With the ongoing Trade War with China continuing to be a nuisance, many American apparel companies are faced with the decision of whether or not they should continue to outsource production and materials from China and risk the impact of higher costs or simply look for suppliers someplace else and risk hurting their supply.
As it stands, imports from China are currently being taxed as high as 25 percent. The increased tariff on top of consumer pressure on cost, has caused a decline in apparel businesses’ margins. 40 percent of all clothing and 70 percent of shoes sold in the United States are made in China, according to The Wall Street Journal.
Despite there being alternatives to Chinese suppliers, switching vendors is not as easy as it sounds.
Changing vendors can take up quite a bit of time and effort and could disrupt how your current business is being ran, leading to cash flow challenges. But on the bright side, changing vendors could also provide a business with a fresh perspective and new designs and find a new source of a higher quality materials.
To learn more on how to minimize the negative impact on cash flow, click here.
