How To Achieve A Realistic Pricing Model When Everything You...
By Cyndi Rhoades on August 24, 2009
With just a week away from launching our Bon Voyage collection of outerwear, bags and accessories made from decommissioned Eurostar uniforms and Virgin hot air balloons, we’re very excited. It has been a long road building a supply chain based entirely in the UK, for a next to non-existent industry (upcycling). And, during a recession.
One of our key challenges has been around pricing our products. There is a common misconception that products made from recycled materials should somehow be cheaper. This is not the reality.
For the past few years, Worn Again products have been available at a number of retailers, including Terra Plana, John Lewis and various independent shops around the world – in Japan, Scandinavia, the US and Europe.
We have sold our products using a conventional wholesale model where the retailer buys stock from us at a price that includes cost of goods and a margin for Worn Again. The retailer then adds their margin of between 2-2.6 times the price they buy it from us for before selling on to the consumer.
The process of upcycling, primarily the prepping of the materials required before manufacturing, is labour intensive (we will be posting a link to a photo story of the process soon – please check back) and, quite frankly, fiddly. Combine this with the higher labour costs we encounter by manufacturing in the UK and the conventional retail pricing model becomes unfeasible.
Using the standard pricing model would make our products disproportionately high compared to similar products which have been produced in the Far East for much cheaper, and ultimately, much more than most folks are willing to pay.
To address this, we have decided to make Worn Again available exclusively online. This way we can ensure affordable prices while not compromising on style or standards. For instance, a bag that we are now able to price online at £69 would otherwise have cost £92 based on the conventional retail model. While we regret not having a presence in some of our long time retailers, we’re pleased to be able reduce the price barrier. Our products will be harder to come by but softer on your wallet.
We’ve found a solution to the normally high retail prices associated with products made with improved social and environmental standards – now we’d like to sell some of them.
Be sure to spread the word!
Cyndi
Worn Again
‘Chief Upcycler’
I really like when people are expressing their opinion and thought. So I like the way you are writing
I would appreciate more visual materials, to make your blog more attractive, but your writing style really compensates it. But there is always place for improvement
About pricing models:
I was buying shoe laces off Twistlink in Leicester who make them. I think they explained their pricing model, or maybe I guessed, but here goes.
A UK manufacturer is expensive but convenient. It only gets small awkward orders. About half the cost is spent setting-up machines, getting materials, adjusting machines till they do more good than harm, and that’s after sales credit checking and free design work for the customer. The other half of the cost is handling little bits of material, keeping the machines going, sewing and the rest.
Where the set-up cost is about half, a factory tends to say that’s the minimum order, and most of the orders they get will be that size.
The way to cut costs is to ask for standard designs which different traders can order separately or sometimes together. A bit like the Utility clothes and furniture that was designed for rationing in the 1940s and one or two of the 1940s designs might even be usable now.
If you’re up for some open source designs which I can order too, I could give you a ring
cheers
John Robertson
Veganline.com
0800 458 4442
I’m glad to see a solution: UK shops are too expensive a part of the chain to sell UK products and something has to give.
About manufacturing contacts: part of the solution is in the same office building. If you could persuade your trade association, the Ethical Fashion Forum, of the need to help UK manufacturers get recognised as an ethical, premium choice then fewer of them would close. At the moment EEF and Esthetica grab the free publicity which the likes of Equity, Grenson and Sanders and Sanders could have used.
Good luck with the banks