The Price of Made In The USA

What happens when everyone wants the “Made in the USA” label? In this blog, I will go over the pros and cons of producing in the USA through our recent V.Mora podcast, “Price Tag of Made in the USA” with Anna Livermore & Laura Dotolo.

With sustainability, minimalism, and Made in the USA trending it is understandable that many designers come to our team wanting to produce domestically. The truth is… it’s possible, but there are pros and cons that should be taken into consideration. In a recent V.Mora podcast, Anna Livermore interviewed Laura Dotolo, the Founder of ClutchMade Manufacturing. She explained the benefits of manufacturing domestically and discussed the additional costs and other drawbacks as well. Click to listen on Spotify(HERE) or Apple Podcasts(HERE). 

Offshore or Onshore?

In the 1960s, around 96% of garments sold in the USA were produced in New York’s Garment District. Now only about 4-5% of garments are produced in the Garment District. So what happened? Around the mid 80s, manufacturing moved offshore, resulting in the ability to increase quantities and lower retail pricing. This was revolutionary for the fashion industry and created an era of fast fashion and global brands. 

Recently there has been a trend to move back to the “Made in the USA” label. Covid has also provoked many companies to consider producing in America versus outsourcing everything. In the podcast, Laura Dotolo, Founder of ClutchMade, a handbag manufacturer,  explains the benefits of manufacturing in the USA. The first being that customers perceive goods made in America as more sustainable and environmentally conscious. The second is ease and speed of shipping. With production in the USA restocking can be quicker and more reliable, and deliveries can also be faster.. The third is the perception of quality consumers have for “Made In The U.S.A.” products, and finally, when you produce in the USA, customers can trust that the product is made ethically by well paid workers, healthy working conditions and human rights laws behind them. 

So what are the drawbacks of producing domestically? The cost of labor can become the main drawback of producing domestically. With wage minimums, benefits, and OSHA laws, labor costs can easily cut into profit margins. The second drawback is that you must have mid-high retail prices. In order to cover supplies, labor, overhead, and profit margin you cannot compete with fast fashion or even some mid-range brands. The final drawback can be finding the right vendors, it can be easy to find a factory offshore that can produce thousands of units, but for some designers who want to produce smaller collections domestically, you must know who to contact in order to have access to these factories. At V.Mora, we aid in this process to pair you with a like minded factory. 

Producing offshore can dramatically reduce the unit price of your inventory; however, in order to get the quantity price breaks, you may be required to order a huge amount of inventory. This can result in a much higher overall cost of goods, and a burdensome amount of inventory and expense. Other things to keep in mind when producing offshore is that shipping your freight will be higher and there are duties, tariffs, and taxes on the shipment that vary depending on what country you are importing from. .

Finally, some other very good reasons to keep your production here in the United States are better communication, more control, and better payment terms. Since everyone speaks English, there are no language barriers which can often cause expensive mistakes, miscommunication, and delays. It is also much easier to be physically present to monitor Quality Assurance during the manufacturing process. When you produce in another country making a trip to monitor production can be time consuming and expensive. Domestic manufacturers may often offer better payment terms and options while offshore factories can have more rigid terms and fewer payment options. This flexibility can help even out cash flow especially during start up.

Your specific business plan and goals for your product line will dictate whether you should manufacture a smaller amount of inventory in the U.S.A. or a much larger amount offshore. If your primary goal is to simply get your line launched, established, and out there by using ecommerce, social media, and pop-up sales, it may be a better idea to keep your inventory low and manufacture in the U.S.A. Especially in today’s environment, the “Made In The U.S.A.” label adds additional value to your product. Consider holding less inventory of higher quality goods. This can result in a better way to grow a profitable, well respected brand and a solid fashion business. 

Do you need help with producing your line? At V.Mora we can help you through the entire production process from designing, to sourcing and so on through our Production Development services. If you are in need of the following Development and Production services: 

• Sourcing 

• Technical sketches 

• Pattern Making

• Prototype making 

• Sample Making

• Fittings 

• Digitizing and Grading

• Marker Making

• Manufacturing

Please contact us at: vmorainquiry@vmora.com