Is making clothing in the UK really more expensive?

We don’t think so, and show you why…

There is an article written by Kate Hills, Make it British that suggests:

There is a myth that making clothing in the UK is much more expensive than manufacturing overseas. We’d like to dispel that myth and show you why that’s not the case, even on simple products such as T-shirts.

Let’s first start by looking at all of the different costs associated with making a good quality, branded T-shirt that retails for £25.

The average manufacturing cost for that T-shirt in the Far East, making a small quantity of a few hundred pieces, is around £4.24*. That price includes the fabric, cutting and stitching of the garment, labelling, pressing  and packing, and the factory overhead and margin.

The same T-shirt made in the UK is around £8.85. It’s seems like it’s more than double, but hear us out!

When clothing is made overseas there are several other costs that need to be taken into account before that product is ready to hit the shop floor.

Shipping and duty can be as much as £1.75  on a simple T-shirt, depending on the size of the order. And if the brand is buying through an agent they will take their cut too.

So now you get to a more likely cost of £7 for the Far Eastern-made T-shirt, compared to the £8.85 for the British one.

But it doesn’t stop there.

Retailers traditionally work on a profit margin of around 60% on a branded item when they sell it in their stores. A simple way to work that out is roughly double the wholesale cost plus VAT.

The problem is that retailers have to take into account the fact that not all of the product that 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 lies the problem.

With average order times from the Far East being around 12 weeks from when a buyer places an order, often the product sitting on the shelves is not what the customer wants to buy. So traditional retailers have 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 into its own.

For the full article and the pictures, please click HERE