The main thing we see happening in the apparel industry is the return to America! (North America that is**). While a lot of brands took their production business overseas to China in the past few decades, the benefits of doing so have begun to diminish in some ways. Now let me be clear, there are some VERY tangible benefits of still doing business in China; however, that being said, we have noticed a shift in the desire of brands to have their apparel designed, produced, and fulfilled from the good old U.S.A.
**Disclaimer: the mention of “North America” alludes to our counterparts to the south, Mexico. There is a massive move to Mexico, which I will get to in a minute.
This Article is broken up into 3 parts:
- What’s going on in China?
- Why brands are coming back to the USA
- Is Mexico the New “China”?
So what’s going on in China?
Some of the major problems with international business in China are still present today, but we’ve noticed that people are just tired of dealing with it. Whether it’s long lead times, reliability problems, mismatched cultural calendars, or language barriers, doing business overseas still requires a specific “know-how,” that if you lack, will be the greatest threat to your brand. Long being criticized as the cheap labor solution to increase businesses margins, the China play is less popular and comes under more scrutiny now than it has in recent history. Point the finger at our political climate, environmental climate challenges, or general disagreement about sending jobs overseas; it’s just not as popular as it once was. And this REALLY matters in a buying culture that cares about where their goods are made, who makes them, and what it’s made of! More than ever, buyers are conscious of their spending power and connect it to things. In the end, I don’t think China is going anywhere, but there has for sure been a change. Keep reading, the next 2 parts are equally important to you if you’ve already read this far.
Brands are coming back to the USA?!?
Simply put, yes. In addition to brands leaving China for a better experience, the USA is taking pride again in what we make. Suppliers are proud to demonstrate their love for the product and the people who make them, by creating new jobs, new styles, stretching technological boundaries, and marketing “MADE IN USA” with the same puffed out chest that ruled the World War II days when everyone showed up each day to work hard and work for each other. It helps that distaste for the China production fans the flames a bit.
Also, the on-demand business model has helped brands do the heavy lifting here in the states while keeping the production here too. Recently we spoke with an on-demand textile printer who has been in North Carolina since 1930, is run by the 5th generation of family members, and is up to more than 1 Million square feet of Made in USA factory space. Longevity is still here and scaling with market needs.
Another familiar name, Zazzle, recently centralized their third party printing and moved all those machines, and operations to Reno, NV. In San Diego alone a local Zazzle subcontractor moved all its machines to the new factory. At their peak, they pumped out 30,000 prints per day (posters, pillows, t-shirts, mugs, keychains, and the like). That may not seem like much in an industry that makes billions of units per year; however, this is just 1 warehouse, from 1 company, in 1 city, that was part of 1 decision to stay in the USA. When you multiply all the various aspects of apparel printing with all the markets this industry serves, there are hundreds of millions of units still here, and here to stay!
Is Mexico the new “China”
…Kinda. The real answer depends on your company’s position in this industry. Ask yourself the question: “What are my expectations if we move our production to Mexico?” Technically speaking, any apparel you’re making in China can also be made in Mexico. Here are a few key benefits of coming to Mexico:
- You will avoid crossing the Pacific Ocean with your freight.
- Labor is still less than the USA, and might only be slightly higher than China – BUT – offset by distance and cost to transport goods.
- Being in San Diego makes working with Mexican companies very easy. Most have a US Office and bilingual staff. There are rarely language barriers.
- A lot of household brand names have their apparel done in Mexico: Hurley, Disney, Mattel, Marvel, Coca-Cola just to name a few.
The prime example of Mexico production with Made in USA standards is our mass volume printer. With a 200,000 square foot facility and more than 700 employees, this company knocks out 1 Million Shirts PER WEEK. Owned by a US entity and operated in Mexico, they offer the size, scale, speed, price, and quality that’s necessary to make it to the retail shelves of the giants like Wal-Mart, Sears, Kohls, etc…
To summarize, this year has a noticeable shift in mentality about where companies are doing their business. While there will always be pros and cons about producing in ANY COUNTRY, it is vital that you seek the counsel of a professional who is entrenched in the apparel industry daily. For all, you DIYers out there, good luck. When you’ve reached the end of your patience, give us a shout, we’ve helped folks like you too!