`` Made in America '' is a phrase rarely seen in the apparel industry . And while many clothing companies rely on retailers to distribute their products , one apparel company is steering clear of store fronts and selling their American-made clothing direct to consumers . Smart Business meets Bayard Winthrop , founder of San Francisco-based American Giant . CNN : American Giant has no stores or marketing campaigns , and is sold strictly online . How do you compete with other manufacturers ? Bayard Winthrop : One of the big , dirty secrets in the apparel industry is that so much of the cost of what we pay for in our shirts and our pants is chewed up in distribution costs and big traditional marketing budgets . We 're entering into a time where consumers are caring less and less about the corner store , the mall store and big traditional marketing budgets . What American Giant is trying to do is not invest in those things and invest much more in the things that matter to customers and putting a lot of money into materials and into craftsmanship and into American-made products , so it really is looking at trying to be a part of this whole new wave of e-commerce . CNN : More than 97 % of apparel sold in the US Is made in other countries , and eight out of 10 shoes bought in the US are made in China . Why is this ? BW : One of the great misconceptions about the cost of American-made manufacturing versus the cost of manufacturing overseas is that I can pay a worker overseas something less than what I could pay an American worker . And that 's true . But what 's lost in that very blunt analysis is if you think about what it takes to manufacture well overseas , there 's a lot of distance , a lot of language barriers , a lot of time differentials , a lot of quality controlling that you 're doing online or on the phone that you 're not doing in person . If you actually monetize all of those things , I think that the difference between manufacturing overseas and manufacturing domestic is actually a lot less than most people think . CNN : What benefits do you see by having your entire manufacture-base in the US ? BW : By having our supply chain domestic it means that we can very easily be in very close contact with the people that are growing our cotton , spinning our yarn and making our garments . CNN : What are the challenges of having an online-only store ? BW : One thing that traditional retail does pretty well is having a whole bunch of stores out there , which gets the word out easier . It 's a vehicle to get the brand messaging out there . We rely on word of mouth . We rely on selling a sweat shirt to somebody that thinks it 's of such high quality and we 're standing for something that matters to them that they in turn will talk about it and become a fan and be loyal . We fundamentally believe that at the end of the day , it comes down to the product , and if you build a great product , customers are going to say : ' I 'm gon na pick up the banner and talk about the brand and talk about the business . '
Manufacturers American Giant produce all of their clothing in the United States . Comment: American Giant shuns traditional marketing campaigns for an online store .