How we can keep small manufacturing “Made in the USA”
Buying American-made isn’t just about sustainability — it’s an opportunity to invest in quality and community, says Rob McMillan, founder of the direct-to-consumer clothing brand Dearborn Denim.
Small business manufacturing has seen a resurgence in the U.S. in the last decade or two. A lot of that is fueled by direct-to-consumer and social media trends. Much capitalizes on the “Made in the USA” or “designed locally” labels as selling points. But can the momentum continue? Rob McMillan runs a small, blue jean d-to-c manufacturer in Chicago. He says it’s a constant struggle, but he hopes that people will continue to place a premium on good products, made locally, that last.
Matt Carmichael: How important is the role of “Made in the USA” and how do you see that changing in our polarized world?
Rob McMillan: “Made in the USA” is always important. It isn't just nuts and bolts. It's another source of jobs for U.S. workers; we need more options than desk jobs or the service industry. I know there are some fancy economists who say you can get the same product overseas for cheaper and you're supporting wages in, let's just say, Bangladesh, and there's truth to that. But I think it's okay to say as an American, I prefer to support jobs in the USA, I align with this person more just by living in the same area as them.
Carmichael: Does the sustainability of a shorter supply chain also play into the appeal?
McMillan: I'm always concerned when people are making greenwashing statements of “this is more sustainable than that,” but there is something to having goods move fewer miles, right? Freight is a significant source of CO2 emissions. Yet, I don't know if I'm fully convinced that that’s an argument I would make as to why you should buy local. I haven't done any studies on whether our jeans have a lower carbon footprint than imported jeans.
Carmichael: Other apparel companies totally make that claim.
McMillan: There are questions of economies of scale for manufacturing. Is a big manufacturer going to make a pair of jeans in a more efficient way than a small manufacturer? Yes. We also try and do stuff as efficiently as possible, But there’s a lot more to it.
Carmichael: Like what?
McMillan: Like, how efficient is your fabric cutting? Do you have 80% or 90% cutting efficiency and is that 10% waste? Is that being recycled? Is that going to a landfill? Maybe the most important one is how long does your product last, right? If you have to buy a pair of blue jeans once a year, or a pair that will last three years, you're consuming less. You're saving money and there’s going to be less waste. I'm much more convinced by that argument. There’s a ton of waste in the apparel industry primarily driven by fast fashion.
Carmichael: How do you balance efforts toward quality and sustainability with profitability?
McMillan: If we don't operate profitably, we go out of business. We don't have venture capital backers or anything like that. Our approach has been to make sure our customers come first. We are competing with the Levi's and the Wranglers, but also Costco jeans, and premium brands.
Carmichael: To what extent do you think “Made in the USA” and sustainability, etc., matter to your customers vs. they just want a nice pair of jeans?
McMillan: A huge portion of the U.S. is just constrained by price. Our jeans are too expensive at $75 for a whole bunch of people. That's one of the reasons why we tried the SVR jean at $39. But it was too low a price point for us at the time to make it work. I want to be able get a product to market at a lower price, but for now we have to stay in the premium tier.
Carmichael: What holds you back?
McMillan: It’s not the jeans, it’s the shipping. We subsidize too much. We're not Amazon. We also offer free exchanges. So that's another $9 out, another $9 back.
Carmichael: That’s a downside of the d-to-c model. But to what extent does that model and social media enable companies like yours to exist?
McMillan: Many other d-to-c brands don't do their own manufacturing. The idea that d-to-c was going to be more affordable than traditional retail is flawed because shipping costs are very expensive. Also, online customer acquisition has become very expensive, because in large part, it’s replaced traditional media. I don’t know if someone starting a business in 2024 will reliably find a lot of success.
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