Cost of Production

[jhaime]

You also get their agency reps taking a slice of the pie...

so therefore their production costs have to be at a minimum.

There are other methods, for example buying on credit, and paying a slice of the profit back on each single sale..and what you don't sell, you send back.

Then you get newly established labels offering their lines for sale...and taking a commission out of sales on their gear..that's just purely for them to get out there and gain as much exposure as possible, with the boutique taking on no extra risk...

 

[Johnny]

This is how it works in our stores...

250% mark up from the price we buy the line in at...

For example...a pair of Evisu jeans...costing £235...

we'll buy them in for around £15-£20 a pair, depending on what size of order we have and what kind of relationship we have with their agency reps or credit management companies and so forth...it varies from shop to shop...or what part of the world the store is located in relation to the country it's manufactured in.

Regarding the production cost...those 1 pair of Evisu jeans retailing at around £235...you're talking about £2-£3....which is like what...$5-$6

They obviously have all their overhead costs to take care of...

If i stick those jeans on sale at 50% off, we're still making a sizeable profit.

It's the same for the rest of the clothing industry, just a less dramatic % increase.

That's absolutely shocking!!! £15 to £235? Is that the norm? I can't believe that.

 

[droogist]

^ That cannot be normal. jhaime, how many jeans do you have to buy in order to get that price...?

 

[faust]

This is how it works in our stores...

250% mark up from the price we buy the line in at...

For example...a pair of Evisu jeans...costing £235...

we'll buy them in for around £15-£20 a pair, depending on what size of order we have and what kind of relationship we have with their agency reps or credit management companies and so forth...it varies from shop to shop...or what part of the world the store is located in relation to the country it's manufactured in.

Regarding the production cost...those 1 pair of Evisu jeans retailing at around £235...you're talking about £2-£3....which is like what...$5-$6

They obviously have all their overhead costs to take care of...

If i stick those jeans on sale at 50% off, we're still making a sizeable profit.

It's the same for the rest of the clothing industry, just a less dramatic % increase.

I don't believe it.

 

[purechris]

ummmm....where are you getting Evisu at 15-20 a piece. That's unheard of unless you're going through an off price source. Hell, I even got Yanuk jns from an off price source to drive my margins and they were still $30 per pair and the real wholesale price is between $60-89.

 

[jhaime]

Firstly, you do realise that £20 is like...$45-$50...

Secondly, If you're paying that amount for Yanuk then you're literally being taken to the cleaners somewhere along the line.

We stock the whole Evisu range, so therefore we have a contract based form of ordering, it isn't like some retailers who are always waiting around for some extra pairs...

and yea, the production cost of Evisu isn't far off the production price of most 'designer' jeans. It's the other areas, like design, management and agents who contribute to the higher prices.

I mean, Red Dot is made in the same factory as Evisu, yet their prices are 1/5 that of Evisu's.

Maybe now you'll start believing. It's all just one big rip off, yet we love it.

Chris, what? the normal wholesale price is $60-$89 ???

They go down to like $110 in sales...

If you're paying that for them I wouldn't bother stocking them and I know what I'd be telling their agents...:|

 

[Assembler]

This thread is fascinating! I knew that larger more expensive brands were often made in the same factories as lower brand items, so that's really no surprise. But nice to see confirmation of that.

 

[droogist]

Uh...I still don't get it? You said you do a 250% markup...so if you're retailing the jeans for £235 that means you should be buying them at £94 a pair. If you buy them for £20, that means you're selling them at 1200% markup. So is the £15-£20 price you quoted your estimate of the production cost per jean, minus the overhead costs (management, distribution, etc)? Because normally those costs are simply factored into the wholesale price of the merchandise...

 

[bruno]

Firstly, you do realise that £20 is like...$45-$50...

Secondly, If you're paying that amount for Yanuk then you're literally being taken to the cleaners somewhere along the line.

We stock the whole Evisu range, so therefore we have a contract based form of ordering, it isn't like some retailers who are always waiting around for some extra pairs...

and yea, the production cost of Evisu isn't far off the production price of most 'designer' jeans. It's the other areas, like design, management and agents who contribute to the higher prices.

I mean, Red Dot is made in the same factory as Evisu, yet their prices are 1/5 that of Evisu's.

Maybe now you'll start believing. It's all just one big rip off, yet we love it.

sorry, but i don't believe you at all...
a friend of mine is the owner of a shop that carries MiuMiu, Armani and Dolce&Gabbana...all of this labels are working with the same calculation...if the wholesale price of a MiuMiu shirt is 100€ the shop price is 250€...
why should Evisu make such a different calculation and less profit than other labels...
buying something for 20 pounds and selling it for 200 pounds is unbelievable...

 

[Lena]

in anycase, point made is that most boutiques have a X3 or a X2.5 up from the wholesale price.. apart -obviously- from jhaime's boutique

 

[AlexN]

I can totally see this thread turning into a TFS scandal. I can't get enough of this...

