The One Tip You Need to Know to Get Your Clothes Made for Cheap
When James Perse launched his upscale basics line in 1994, he was manufacturing locally in Los Angeles. But as the brand grew, those high California production costs began eating away at margins. By 1999, James relocated production to lower-cost factories in Mexico and Peru.
If you want to produce affordable apparel without sacrificing quality, you need a smart sourcing strategy. Manufacturing in your home country may not be the most budget-friendly option anymore.
In this comprehensive guide, I’ll share the top mistakes brands make when sourcing low-cost production, and how to avoid them. The number one tip? Leverage overseas sourcing experts, like our apparel manufacturing partners at Jack & Jeans.
Mistake #1: Assuming Your Home Country is the Most Affordable
With historical expertise in garment production, the United States and other developed countries were once clear choices for manufacturing apparel. But key factors have now dramatically shifted the math when it comes to production costs:
One of the biggest drivers is labor costs. For example, average hourly wages for garment workers in Los Angeles are around $15 USD per hour including benefits and taxes, compared to under $3 USD per hour in countries like Vietnam, Bangladesh, and Pakistan.
For a brand producing 50,000 units per year, that difference in wage rates alone results in over $150,000 higher annual labor costs by manufacturing in Los Angeles versus Asia.
Government regulations around safety standards, worker rights, and environmental practices also add costs in developed countries that emerging markets lack.
Strict quality control audits, fire safety installations, and chemical disposal processes all require additional investments that drive up per unit pricing. Local factories invest heavily in compliance to meet expectations.
Lack of Large Factories
The apparel manufacturing exodus also means far fewer factories left locally, especially for mass production. Limited capacity allows remaining local producers to charge premium pricing.
Overseas in apparel hubs like Bangladesh, Pakistan, and Vietnam, thousands of factories fiercely compete for contracts on cost, quality and speed.
For a startup brand hoping to achieve scale, relying solely on limited and expensive local options poses a risky bottleneck.
Mistake #2: Only Looking at China for Production
For years, China was the default option for low-cost, high-volume manufacturing. But with the country's rapid economic growth, costs have risen dramatically.
Average factory wages now exceed $3.50 per hour including benefits. Compliance audits and environmental regulations also continue tightening. As production costs climb closer to U.S. levels, the savings advantage has shrunk.
Savvy brands have started moving production outside China to lower-wage countries like:
With average wages under $2.50 per hour, Vietnam has emerged as a manufacturing rival. Major brands like Nike, Uniqlo and Patagonia now produce apparel in Vietnamese factories.
Bangladesh offers rock bottom labor rates under $1 per hour in factories with massive production capacity ideal for high-volume basics and t-shirts.
Pakistan combines competitive pricing under $2 per hour with high quality craftsmanship and vertically integrated factories perfect for cut-and-sew apparel production.
Don’t get stuck thinking China is still your only option today. The manufacturing landscape has changed.
The One Tip: Work With an Overseas Sourcing Agent
Securing legitimately affordable overseas production on your own is extremely difficult as a new brand. That’s why the number one tip is partnering with a sourcing agent.
Sourcing experts act as your liaison, with the knowledge and existing factory connections to ensure you get the best pricing and value globally.
Existing Trusted Factory Relationships
Agents like our partners Jack & Jeans have put in the legwork visiting hundreds of factories across multiple countries to build a qualified supplier network.
These close vendor relationships allow them to negotiate pricing lower than you could ever achieve as an unknown startup. Factories provide preferential pricing knowing the agent will keep them busy with ongoing orders.
Manage Logistics and Compliance
Agents also handle product development, raw materials selection, compliance auditing, shipping and duties to optimize the entire supply chain for cost efficiency beyond just factory unit pricing.
Navigating the countless complexities of global import/export and regulations is far smoother with an expert managing the process. Mistakes and shipping delays can rack up huge unexpected costs.
Total Landed Cost Analysis
Responsible sourcing agents analyze total landed costs across materials, logistics, duties, labor and overhead. Rather than fixating on factory FOB prices alone, they identify your most cost-effective option based on total out-the-door costs per unit.
