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American Giant and Small Business
February 3rd, 2012 by Nancy

This came across my sights the other day:

How American Giant Hacked the Supply Chain

For years, it was cheaper to produce goods overseas. But Bayard Winthrop believes that’s changing, in part because of one big culprit: The Internet.

“There’s a general growing comfort level with not only consuming online but buying things like shoes and apparel online,” says Winthrop. “I think one of the reasons we’re so excited about what we’re doing is that we’re in a new time now in that for the first time you can begin to really assess the non-manufacturing related costs. Even two years ago you couldn’t do that.”

American GiantIn a nutshell, start-up clothing manufacturer American Giant, which opened its ‘doors’ this week, is doing the improbable – high quality, reasonably priced, American made clothing – by only having them available online, thereby short-circuiting the overhead of retail space, distribution, and everything else that goes into getting products into traditional brick & mortar retail.

Market forces and cultural forces have conspired against US garment manufacturing for decades.  However, with that loss has been the unfortunate loss of quality and durability.  Sociologist Julie Schor has verified what many of us have assumed for some time: garment prices have flatlined or dropped in the last 20 years, in large part due to cheap overseas labor but also because of cheaply made, low quality materials and deferred environmental costs. We therefore buy many more garments now than we did in the early 90’s, partly in response to the lower (real) prices, but also in part because of diminished quality and durability – the old saw “they just don’t make ‘em like they used to” is quantifiably, verifiably true in the garment and other soft goods industries.

Thanks to the reach of the internet and the comfort level we have achieved with online shopping and financial transactions, however, it’s very possible to do an end-around the biggest costs of bringing a new item to market – namely, renting retail space, hiring and training staff, or hiring sales reps to shlep your shiny new thing to stores in hopes they will add it to their inventory.

I’m really delighted to see this hit the big time, and I strongly encourage you to take a look at the link in the title of the quote above – there’s a succinct video demonstrating the plight of, and the hopefully bright future for, American manufacturing.  The U.S. is full of the hand skills, the machinery, and most of all the people who can, simply put, manufacture great stuff.

I’m also compelled to say, “It’s about time somebody else caught on to what we at Lunchsense have been doing all along, and why.”

After the design for Lunchsense lunchboxes came into being and I realized I wasn’t the only person on the planet who needed a better way to pack lunches, I started scouting around for local manufacturing.  I hit paydirt with Oregon Sewn Products – they are the right size in the right place and the right price, and wonderful, entertaining individuals to boot.

It’s noteworthy to temper my enthusiasm with a shot of reality, though.   If everyone were to do what American Giant is doing, it would be at the expense of American retailers.

I do manufacture a fair number of my lunchboxes in Vietnam, at a factory I visited (trip of a lifetime!) and vetted for its labor standards, working conditions, and environmental initiatives.  I’m pleased to say the factory not only passed muster but holds SA8000 certification.  Yes, the lunchboxes I manufacture overseas cost me far less than the US made lunchboxes.  They do allow me, however, to sell lunchboxes to stores, which then can sell them to you, which allows us both to make an appropriate profit in the endeavor. In other words,

I manufacture in the U.S. (and support a local manufacturer) —–> I sell to you, directly, on the internet

I manufacture overseas —–> I sell these lower cost (but identical quality) items to stores (and support a local retailer) —–> they sell to you.

Doing it this way allows me to support both U.S. manufacturing AND U.S. retailing.  I wouldn’t want to cut either business type out of my model. There are plenty of folks who just want to buy a lunchbox off a store shelf, and I am happy to meet their needs.  There are plenty of others who are fine with buying things online, and I’m here for them too.

Lastly, note that if you want a lunchbox assembled in the U.S., just say so in the comments field when you place your online order, and I promise you will get exactly that.

I wish American Giant all the best, and I really hope they succeed beyond their wildest dreams, because their success is my success, and ultimately, yours as well.       


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