File: what is the real price of a piece of clothing and what are its hidden costs?

When buying a product, the most important thing is often the price.

Sometimes it's even just the price.

So much so that we often see people buying "because it's cheap", without even asking themselves what the real quality/price ratio of the product is... or if they (really) need it.

You only have to look at the crazy behavior that sales generate... or the frenzy around the slightest competition to get a product for free or at a reduced price.

Beyond this disconnect between the value of the product and its price, there is another discrepancy: the price displayed on the label of a product does not fully represent what it costs .

For example, there may be maintenance costs... or even premature replacement if the lifespan is poor (but also an environmental and societal cost that is more difficult to integrate).

The aim of this article is in no way to make you feel guilty when you buy a product at a very low price, nor to force you to buy more expensively, but rather to understand what the hidden costs are and how to integrate them when purchasing. 'purchase.

And believe me, it’s you who will save more!

HOW DO BRANDS SET THE PRICE OF A PRODUCT?

To begin with, know that the selling price is not always strictly correlated with the cost of the product (you really find everything in terms of margins on the textile market today). But I am not going to dwell here on the question of margins, already very well explained in this file . 1

To set its price, a brand must both take into account purely numerical data (below what price do I no longer make profits?) but must also know the “market value” of its product. And that's where you come in. Because the market value of a product is determined by the customer.

THE PSYCHOLOGICAL PRICE OF CLOTHING

• Isn't the clothing too expensive ?
• At this price, is the garment good quality ?

Here are the two questions you ask yourself when looking at a piece of clothing when buying it 2.

Your answers determine a zone of acceptability, with a minimum price (below which the lack of quality is obvious to you) and a maximum price (beyond which you have the impression of being cheated).

It is in this zone that the acceptability price (or psychological price) is found = price that you agree to spend.

The average of the psychological prices of all potential customers is then used by the brand to set its prices (after analyzing its sales, conducting surveys, etc.).

Today we even have prices that adjust dynamically thanks to new technologies (gasoline, plane tickets or the purchase price of online advertising, for example, and everything that concerns yield management ).

BUT IN FASHION, IT’S ALWAYS A LITTLE MORE COMPLICATED

In certain sectors (including fashion), brands add a dose of intuition to set prices (unless they have a lot of data and can modify prices along the way, something that fast fashion can do).

To take a concrete example, a former APC marketing manager declared in 2012 in an article in Inrocks :

“We had to increase certain prices for the sake of consistency of the collection. We could not sell jeans for 80 euros and a shirt for 130.”

And even today, APC raw denim is a star product of the brand which sells very well.

The right price (the one where everyone agrees) is therefore located in the middle between a strict calculation of costs and the market acceptability price.

Note: at BonneGueule, we work a little differently. We set a maximum selling price not to exceed for an item of clothing, because it is a price that seems fair to us.

And we then try to put the maximum quality into the garment without exceeding this maximum price, during product development.

Sometimes, the margins remain acceptable and sometimes, we have to agree to make much tighter margins (often the case with technical or Japanese subjects).

But in the end it more or less balances out, especially since we play year after year on volume and cost reduction strategies (not too many developed clothes, only basics, not too much stock, no advertising , no intermediaries).

KNOW WHAT YOU ARE BUYING

That said, we cannot only attack brands when products with totally exaggerated margins sell like hot cakes (handbags, perfumes, luxury clothing).

If I buy a very expensive luxury bag, I recognize that this bag is worth that price. Perhaps not for its quality, perhaps only for the image it conveys or because few people have it, but the result is there.

Likewise, if I buy a shirt for 20 euros, I must be aware that my shirt is worth 20 euros = a low-cost material, poorly crafted cut and finishes, etc. From there, it's up to you whether or not you accept the price.

That doesn't mean we have to buy more expensively, especially not!

Especially since “more expensive” does not mean “better quality”.

But it is interesting to know the value of what you buy, even beyond the price set by the brand.

A LOW PRICE... BUT AT WHAT PRICE?

Today the fashion industry is capable of selling products at very high prices... but also very low prices, without being "fair" (that said, it's a matter of personal opinion). But you already know that!

