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Saved by uncleflo on November 28th, 2018.
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.
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