Choose Wisely

When selecting a location for global sourcing, there are many factors that you have to look at. I would either select China or the United States to source a simple cotton t-shirt.

Global Risk

First, you have to look at the global risks of doing business in that country. Some countries are at high risk of social and political stability, like Bangladesh, which is a common place for global sourcing in apparel. Some countries are also at high risk for organized crime, illicit trade, or terrorist attacks. (Executive Opinion Survey, 2014) China and the United States are both locations that are low-risk, making it safer to do business in either of these countries.

Ease of Doing BusinessChina and the United States are ranked the highest in terms of doing business. This means regulations are strictly followed and business runs smoothly. In many developing countries, factories might charge you for delays in production. Developing countries, like Haiti and Bangladesh, also use bribery in business in order to get what they want. (World Bank Group, 2015)

Natural Hazards

It’s also important to know the risk of natural disasters in the country you choose to source apparel. Countries like France and Brazil have the lowest risk, so they would be very safe countries. China is relatively low risk as well but doing additional research doesn’t hurt. You can do research on the city the factory is located in and see if there have been any natural disasters. (Alliance Development Works, 2013)

Human Rights

Human rights is another huge factor designers have to look into. Not all countries pay their workers enough and force them to work in unsafe environments. If you blindly globally source your clothing in a country that neglects human rights, it can destroy your business. Child labor is more common in Bangladesh, Mexico, India, and China. I want to source my cotton T-shirt in China; however, I have to be aware that child labor is very common in this country. This means I will have to carefully select a garment factory that doesn’t support this practice or follows strict regulations. Before officially agreeing to do business with the garment factory, I will state my demands and do surprise visits, making sure all regulations are being followed. The United States is ranked very high in terms of human rights, meaning it would be a more ethical choice sourcing cotton t-shirts. (International Labor Organization, 2010)

Cost of Labor

The United States has one of the highest labor costs and developing countries, such as Bangladesh and India, pay workers the lowest wages. China pays workers approximately $242 per month, which is a happy medium. This is a great country to source apparel, because it’s cheap for designers, but also garment factory workers are getting paid enough money to support themselves. (Doing Business, 2014)

Shipping Time

Another important factor to consider when selecting a country for global sourcing is how long shipping takes. Obviously, if I sourced cotton t-shirts in the U.S., it would be the quickest shipping time opposed to sourcing globally. Bangladesh is becoming a very popular country to source apparel but it takes 57 days total to ship to the States. That’s really important to know before you choose Bangladesh to source your clothing. Shipping time from China to LA is a little over two weeks, which is doable. (Sea Rates, 2015)

Cost to Export

Although, the United States has the fastest shipping, the cost to export is very high. China is the cheapest to export goods from, at only $600-$900 per container. (World Bank Group, 2015) Lastly, you need to look at tariff rates on textiles in that country. For cotton t-shirts, the tariff rate is 16.5% in almost all countries. There are some exceptions, of course. However, if you were sourcing wool or silk, the tariff rates will be different.

Out of all these factors, China and the United States would be the best countries to globally source cotton t-shirts.