As Romain Rousseau very well said in his article on the evolution of the fashion and luxury sector, referring to the fast fashion model:

“However, if it costs little to the consumer who only thinks in the short term, purchase by purchase, there is still a price to pay.”

THE HUMAN COST

We are slowly starting to become aware of this cost with the Rana Plaza disaster, which occurred three years ago now. The collapse of this textile factory in Bangladesh left more than a thousand dead - and thousands more injured - buried under the rubble .

But the most disastrous thing remains that the authorities had warned the owners who ignored the evacuation order. Monsters ? Well, it's even more complicated than that.

If they took this enormous risk of not closing the factory, it is above all because they are under enormous pressure from the directors of large, well-known fast fashion brands in developed countries.

With the development of low-cost textile manufacturing factories in China and Bangladesh , these brands at the top of the scale have a lot of choice when it comes to outsourcing their production to low-cost economy countries.

If a mainstream brand decides to sell a t-shirt for 5 euros, because its competitor sells it for 6 euros, it will put pressure on the factory which will not be able to say no. Because if it refuses, the brand will find another factory to produce its t-shirt for 5 euros.

Do you find these big companies immoral? They are above all amoral, which means that they do not think in terms of morality. This human cost is therefore not taken into account. Could it be?

It is extremely difficult, if not impossible, to quantify such a cost. It is non-quantifiable, abstract data, and made up of so many factors (minimum wage, working conditions, country legislation, etc.). And above all: who should bear this cost? The company? Factory ? The country in question? Or even the customer? Not so obvious.

Especially since the transparency of brands on this subject still has a way to go... But then should we boycott a product when we read "made in China" on the label? Certainly not. Hence the complexity of knowing whether our clothing was produced in good conditions or not.

In short, we are here faced with a first hidden cost. So we finally have:

Actual cost = cost displayed on the label + moral cost .

THE HEALTH AND ENVIRONMENTAL COST

Today we produce more than 80 billion new clothes per year , yes yes 80 billion. That is 400% more than 20 years ago. To keep up with the current demands of the textile sector, all resources must be multiplied.

Agriculture must be intensified to produce more cotton. Giant companies like Monsanto understood this well and had to develop technologies like Bt Cotton (GMO), which made it possible to increase yields by more than 50%, making India the leading cotton producing country. before the United States.

But these “ecological drugs”, mainly fertilizers and pesticides, wreak disaster on health and the environment. For example, the number of cancers and mental illnesses has exploded in certain villages in India.

In short, yet another moral cost that is added.

Without forgetting the own danger that you yourself run tomorrow as a human (we only have one Earth), and today as a consumer. In 2011, Greenpeace launched its Detox campaign following an alarming report: the majority of clothes we wear contain chemicals that can have harmful effects. adverse health effects .

Well, there is still something positive here since 19 brands signed up in 2016 to be judged by the NGO according to three criteria:

• The implementation of a concrete action plan by 2020,
• The concrete reduction of toxic products on samples taken,
• Transparency in the information given to the NGO.

We'll see if it's not the tree that hides the forest, but it's always a possibility.

Another problem: poor quality products in general are simply unsuitable and insufficient for proper use : walking shoes that cause you to sprain; bad insoles that lead to back problems; low-end shirt fabric that causes irritation on the skin, etc.

A fast fashion item of clothing is worn on average 1.7 times. Obviously, all your t-shirts bought for 10 euros are not worth throwing away at the end of a port! But on average we will wear a quality product many more times and for much longer.

Firstly because it wears out less quickly, but also because we find it more comfortable/beautiful than our other t-shirts and finally, because of a higher price, we own fewer of them.

In short, the real cost of the product becomes:

Real cost = price displayed on the label + moral cost + health cost

Well, all this is a matter of understanding that a price alone cannot reflect the value of a piece of clothing , that there are always hidden costs which it is good to remember in order to be as close as possible. of what property is really worth.

Transparency is becoming a criterion of choice for many of you, which we can only welcome.

I recently discovered the Honest By brand: a collection and an e-commerce site whose objective is total transparency on sourcing and prices.

