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This AI Tool Connects Brands to Suppliers—And Does the Negotiating
Meghan Hall
5 min read
One startup wants to use technology take the agitation and high costs out of sourcing and procurement processes.
Cavela, an artificial intelligence-powered sourcing solution, has announced its official launch, along with $2 million worth of fundraising from XYZ Capital.
The platform uses AI to connect fashion brands with suppliers based on a description of the good the brand needs to produce, then negotiates on their behalf to find the best quality at the right price. Thus far, Cavela has integrated with more than 200,000 suppliers and tested with several dozen brands, including workwear brand Western Welder Outfitting.
Anthony Sardain, the company’s founder and CEO, said he had been mulling around the idea of building a system like Cavela for some time; his family works in trade, and he focused on trade when completing his master’s degree. But he realized there might be a market for the company he eventually launched by helping out a family member.
“The ‘aha’ moment for me came when I was helping a family member source custom products for a hotel. It was tedious and time consuming, so I built out a small automated tool that helped streamline a number of operational tasks, which happened to work great,” Sardain told Sourcing Journal. “By coincidence, that same week, I happened to be talking with a friend who was…sourcing supplements out of India and facing similar issues. Different vertical, different use case, different product, different countries, same pain point, same solution—and that’s when I realized we had something.”
Sardain said the idea behind Cavela has always been to ease operations for sourcing teams; the companies likely to see the most immediate benefits are small-to-medium enterprises that lack larger, dedicated sourcing teams that a massive brand or retailer might boast. However, Cavela will extend into the large enterprise territory as needed for clients; according to Sardain, the technology can support a variety of clients with mismatched needs.
“We do three things. The first is, we shield the brands from unnecessary communication, and that allows us to engage with many more suppliers on their behalf and get more competitive quotes than they would if they were doing things themselves. Two, we centralized the entire sourcing journey—so no more email chains, WhatsApp messages. The AI collects all the information, puts it all in a feed where it’ll alert you, ping you for clarification, let you manage your order… And third and most importantly, we find the best supplier at the optimal cost,” he said.
On average, the clients Cavela works with have seen a 37 percent decrease in supplier costs.
Though it has the breadth and depth to support various types of fashion and apparel brands, up to this point, Cavela has stayed away from offering its services to companies in need of highly specialized goods with many parts or ultra-complex production cycles. It plans to move into more complex sectors as Sardain and his team build out the technology further, but in the meantime, he wants to ensure he’s providing the best, most accurate service possible to clients.
Brands and retailers aren’t the only companies benefitting from Cavela’s technology. Suppliers gain from the relationship, too; their customers suddenly become more responsive during their business hours—even on different time zones—and accordingly, negotiations become shorter.
The suppliers Cavela works with are spread all over the world, with a large base in China—even as questions over tariffs, de minimis and regulatory enforcement of laws like the Uyghur Forced Labor Prevention Act (UFLPA) linger, Sardain said many of the brands he works with still have a vested interest in sourcing from China. However, he has also started to see an increase in requests to source from other countries—Mexico, in particular.
As some brands look to nearshoring, Mexico has piqued their interest. Accordingly, Cavela has built out its supplier network in the country. But Sardain said sometimes, the idea of manufacturing in Mexico makes more sense than the reality—both from a cost perspective and a geopolitical perspective.
“Fundamentally, it comes down to an awareness that cost is always a major driver,” he said. “When brands are trying to avoid China at all costs…they realize that you can manufacture your clothes in Mexico, but if the fabrics are still coming from China, to what extent do you actually have independence from China there?”
XYZ Ventures, Cavela’s investor, also had an interest in the potential for Cavela to connect brands to non-legacy supplier countries as interest in Mexico and Vietnam seems to boom. But Ross Fubini, managing director for the venture capital firm, said that during XYZ’s partnership with Cavela, his team has learned that, regardless of where the suppliers are located, sourcing is a historical challenge that didn’t have a solid, end-to-end automation option in place.
“A lot of the idea that Anthony I originally had when we started this was about the changing buying patterns and the opportunities in [places like] Mexico, Guatemala…and Vietnam,” Fubini told Sourcing Journal. “While that is still true and relevant, it was just shocking to me how much pull there was for a better solution even for existing suppliers or existing regions that [brands] were working with. I hadn’t realized the amount of pain people were in, or the amount of joy you can give by connecting them in a better way to their suppliers.”
With the funds Sardain secured for Cavela from XYZ, he and his team plan to continue refining the technology behind the solution. To pilot and validate Cavela, the team used out-of-the-box models and built on top of them; now, the company is shifting to training its own models to doubly ensure quality.
“Sourcing is a long and complex process that goes from quotes negotiation to handling samples, quality assurance, tracking of shipments, all of that. All of these have a technology aspect that we are building out, and so that’s really our primary focus,” he said. “Our focus for the coming months—and I expect that this will be something we’re continually looking to improve—is the intricacy of the automations themselves, allowing users to do more by doing less.”
