Retailers vs manufacturers

The majority of apparel production cost is attributed to materials and labor.

Retailers vs manufacturers

In a 2016 article about the true price of manufacturing clothing, Burag Celikian provided the figure of $13.53 for labor and $40 for materials for a cashmere sweater with a retail price of $110. Even though apparel production is very labor-intensive, around the world the actual cost of labor to sew garments, relative to the final retail price, is often a very low percentage.

This is directly related to the wage paid to the people who sew and otherwise assemble the garments, keeping in mind that the United States imports 97 percent of its apparel (AAFA, 2015) and the four largest apparel exporting countries are China, the European Union, Bangladesh, and Vietnam.

As of 2017, the United States imports most of its apparel from China (36 percent), Vietnam (11 percent), India (7 percent), Mexico (5 percent), and Bangladesh (5 percent).

Refer to the table available in the downloads section for wage rates in countries with large apparel manufacturing sectors.

Retailers are often at odds with manufacturers.

For more information on the average monthly wage rates of apparel workers please refer to the attached table available for download below.

These situations present opportunities for ethical dilemmas because working conditions and employee compensation are directly related to the costs of apparel products. With relatively low labor costs in newly developing countries, the cost of labor is actually decreasing as a percentage of a garment’s total cost. As apparel manufacturing has moved to predominantly less developed countries, the price of apparel products has fallen and the products themselves have become more available to members of growing affluent and middle-class markets.