's often a low-priority area for 1T funding," says Asa McLoughlin, operations manager at New York City-based Sojitz Corporation of America, a global trading company. "Until that container with your fall line, that should be at your most important retailer's tomorrow, is stuck [in customs], it's probably not going to get your board room's attention."

Trend toward outsourcing

Because small- to mid-size apparel firms might lack the...

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