There is this belief that manufacturing clothing in the UK is much more costly than manufacturing overseas, however, most experts in the industry deny this fact and there are certain examples to buttress their point. For one, the average manufacturing cost for a £25 T-shirt in the Far East is around £4.24, based on figures from Fashion Revolution, which may be a little on the high side.
However, this price includes the fabric, cutting and stitching of the garment, labelling, pressing and packing, and the factory overhead and margin. Howbeit, the same T-shirt made in the UK is around £8.85. It seems like it is more than double. But you should also note that when clothing are manufactured overseas, there are various other costs that need to be taken into account before that product is ready to hit the shop floor.
For example, shipping and duty can be as much as £1.75 on a simple T-shirt, depending on the size of the order. Also, if the brand is buying through an agent they will take their cut too, then everything is more likely to cost around £7 for the Far Eastern-made T-shirt, compared to the £8.85 for the British one.
Meanwhile, retailers in the UK traditionally work on a profit margin of around 60% on a branded item when they sell it in their stores. An easier way to work that out is roughly double the wholesale cost plus VAT. But retailers have to take into account the fact that not all products they buy sells at full price.
The average sell-through (the amount sold at full price) on a fashion product is around 60%. High-fashion seasonal colours and styles can have an even lower sell-through, especially when the buyer has had to predict the trends months in advance in order to place an order with a Chinese factory. And therein lays the problem.
Traditional retailers are expected to factor this into their pricing, with around 40% of clothing making no profit for them at all. Having product available when a customer actually wants it is where sourcing locally comes handy.
This is why some of the fastest growing fashion retailers such as Asos and Boohoo manufacture some of their clothing in the UK. Just imagine that the average sell-through rate of a T-shirt which was bought within four weeks of going on sale is 80%. The wholesale price of the T-shirt may be higher, but if only 20% of the product goes in the Sale, then the retailer actually makes more profit.
Even though it is not strange for UK-made brands to have a sell-through rate of 100%, however, when they are selling online and able to analyse reactions on the product via a channel such as Instagram, brands can make or order within a week. So every piece that they make sells at full price, especially since they have exactly what the customer wants, when they want it.
Have it in mind that the above illustration doesn’t even include other hidden costs of buying overseas, such as flights to the Far East or courier bills for sending fit samples backwards and forwards until the product is correct. Howbeit, one of the benefits of brands manufacturing in the UK is that they can have close contact with the manufacturer, and therefore can avoid expensive sampling and manufacturing mistakes.
Factors That Influence The Cost of Manufacturing Clothes in the UK
Indeed there are many variables to consider when calculating your manufacturing costs. Each design choice you make is going to affect your manufacturing costs in a different way.
Your Manufacturers and Suppliers
First have it in mind that every clothing manufacturer in the world is different from another. Every supplier charges for their fabrics and materials differently. Clothing manufacturing companies operate in different countries and under different regulatory environments.
They have different policies from one another and their operational costs vary. They have different equipment and workers, and they always have different interests. However, it is essential to understand that just because a manufacturer has sewing machines doesn’t entail they can or they want to produce what you’ve designed.
Most manufacturers prefer to produce a few styles of garments. Also, the equipment they have impacts what they choose to or can produce. It simply means that not all garments can be produced with the same sewing machine. Indeed, your manufacturing costs will always be dissimilar from one manufacturer to another.
Choice of Fabrics and Materials
Also note that your choice of fabrics and materials will play the leading role in how much your clothing costs to produce. Indeed there are so many varieties of fabrics and blends. Your choice of fabrics will directly impact your manufacturing costs.
For instance, let’s say you are making women’s swimwear. It is mostly made from Lycra or some other synthetic fabric. First, you need to understand that Lycra comes in different varieties, blends, and qualities. There are locally produced, regionally produced, and imported varieties.
Also imagine the encompassing varieties of buttons, zippers, clips, clasps, grommets, draw strings, nuts, bolts, sequin, jewels, straps, bands, and whatever other materials that are used in clothing manufacturing.
Your choice of zipper can mean the difference between pennies or dollars. In addition, suppliers always require purchases to be made in MOQs. Depending on what you choose, the total quantity of pieces will impact your budget and total manufacturing costs.
The Style and Complexity of Your Clothing
Have it in mind that there are literally hundreds of styles of clothes out there. Whether you are designing swimwear or street wear or resort wear or winter clothing or socks, each clothing category has subsets of possible styling, features, and elements, materials, and fabrics options.
Note that the more complex an item of clothing is to make, the longer it is going to take to make it. This is one of the initial things a manufacturer is going to consider when calculating how much it costs to produce any clothing. Indeed, manufacturers have to make money. They more or less think in terms of number of completed pieces per hour. And the faster they can produce clothing, the better it is for them.
Just imagine for a moment, how long do you think it takes to produce a t-shirt versus a custom sequin dress? If the t-shirt costs £5 to produce and the sequin dress costs £50 but the dress takes four days to make, which option do you think the manufacturer will choose? In four days, the manufacturer can produce thousands of t-shirt.
It simply means that the more complex your clothing’s styling and designs are, the more they will charge for its manufacturing time. Most times, manufacturers are interested in simple clothing with large quantities because it keeps their factory busy and they can meet their sales targets more easily.
Dyeing, Printing & Embroidery (Embellishments)
There are so many techniques that manufacturers can employ to achieve great results. And each technique comes with its own associated costs. Often, this impacts your final total order quantities – they go up. Note that not all manufacturers can produce prints or dye fabrics.
Some don’t have their own fabric printing or dyeing facilities and need to outsource the workload to third parties. There are three types of fabric suppliers that you may come across when producing your clothing.
Types of Fabric Suppliers
There are retail suppliers that the average consumer visits when buying a few metres for their DIY projects. Their prices are more or less at the highest retail prices but you can buy a little at a time. There are also distributors that factories contact to stock up their supplies.
These businesses have mid-sized MOQs but much better pricing than retail suppliers. Finally, there are the textile producers themselves. Their MOQs are more or less high and we find that we only ever approach them when we need to procure more than 9,000m of fabric.
Indeed, it can be quite hard to answer the above question unless there are a great number of details about the clothing you want to produce. The manufacturer that is contracted, the complexity of your clothing designs, the supplier that your fabrics and materials are acquired from, the fabrics and materials that you decide to use, and how you choose to embellish your fabrics all play a primary role in knowing your final production costs.
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