system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How can European companies like Zara afford to produce their clothes in places like Portugal and Spain, while American companies rely on sweatshop labour to sell at the same price?
gpt
Zara is somewhat unique in the fashion industry in that it owns its entire supply chain.  Most clothing companies will hire factories to make their clothes according to patterns, and then have a distribution and logistics company handle the process of getting the actual clothes to the country they're going to be sold in, and sometimes also to the individual retail outlets.  This allows economies of scale to come in, for example, a factory making t-shirts for fifty different companies in Bangladesh can make those shirts much cheaper because they can order fabric in more bulk.

So what advantage does owning the factories convey?  Well, there's an element of cost saving in full ownership, the factory and the distributor aren't taking a cut for profit, but the main advantage is quicker turnaround.  If all the factories in your supply chain are set up to supply you and only you, you can set them up exactly how you want them, you can set the rules in the factory you can set the distribution network to prioritise getting you merchandise *fast* instead of *cheap*.  Which means that unlike some companies who have to design their Summer 17 range about a year out guessing based on trends what will be popular in time to get their stuff made and shipped from Asia, a company like Zara can wait til the start of summer, see the trends, design clothes based on those those trends, and have their designs manufactured and in store within a week or two.

What about non-fashion items, though?  Plain t-shirts don't change much at all year to year.  If you buy a red t-shirt, you'll probably be wearing it still in 2 years time.  For those items you don't need speed at all.  You also don't need to be unique.  So for that stuff there's no reason not to order from Asia, and sure enough even Zara will order their bulk non-fashion clothing from those factories.  For stores which specialise in offering cheap clothing (e.g. Primark here in Europe), all their stuff will be made in places like bangladesh because it doesn't need to be fast and it doesn't need to be good, so you can just focus on as cheap as possible.