How the Dominican Republic is a Cornerstone of American Footwear Companies

Dynelle Skinner | Friday, July 24, 2020 | 0 comments

American companies of all shapes and sizes base their operations in different countries around the world. Whether it's a small company selling embroidered patches that are effective in marketing a business's corporate identity or a large corporation that has retail locations in every state, reshoring allows companies to find diverse talent while cutting costs. The footwear industry is no exception to this trend, with manufacturers for major brands spread across various continents.

How the Dominican Republic is a Cornerstone of American Footwear Companies

Although it is a relatively small country, the Dominican Republic is attracting many American footwear companies looking to reshore. In fact, the DR is a top 10 footwear exporter to the United States. In 2018, the U.S. was the DR's most important export trading partner of footwear and had an export value of about $253 million.

This popularity is made possible by the Dominican Republic Free Zones, a globally-recognized network of 74 free trade zones. The DR Free Zones were intentionally designed to improve business productivity, scale targeted industry sectors, and reduce global business barriers. As the DR Free Zones celebrated its 50th anniversary in 2019, the network has certainly seen success in its goals.

Footwear companies have been particularly successful, especially after the President of the DR created the National Footwear Commission in 2014. This organization helps footwear brands by focusing on supply chain development, the promotion of exports, and strengthening training programs. American retailers deal with about $44 million in inventory shrink, according to statistics from the National Retail Security Survey, but footwear companies that manufacture in the DR Free Zones don't have to worry about lapses in communication that can lead to inventory shrink. When companies reshore to the Dominican Republic's Free Zones, they benefit from high-quality connectivity as well as tax incentives, government support, and the country's political stability.

How the Dominican Republic is a Cornerstone of American Footwear Companies

Global footwear brands that have operations in the DR Free Zones include Timberland, Sperry, Vans, and Allen Edmonds. These brands and others have seen success because of the highly competitive local supply chain that has had an increased capacity for producing most of the raw materials and components manufacturers of footwear and leather products require. The workforce in the DR Free Zones also have a significant amount of skills and specific knowledge when it comes to high-end leather shoes for European and American markets.

While the footwear industry is a major part of the DR Free Zones, other industry sectors have found success there too. From electronics and medical devices to textiles and jewelry, a wide range of sectors rely on the DR Free Zones for their manufacturing needs. The DR Free Zones also provide outsourcing services, such as Business Process Outsourcing and Contact Centers, contributing to a managed services market that was projected to reach $170 billion worldwide by 2019. This service has been particularly helpful for American companies looking to reduce costs and maintain quality, as the DR has a highly skilled workforce and is geographically close to the United States.

As a small country with an impressive incentive structure and vibrant community, the Dominican Republic is proving to be a place that can make things happen. Even if you don't know it, your favorite American footwear company may be relying on the DR Free Zones to get you high-quality shoes. By continuing to support these companies, you can help them and the people of the Dominican Republic prosper.

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