Which Apparel Sourcing Factors Matter?

Key findings:

The apparel sourcing formula is getting ever more sophisticated today. US fashion brands and retailers consider a wide range of factors when deciding where to source their products. The long list of sourcing factors includes #1 Capacity, #2 Price & tariff, #3 Stability, #4 Sustainability, and #5 Quality (see the table below).

When evaluating the world’s top 27 largest apparel supplying countries’ performance,  no souring destination appears to be perfect. In general, fashion brands and retailers have many choices for sourcing destinations that can meet their demand for production capacity, price point, and quality. However, fashion companies face much more limited options when seeking an apparel sourcing destination with a stable financial and political environment and a strong sustainability record.

When we compare the trade volume and the performance against the five primary sourcing factors:

  • Apparel sourcing today is no longer a “winner takes all” game. Notably, the factor “Capacity” is suggested to have limited impacts on the value of apparel imports from a particular sourcing destination.
  • Apparel sourcing is not merely about “competing on price” either--the impact of the factor “Price & tariff” on the pattern of apparel imports statistically is not significant.
  • Improving financial and political stability as well as product quality can help a country enhance its attractiveness as an apparel sourcing base. In particular, American and Asia-based fashion companies seem to give substantial weight to the factors of “Stability” and “Product quality” in their sourcing decisions.
  • Fashion companies’ current sourcing model does not always provide strong financial rewards for sustainability. Interestingly, the result indicates that a higher score for the factor “sustainability” does NOT result in more sourcing orders at the country level. Behind the result, fashion companies today likely consider sustainability and compliance at the vendor level rather than at the country level in their sourcing decisions. It is also likely that sustainability and compliance are treated more as pre-requisite or “bottom-line” criteria instead of a factor to determine the volume of the sourcing orders. 

In conclusion, fashion companies’ sourcing decisions seem to be more complicated and subtle than what is often described in public.

By Emma Davis and Sheng Lu

Further reading: Emma Davis & Sheng Lu (2021). Which apparel sourcing factors matter the most?. Just-Style.

Author: Sheng Lu

Professor @ University of Delaware

2 thoughts on “Which Apparel Sourcing Factors Matter?”

  1. I read the article (“Which apparel sourcing factors matter the most?”) at Just Style and I was very suprised seeing that Turkey is classified as “poor” according to sustainability parameter. When I compare the “acceptable/good” classified countries (such as Cambodia, Ethiopia, Haiti, Jordan) with Turkey, this rating seems very unfair and very superficial. Could you please explain for which reasons do you rate Turkey poor? Because Turkey is the 6th biggest clothing exporter in the world and I am sure that the factories in Turkey are more compatible with sustainability/compliance standarts when compared to all other countries in the table.

    1. Thank you for the comments. It is not our personal assessment—the calculation is based on the inputs from the database. These inputs are collected from experts anonymously. Personally, I find the evaluation for “Sustainability” the most challenging one as there is a lack of unified standards and scope.
      Also, the purpose of our study is not to evaluate the sourcing performance of each individual country. Rather, we want to see in the aggregate which sourcing factor is most influential to the trade flow changes.

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