It’s time for another Why do Lingerie Retailers…? feature, and this one asks the ever-popular question “Why do things cost what they cost?” If you’ve ever wondered what goes into the price of your favorite lingerie brands, Catherine (of Kiss Me Deadly fame) is here to explain -
My heart sank when Treacle asked me to put in something about prices, because that’s a 10,000 word essay in itself. So, I’ll try and cover some of the basics. As you may recall from a few years back when I wrote about hosiery, pricing basically depends on the amount of time that goes into making a product and the cost of the materials.
But it won’t always be obvious to someone not involved in making something what might be the expensive bit of a product. Ayten Gasson does a roll hem or French seam on all her pieces, for example, as its more attractive and comfortable than the standard cheaper overlock . . . but you don’t see the inside of a garment when you buy online, and how many of you know that bit of trivia anyway?
You should also factor in the time it takes to develop a product – sampling, fittings, grading (i.e. different sizes), marketing, and photography. The post production time is where it costs you money.
Obviously you can reduce those costs considerably by having key patterns that you just restyle regularly. At the other end, there are costs associated with having stock sitting on the shelves. Space equals rent and bills and staff to count things, so a product sitting around is costing you money. It’s a fine balance keeping enough in stock without ending up with huge overheads that maim your profit margin into the kill zone.
Then there are lots of additional complications. For example, in the UK we pay 20% VAT (sales tax, basically) on most things, so about 1/5th of what we charge goes pretty much straight to government. We also have to factor in national insurance (the chunk of peoples wages we send the government to help with pensions and whatnot), business rates (tax on our offices that goes to our local councils for services they provide) and of course in the event that we manage to make any money, 20% of that goes (yes, you guessed it) straight to the government again. Unless you’re Vodaphone, in which case you can mysteriously avoid these things.
We should supply a certificate if you manage to read all this stuff. It’ll be super handy if you ever do a business qualification, I promise.