Saturday, July 21, 2012

Business in BJJ: A gi? Made in the US?

I'm genuinely intrigued by the premier of American Gi Company. Not just because a new company hitting the market is fun to watch, but this company in particular has set out to solve the age kinda-old American manufacturing problem. You all know it. The cost of American labor is (relatively) high and that cost gets reflected in products as prices most Americans don't want to pay. Thanks Walmart*. 

That simple relationship drives most gi manufacturers to places like Pakistan, Brazil and Hong Kong, where quality products can be made relatively inexpensively. Gone are the pre-Deming days of poorly made Japanese (and Taiwanese) products, guaranteed to fall far short of their American counterparts. Now, products can be made just about anywhere (except Western Europe and Canada) at a lower price than they can be domestically (yes, even considering transportation) with reasonable quality. This is why the American Gi Company is such a big deal. If they can pull this off at a reasonable price, they will have cracked the Riddle of the manufacturing Sphinx

Manufacturing costs can be a tricky thing, especially overseas. You're constantly playing exchange rates against local taxes against shipping costs against political unrest and myriad other fluctuating costs. One of the benefits of manufacturing in your home country is forgetting that extra level of complexity. I believe the AGC has timed this pretty well. One of the upsides of the drop in the American dollar, of any currency actually, is a decreased benefit in offshoring manufacturing and services. When the EU saw a jump in the Euro a few years back, the US saw European manufacturers moving their factories to our shores to take advantage of an educated, trained work force, stable currency and government and cheaper labor. It's ironic, but part of how the system works. 

I'm chomping at the bit to see the prices of the 1776 model (props to them for focusing their branding around American history and going deeper than just plastering flags on gis) and how it compares to non-US made gis. If they can get a quality product out for reasonable prices, I suspect they'll see some solid success and staying power. 

*I loathe Walmart on multiple levels. 

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