In the past five years, manufacturing in the United States has exploded. While the United States has historically had a manufacturing past, we saw a major change to the world marketplace in the 1950s and as we look at the industrial transition, going into the 1970s, 1980s, and 1990s. A competitive market arose when we widened our borders and began to export more globally. It encouraged U.S. businesses and product developers to collaborate with manufacturers in other countries, diversify our talent pool, and gain access to lower-cost labour.Most startups prefer to begin with domestic production, and the rationale behind this is centred on oversight. If you work for an organisation in Los Angeles and live in Miami, it’s certainly better to get into the same time zone or hop on a plane and see what the maker is up to. When you’re producing in another country, and you’re on the phone at midnight or 1 a.m., negotiating or overseeing your distribution in India, China, or other nations, this gets a lot more difficult.

Branding  

When it comes to branding vs. price point, many young fashion startups make the mistake of assuming, “Well, I’m manufacturing my goods here in the United States, so surely I can charge a high price.” That is not always the case. The “Made in the USA” brand mark is a good addition to your industry, but it is not strong enough to build your company on. Your name, how you put yourself, and all of your marketing activities can all be part of your corporate identity. Not just the USA label, but all of the outward-facing customer knowledge and advertised touchpoints eventually become the reason why someone buys from you.

Transparency 

Unfortunately, countries like China and India have a poor name when it comes to large-scale production, and while we can’t guarantee that all factories are compliant, the reputation is undeserved. More and more manufacturers are making a concerted attempt to become more competitive, open, and capable of adhering to even healthier working standards in order for domestic U.S. businesses and multinational labels to do business—and feel confident about doing business—in China, India, and other foreign markets. Although we’re still a long way from complete accountability, this move is a clear sign that the globalised economy is getting more open.

Although sustainability and transparency are essential to your market, domestic manufacturing is not the only way to be sustainable or transparent. In reality, on a more globalised basis, having a solid business model and understanding where the goods are manufactured is definitely possible.

Talent 

When it comes to stuff like talent procurement and finding globalised talent, on the other hand, things like embroidery and getting access to quality silk come into play. Manufacturers who have gained access to certain types of raw materials may consider outsourcing production to China.

The artisan marketplace has a lot to sell in terms of skill sets and experience. In India, for example, some regions specialise in block printing or hand embroidery. When it comes to multinational production, certain nations have local and exclusive skills that you won’t find everywhere else. So, not only do you have the ability to lower the cost of goods by using foreign expertise, but you also have the opportunity to bring a certain essence and genuine authenticity to your products that you wouldn’t get if you produced them locally.

Scalability

When it comes down to it, the cost of products, labour, and productivity should be the primary deciding factors. Companies operating in the United States are more likely to be able to meet lower minimum quantity requirements, so you may be able to find a producer in Los Angeles that can deliver 10 to 25 units per piece. This will be a good place to launch new fashion businesses. 

On the other hand, the requirements for such minimum amounts would be even greater when it comes to overseas export and processing. Suddenly, you’re dealing with 100 to 500 units. And the higher you will sell on a large scale, and the lower your price would be. So, if exporting abroad appeals to you right away, and you can meet the minimums, the cost would be worth it. Your cost of goods will continue to decrease as you scale up. When it comes to scalability, international is a great place to start if you want to increase your benefit and bottom line.

Verdict 

One thing is obvious now that you have an understanding of the benefits and drawbacks. There is no simple solution to the manufacturing issue. Making the best decision would necessitate any in-depth consideration of the brand’s requirements.

Although there are several different approaches to domestic production, the bottom line is that the “Made in USA” name can not be seen as a major differentiator in the industry. Choose to manufacture domestically if it makes sense for other business purposes such as providing oversight, being able to visit the factory, and particularly if you plan to own a manufacturing space in the future. At Scaling Retail, we’ve had some incredible brands that have worked with local manufacturing on a market and acquisition level to take advantage of having domestic and local production— and when they own the whole supply chain, they still have a significantly lower cost of products.

On the other hand, if you want to expand and rise fast, you should consider moving internationally. International markets are the best way to diversify talent, get better cost of products on higher minimum orders, and schedule the output more ahead of time. Many foreign distributors collaborate with the most well-known brands in the market so they can prepare ahead of time to make those partnerships very beneficial to them in the long run.

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