With the globalization of the fashion industry, several countries are now viable options for manufacturing operations. Most apparel manufacturing takes place abroad with about 98% of clothes purchased in the United States produced overseas.
Each garment producing country has its own benefits and drawbacks. China is a powerhouse for clothing, producing 39% of the world’s clothing exports. However, the European Union is not too far behind being the second largest textile exporter. While China produces for luxury companies, European countries like Italy are better known for their artisan craftsmanship and connection with luxury brands like Gucci, Tod’s, and Golden Goose.
Nonetheless, many feel there is no place like home, and find Made in the U.S. an appealing label – so much so that some companies have feigned the Made in USA label to attract customers. This begs the question: Why is it uncommon to produce apparel in America? What are the benefits and drawbacks? What are the reasons companies would prefer to appear to make things in the U.S. vs. outside of it? There are a lot of factors to consider, so let’s dive in.
Clothing Production Costs
Start at the bottom line: domestic manufacturing in the U.S. is more expensive. The higher cost for American manufacturers happens in large part due to the higher minimum wages required in American labor, whereas other countries like China, Bangladesh, and Vietnam have cheaper labor.
On the other hand, you don’t have to pay as large of a transportations cost to get products from factory to store. This also links to wider benefits like a lower carbon footprint and faster delivery.
Thirdly, payment to overseas manufacturing partners can be tricky depending on where you produce. The most common method is through wire transfers which can incur its own costs with exchange rates and banking fees. For businesses with multiple suppliers, can be a challenge to manage different currencies and payment options
Garment Worker Labor Rights
While it means an extra cost, many brands and consumers are concerned with which countries can provide ethical manufacturing for their products. Not only will it clear the conscience of business owners and customers, it also ensures no exposè or public relations disasters.
While China and other Asian countries are associated with sweatshops, it’s wise to avoid seeing all offshore manufacturing countries as a monolith. Just as China has ethical factories, America has sweatshops in New York City and in LA. The U.S. Labor Department found that 85% of garment shops it investigated in South California had pay violations. Even Italy has scandals with exploitative working conditions. In cases where governments have higher labor laws, factories can sometimes take advantage of migrant and undocumented workers.
To avoid this, it is best to seek out services that can partner you with already vetted manufacturers. Sourcing partners save brands time and money because they do the ground work involved in finding, interviewing, inspecting, following up on, and contracting high quality, trusted vendors.
Impression of Domestic Manufacturing
As discussed in the introduction, “Made in America” is a great marketing tool because Made in America products have value to people in the U.S. A survey from the Reshoring Institute found that 70 percent of people showed interest in purchasing American made products. Consumers feel good about contributing to the local economy and communities. Some believe that the high price linked to American made products means a more premium quality or ethical or sustainable manufacturing processes, whether or not that's actually the case.
There has been ongoing press, though, on how many companies deceive customers with their “Made in the USA” designation. “Made in USA” is a protected label by the Federal Trade Commission, which outlines that “all or virtually all” parts of a product must be made in the United States in order to use the label. Companies have been called out for misleading customers with this label when in reality partially or all manufacturing of the product takes place outside the United States, including major retailers like Target. One case found that Target advertised pillows as “Made in USA”, yet the tag said “Made in China”. Even when they claimed to fix it, they still mislead customers on the country of origin on their website for a variety of other products.
Another trick companies employ is labeling their product as “Designed in the USA” or “Assembled in USA”. “Designed in USA” just means that this company has an office in the U.S., where they design the product. Its manufacturing operations can still occur outside the country. On the other hand, “Assembled in USA" means imports are assembled but many of the parts can be and are imported from other countries.
On the other hand, a timeless prestigious label is the “Made in Italy” tag. “Made in Italy” is associated with fine craftsmanship and creativity. It has and will continue to be associated with luxurious clothing and consistent quality as evidenced by the vast number of luxury clothing brands continuing to upscale their investment in Italy based garment production.
Communication with Clothing Manufacturers
Communication with suppliers who speak your own language and live in the same country, means fewer language and cultural barriers. Cultural and language differences can be a real struggle when it comes to communicating quotas, quality control standards, etc., and fixing any issues that arise during the sampling or production process.
Many people alleviate this, though, by having a third party liaison. Third party manufacturer brokers benefit fashion brands by serving as not only a cultural and language translator when working with factories like those generations-strong family shops in Italy; they're also an objective intermediary between the brand and the manufacturer. Their role involves verifying manufacturers’ operations by checking for proper documentation. They use their extensive expertise in fashion manufacturing to assist in quality control, evaluating the materials, and production operations. Brokers prevent major mistakes from lack of knowledge and research, an essential that many designers don’t have either the time or the resources to acquire.
One major downside to American apparel manufacturing is that it lacks the infrastructure for real mass production of clothing. These limits mean that there are some specific items that can’t be produced in the U.S., whether due to gaps in craftsmanship knowledge or gaps in machinery. For example, some business owners discuss how certain sewing machines are not available in the U.S. such as the double-fold machine for polo shirts (which costs millions of dollars). Another example is that some countries have specific specialties. For example, Italy is known for steller leather craftsmanship.
Countries like Italy have economies that have been built around the fashion industry supply chain. It would take whole industry collaboration and significant investment in U.S. based fashion production for the infrastructure and mass scale craftsmanship knowledge of America's garment factories to catch up.
Choosing the right manufacturer in the right location is a crucial decision. It impacts many facets of your brand and operations from how you will communicate your initial ideas, to the quality of the end product, to your supply chain logistics in times of stability and in times of crisis. No matter which country you choose (although we recommend producing with a trusted and vetted factory in Italy), it’s essential to find the best high quality, trusted supplier to add to your team.