 

[AvaMarie]

Jeans

Well, I had some jeans manufactured (14 oz denim) and they cost me appx. $15 per pair. Might be a little low, but I would venture to say that the price range for a high end pair of jeans (manufacturing cost) is anywhere from $15-$45 per pair. Specialized items like beadwork or handpainting or embroidery would obviously make the price go up.


Just my rough guestimate.

 

[Lena]

ava-marie welcome to tFS,
if those jeans cost you $15, then whats your wholesale markup price?
does your wholesale price depend on minimums? (btw, what are your minimums?)

 

[Johnny]

Uh...I still don't get it? You said you do a 250% markup...so if you're retailing the jeans for £235 that means you should be buying them at £94 a pair. If you buy them for £20, that means you're selling them at 1200% markup. So is the £15-£20 price you quoted your estimate of the production cost per jean, minus the overhead costs (management, distribution, etc)? Because normally those costs are simply factored into the wholesale price of the merchandise...

That's exactly what i was thinking. I've heard of the 300% mark up level before and I know people who've bought things wholesale at around a quarter to a third of retain price.

£235 Evisus must be fairly near the top of their price range (apart from silly gold boxed things etc). My guess therefore would be that they're made from narrow shuttle loomed selvedge denim. jhamie says that they're made for £2 or £3. Here's a quote from someone on superfuture:-

"And remember, most jeans require 1.4-1.6 yards per garment on 58" cuttable. If you're getting into 30" cuttable selvedge styles [which I think means narrow width selvedge], you may need 2.8-3.0 yds/gmt. Find a good pattern-maker and sample sewing shop. Nothing's worse than killer fabric in a bad fit!!"

That would mean that the price of the fabric per yard could be less than £1 since this doesn't take into account any other manufacturing costs (thread, cutters, sewers etc) never mind indirect overheads. That just can't be right.

 

[nqth]

So I have just learn in the denim thread that the selvage denim is soo expensive because the fabric is made in a few XIXcentury machines left on Earth. And the fabric itself is very expensive. And now you said might be less than 1 pound an yard. That's just insane.

Ava Marie said that the manufacturing cost is 15 us$ up. plus the cost for fabric, patern, cut and design. Of course distribution... Is the manufacturing the highest part? I assume that the cost might be around 50 us$ indeed.

By "normal" rate the wholesale price is 100 us$ for a 250 us$ "stuff". I assume that the company must be profitable at that price. So 50 us$ cost is pretty "acurate", it makes profit in 100%.

Might it be correct?:-)

 

[joshua n]

Don’t forget shipping cost, agent’s fees, and numbers of employers, owning or renting some of the most expensive property in the world, advertising budgets, fashions shows, press agents, sample collections, and all the rest of the cost. And once you have somewhere to sell it, then there is the cost of the garment

 

[AvaMarie]

ava-marie welcome to tFS,
if those jeans cost you $15, then whats your wholesale markup price?
does your wholesale price depend on minimums? (btw, what are your minimums?)

Hi Lena,

I haven't designed jeans for a while but my minimums from the factory were appx 500 pair per style. They were pretty comparable to Seven jeans. I valued them at a retail of $115/ea. Which made the wholesale about half. I think it does have a lot to do with minimums, shipping, packaging, presentation, overhead, quality, etc. I don't know if there is a set percentage but it's a good place to start.

 

[jhaime]

sorry, but i don't believe you at all...
a friend of mine is the owner of a shop that carries MiuMiu, Armani and Dolce&Gabbana...all of this labels are working with the same calculation...if the wholesale price of a MiuMiu shirt is 100€ the shop price is 250€...
why should Evisu make such a different calculation and less profit than other labels...
buying something for 20 pounds and selling it for 200 pounds is unbelievable...

hmm, like i said...it varies...

Being the director, i'm fairly sure i'm accurate with my estimations...

 

[jhaime]

Uh...I still don't get it? You said you do a 250% markup...so if you're retailing the jeans for £235 that means you should be buying them at £94 a pair. If you buy them for £20, that means you're selling them at 1200% markup. So is the £15-£20 price you quoted your estimate of the production cost per jean, minus the overhead costs (management, distribution, etc)? Because normally those costs are simply factored into the wholesale price of the merchandise...

250%-300% for most ofout stuff...400% in some cases...

like i said, we have a contract with evisu, we carry the whole line...we're hardly going to be paying £45-£60 for each pair...

otherwise i'd tell their agents where to go...

They're making I nice tidy profit from us, they wouldn't want to create friction

 

[Johnny]

250%-300% for most ofout stuff...400% in some cases...

like i said, we have a contract with evisu, we carry the whole line...we're hardly going to be paying £45-£60 for each pair...

otherwise i'd tell their agents where to go...

They're making I nice tidy profit from us, they wouldn't want to create friction

Is it cruise you work for jhamie?