Would You Pay $80 for a T-Shirt? The Cost of Fully American-Made Clothing
Written by
Angela Mae
Edited by
Levi Leidy
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
The average American household spends $655 annually on women’s apparel and $406 on men’s apparel, as per the U.S. Bureau of Labor Statistics. Add to that the typical yearly costs for children’s apparel ($87 for girls and $96 for boys) and footwear ($208 for women’s footwear and $147 for men’s), and you’ve got a pretty hefty annual sum.
These prices don’t take into account where the clothing (or shoes) were made. But if you were to consider only the cost of American-made clothing, chances are the total spending would be much higher.
What is the cost of fully American-made clothing? And what factors go into the overall price?
A $20 T-Shirt Could Cost $50 or $80
Many of the lower-priced clothing items you find at the store (like Target or Walmart) would be much more expensive if they were produced and distributed solely in the U.S. A $20 shirt, for example, could cost well over double that amount.
“For a fully American-made T-shirt with a $20 production cost, the retail price is typically set using a 2x to 2.5x markup over production cost,” said Jeanel Alvarado, retail expert and founder and CEO at Retailboss, an international retail publication, education platform and consultancy. “[It] would be $50-$80 to cover wholesale and retail margins, overhead and profit.”
Factors That Go Into This Higher Cost
Unless you’re a retail expert, you might not think about everything that goes into the sticker price of the clothes you buy. However, the following five factors go into the retail price of fully American-made clothing:
- Fabric and materials: What’s the quality of the garment? What kinds of materials are needed?
- Quality of workmanship: Is the apparel made to last?
- Labor required in production: How much labor is involved? What are the typical wages where the garment is being made?
- Sales structure: What’s the competition like? What kind of price-control measures are in place?
- Showroom (or store) costs: What’s the price of overhead?
In particular, it’s worth considering fabric quality and local labor prices.
“Higher-grade fabrics like premium or organic cotton cost more. So, this could drastically influence a [T-shirt’s] final cost,” said Alvarado.
As for skilled labor, prices are usually much higher in the U.S. than they are in, say, China. According to Alvarado, you could be looking at labor prices up to 10x as high in the U.S. as you’d find overseas. A shirt that costs $2 to produce in China might cost $20 to produce in the States.
So, would you pay $80 for a T-shirt that might have only cost $20 if it was made outside the United States?
More From GOBankingRates
Sources
- Jeanel Alvarado, Retailboss
