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When is it cost effective To Produce in USA?

Our clients are often shocked to learn that it is sometimes cheaper to produce in United States than overseas so we wanted to record a short video to explain why USA manufacturing makes more sense from an economic and logistics prospective.

There are a few basic cost components such as raw materials, duty, freight and management costs.

Fabric costs comes into play that if bring in garments from outside of USA, there is a customs duty rate, which can make it advantageous to produce in USA. This is a protection against foreign cheap labor as the duty rates can be 18% or higher.

Freight costs have been rising due to the rising price of fuel, so it can be expensive to bring full container from Far East.

The time commitment of producing in the United States as it is crucial for business owners to manage cash flow. Not being able to receive merchandise in a timely manner, causes supply chain inefficiently, which costs money rather than producing here in USA.

Management costs. A trip to Far East trip can easily costs $10,000 per trip. If you figure on 4 trips a year is that is $40,000 so if making 40,000 units, that is an extra $1/unit to produce outside of United States.

Call us at 215-628-2557 if you have questions about apparel manufacturing in United States.

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