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That structure has lowered Benetton's manufacturing and labor costs, has reduced its risk (which shifts to its suppliers) and has given it unbeatable flexibility.
Third is the network organization for distribution: Benetton sells and distributes its products through agents, each responsible for developing a given market area. Benetton does not own the stores; its agents set up a contract relationship (a licensing agreement similar to a franchise) with the owners, who then sell Benetton products. Benetton supports the retailers with services such as merchandising.
Today, Benetton's main supplier of raw materials-? which guarantees that it will provide 60% of the woven fabric, 90% of cotton knit fabric and 90% of carded and combed wool ? is 85% controlled by Benetton itself...
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