What is the practice of manufacturing clothing or accessories in a foreign country to benefit from lower labor costs called?

The practice of manufacturing clothing or accessories in a foreign country to take advantage of lower labor costs is termed off-shore production. This approach allows businesses to reduce production expenses significantly by utilizing regions where labor is more cost-effective. By shifting manufacturing operations to countries with cheaper labor, companies can enhance their profit margins, remain competitive in the market, and potentially offer lower prices to consumers.

The concept of off-shore production is rooted in globalization, which enables companies to tap into international markets for both sourcing materials and producing their goods. This method is particularly prevalent in the apparel and accessories industry, where labor-intensive processes can drive up costs if conducted in higher-wage countries.

In contrast, on-shore production refers to manufacturing within the same country where the company is based, focusing more on the benefits of speed, quality control, and supporting local economies. Domestic production involves the same principles, emphasizing the production of goods within the nation. Overseas production is often used interchangeably with off-shore production, but it does not specifically emphasize the cost-reduction aspect associated with labor.

Ultimately, off-shore production is recognized for its strategic advantage of leveraging lower labor costs while balancing other potential factors such as lead times, quality control, and supply chain logistics.