With an agent as your overseas production liaison, you get the lowest feasible manufacturing costs.
Mistake #3: Sacrificing Ethics and Quality for the Lowest Bid
The temptation when sourcing overseas is choosing whoever offers the cheapest facility price. But a blind focus on bargain costs above all else can be disastrous.
Vet for Product Quality
Reputable agents thoroughly vet potential factories on product quality, not just pricing. They review factories' capabilities to meet your technical specifications and sample standards before recommending partners.
Rushing into a cheap factory unprepared leads to production errors and reproducibility issues. Without due diligence, achieving consistent sizing and construction can be impossible.
Prioritize Ethical Practices
Responsible agents also inspect social compliance records, interview workers on fair treatment, and review wage levels and overtime policies.
Some countries still have issues with child labor, unsafe facilities, excessive overtime and more. But many modern factories meet high ethical standards - if you take care to vet.
Never choose a factory based on bargain pricing alone. Make sure your savings aren't coming from cutting corners that could seriously damage your brand down the line.
Mistake #4: Underestimating Hidden Costs Beyond Unit Price
Comparing factory bids primarily on the surface level per unit cost is shortsighted. Additional fees throughout the supply chain can markedly swing the true total expense.
One factory may offer units for $5, but use flimsy fabrics that compromise quality and lead to higher defects. Another charges $6 for units crafted from durable textiles with lower rejection rates.
Higher material costs can reduce headaches down the line - like disappointed customers and expensive reorders after complaints. Don't let units prices blind you to other variables.
Air freight can run $5-10 per kg. Ocean shipping fluctuates dramatically but expect $2-4 per kg. Duties often cost 10-20% of product value. It all adds up fast.
Reliable sourcing partners have preferred rates negotiated with freight forwarders. But customs and shipping fees can still make an apparently cheap factory price quickly balloon.
Development & Sampling Costs
How many rounds of sampling revisions are required to refine fits and specifications? Simple styles with established factories may require just 1-2 rounds of samples costing a few hundred dollars.
More complex products with new partners often need 4 or more lengthy sample iterations that run over $1000 in refinement before bulk production.
These development costs all impact the total landed cost per unit. Basing decisions purely on factory pricing leaves money on the table.
How Sourcing Agents Save You Money
Leveraging sourcing experts is the #1 tip for accessing affordable production because they remove expensive headaches and blindspots.
Focus on Designing Great Products
With a sourcing partner managing your manufacturing, you can devote time to what matters most - perfecting your product without production distractions.
Avoid New Brand Markups
Factories often inflate costs for unfamiliar first-time brands. But agents aggregate orders across clients for better leverage.
Get Expert Design Refinement
Agents collaborate with your team to refine manufacturing specifications for consistency and cost savings.
minus Logistics Complexity
Let your agent handle freight negotiations, shipping logistics and import duties - costly distractions for lean startups.
Mitigate Quality Issues
Extensive factory vetting and oversight by agents reduces headaches from defects and reproducibility problems.
As you scale up apparel manufacturing, producing cost-effectively is essential but challenging. Pitfalls and blindspots abound for new brands.
The smartest move is partnering with seasoned overseas sourcing advisors like Jack & Jeans. Their expertise removes headaches so you can focus on designing great product.
Stop leaving savings on the table or sacrificing quality in the name of low costs. Lean on sourcing pros to finally get your apparel made affordably.
What steps should I take before reaching out to a sourcing agent?
Develop detailed product specifications and tech packs for the styles you want to manufacture.
Create a production timeline mapping out design completion, sampling and bulk production milestones.
Make initial capacity estimates for order quantities so the agent can source appropriate factories.
When does it make sense to produce locally vs. overseas?
For lower volumes where frequent oversight is needed, local may be best. Once you require large production runs, overseas factories become more cost-effective.
How can I vet potential sourcing agents?
Ask for client referrals and case studies. Review their factory inspection standards. Meet in person if possible. Ensure alignment on cost, quality and ethics priorities.
Should I sign an exclusive agreement with one sourcing agent?
Exclusivity is not always necessary. But agents may offer better pricing with a commitment to allocating a majority of your production volume through them.