The exodus of manufacturing apparel and accessories off shore has led to the crumbling of the domestic factories. This has led to an outcry by some politicians and activists to buy American made products. “Made in China- Designed with the World” is the latest marketing push the finance department of the Peoples Republic of China has blitzed in television, internet, and radio internationally.
China has recently suffered a number of embarrassments stemming from poisoned milk, lead in toys, and a slew of other quality control problems in a number of Chinese products. Most recently auto industry leader Toyota has issued a major recall and apology after a major recall due to brake systems failure across their most popular models. Many analysts believe that the opportunity for domestic product to ramp up and take advantage of what is perceived as a decrease in the demand for imported items. Would it make sense to purchase only US made goods given the current economic circumstances?
First a comprehensive cost analysis would be required to make an informed decision. Let’s take a closer look at the apparel and accessories industry where nearly all goods are now outsourced. There are macro costs that need to be analyzed carefully. Cost of materials, cost of manufacturing (labor), and import (transportation and duty) costs. What analysts fail to realize is migration of the apparel industry led to a specialization in other markets as demand has ramped up. China for example has become the textile factory of the world. The haute couture houses in the United States and Europe crease the designs and patterns. The sketches are sent to fashion manufacturing hubs in Hong Kong, Shanghai. Once sampled and approved they eventually end up in your Nordstrom’s or Bergdorf Goodman’s.
Overseas laborers have also become skilled craftsmen in their trade, outperforming their American and European counterparts in output and productivity. This specialization leads to higher efficiency and quality in construction. Goods produced overseas also offer less expensive finished goods. In some categories 40 to 50 percent less expensive than if manufactured domestically. This savings is then passed on to the end consumer. On a good Handbag Sale for example, a consumer can purchase 2 items instead of just one. It is important to keep in mind that as the economy continues to globalize, lines that were once drawn have dissipated. Manufacturing is done in China, but the design is in Europe, the sales are in the US. In the jeans industry, the fabric comes from Asia, the jeans are cut and sewn in Mexico or Columbia and the finished good is shipped across the globe.
In this 20 year fashion industry low. Only the labels that set this standard and provide affordable prices will succeed.
Ultimate responsibility lays on the Quality Control standards of the label. High standards, onsite inspections, color, material, and construction approvals, laboratory testing, and a number of other measures should be in place to ensure the quality of the brand. Only the labels that set this standard and provide affordable prices will succeed.