The garment manufacturing industry may appear lucrative, but the reality is that low profit margins are the norm across the board. The profitable companies are the ones who have figured out who to keep the quality high whilst moving orders through quickly.
 

General Garment Processing Factories

These factories do not have a brand. They simply process foreign or domestic orders, and profits are very low. Foreign trade woven processing factories may only have a gross profit of 5-10%, and they probably also struggle with unreliable staff, and increasingly demanding requirements from customers. Knitting processing plants often have higher profit margins, as they usually produce the fabrics there also but if not, then profits will be similarly low.
 

Foreign Trade Factories

The profit of factories operating in the foreign trade industry is very low, mostly because the competition is very fierce. Sometimes securing an order can come down to 1c difference per unit price. In general, the profit of foreign trade is about 10%, and a large part of it is to be earned from tax rebates, or sometimes garment may even sold at a loss and then the factory can profit from the tax rebates.
 

Factories holding inventory or order backlog

This is a big problem that the majority of clothing factories have to deal with.  After most orders there will be an excess of goods, which causes the factories a headache. This backlog is difficult to manage and the excess inventory is hard to clear. It is often the best strategy to sell at cost price or even at a loss.