Who doesn’t want to buy products “Made in America”? It’s a designation held in high esteem for creating jobs, embodying exceptional quality and keeping economic spend within the borders of the United States. We also hold it in high regard at NoNetz and we’ve always made it a priority when considering where our clothing is made. However, we’re also forced to balance our income statement with our “Made in America” status in order to operate a business. Otherwise, we can’t continue to help people by making comfortable, sustainable clothes.
In the garment industry, the challenge is twofold. First of all, it’s expensive. Production of swimsuits is exceedingly difficult to automate because fabric stretches and pulls. Without automation, the process becomes labor intensive for a human to manufacture the finished product. And since there is a large amount of manual intervention required, the cost of wage plays a major factor in the overall cost of the shorts. To compound the issue, the NoNetz pattern is complex AND there is a shortage of sewing talent in the United States. This creates a “perfect storm” for high cost because you must pay more for talented workers, above and beyond the rate exhibited by other countries.
So why not just raise the price? This sounds logical at first, but the challenge lies in the fact that the swimwear market contains a price ceiling. There is a relative limit on the price that a customer will pay for a pair of swim shorts. That limit is driven by the market itself (shorts are seasonal, beachwear attire) and in the case of boy’s shorts, they’ll probably be outgrown in a year’s time. So, people generally won’t pay past a certain price point. It becomes cost prohibitive for the customer. This ceiling forces NoNetz up against a wall, where the only direction we can move is…you guessed it…back to managing cost.
This combination of high production costs in America and a product price ceiling truly squeezes the potential per-unit margin we can obtain. The problem is that we don’t rely on that margin to simply cover the cost of production. We need it to scale our business by paying for additional operations, overhead, marketing, sales, and payroll for American workers. Quite simply, without margin, NoNetz can’t grow.
If there was a financial incentive, or reward for businesses like ours to keep operations completely in America, it would allow us to reduce costs and would incentivize other businesses to follow suit (see what we did there?). Not to mention the sustainability impact of keeping products local and reducing carbon emissions. Imagine if we could eliminate the overall footprint of planes, trains and automobiles required to get product to the United States, when produced abroad AND provide financial relief to businesses committed to being “Made in America”?
Currently we manufacture in Massachusetts and Thailand. As you can see, making clothing in America is still a goal for us, but simply isn’t always feasible, and this is the one scenario at NoNetz where we don’t encourage being “under water”. :)