Knowing that margins are an extremely confidential subject in fashion, this is an incredibly courageous initiative, very few brands would have dared to push transparency this far. The world is moving, and that’s cool!

Other startups say they've gotten into it, but in the end it's very market-driven and remains very opaque.

AND IN THE END, WE BECOME A MUSCLE CONSUMER

The most interesting thing when we understand the value of a product is that our power as a consumer is multiplied :

• We learn to avoid poor quality clothing ,
• We begin to understand the implications of our purchasing decisions on humans and the environment and, little by little, we buy differently.

TAKE INTO ACCOUNT THE COST OF USING CLOTHES

To understand how much a piece of clothing will really cost you, you also need to think in terms of cost of use . To integrate this notion, there is a simple calculation to do.

We now move on to calculation (nice!).

Let's take the example of purchasing a t-shirt:

T-shirt price / total number of ports = cost per port

The famous t-shirt produced following the fast fashion model, purchased for 10 euros and worn on average 1.7 times, costs 5.90 euros per use:

€10 / 1.7 = €5.90

Whereas the Norse Project t-shirt that Geoffrey is wearing, he loves it, it's sturdy, and he bought it for €59. He's already worn it 5 or 6 times and he thinks he'll wear it well over 30 times in his life. That’s a usage cost of €1.70 !

€59 / 35 = €1.7

Or 3.5 times cheaper than the low cost t-shirt !

As long as the first is produced in better conditions than the second 8, you also reduce the moral and health cost (unquantifiable) and you end up with a t-shirt which has much more value.

This is also why we often tell you that below €150, there is no point in buying leather shoes. The same goes for heat-sealed suits for less than €300, etc.

To go further, I offer you a short summary of the great article 9 on the “ value of a purchase ” on the Psychology Today website:

• Buy a more expensive but better quality product . It is the comfort provided by this more pleasant, more beautiful, more solid product... which will reduce its cost of use by increasing your satisfaction.
• Take into account the importance of maintaining a product . No more over-consumption where we throw away everything to consume something new. You have to learn how to maintain your property to make it as profitable as possible. Here too: lower cost of use.
• Stop purchasing products that you don't use (a particularly important phenomenon in the clothing sector). We own 20 pairs of shoes but we only use 3/4 of them. You have to learn to use a product until the end of its life cycle. Cost of use = paid for.
• The key to overcoming this third point is to understand why we own so many pairs of shoes . The variety of brands and products offered on the market has led us to want to have choice. So we always buy more substitutable products to satisfy our desire for freedom. It is by controlling this last habit that our cost of use per product will decrease the most.

These are the four essential keys to radically change the way we consume and benefit from it. Because we're not going to lie, if we didn't have any personal interest in doing it, it would be a bit difficult.

In fact, more than a way of consuming, it is a philosophy of life : that of enjoying the things we have rather than always wanting new ones.

We also find “ The Comfort Principle ” summarized by this sentence:

“Spend your money where you spend most of your time.”

“Spend your money where you spend the most time.” We spend the day in our clothes, so we invest in feeling good in them.

But beware ! Once again, it is not necessarily enough to spend more, but to spend better . Buy two t-shirts for €30 instead of buying six t-shirts for €10.

THE TOTAL COST OF OWNERSHIP EXAMPLE

Companies have already gotten into the habit of integrating the “use” criterion into the real cost of the intermediate goods they consume. This is called the total cost of ownership or TCO ( total cost of ownership ).

They will calculate everything that a product will cost them (beyond its purchase price) over the entire period of time they will use it.

For example, if a company decides to buy a car, it will calculate:

• Its purchase price,
• Registration fees,
• Gasoline costs,
• Insurance costs,
• Maintenance costs,
• Taxation (especially for businesses),
• The cost of resale.

But this only concerns the product cycle, from its acquisition to its abandonment by the buyer. We can go even further with a concern, not for profitability, but for social and environmental responsibility.

And the real cost of the product becomes:

Real cost = price displayed on the label + moral cost + health cost + ownership cost + recycling cost.

THINKING IN TERMS OF PRODUCT LIFE CYCLE COST

To change the way we consume, we must go beyond this measure, which remains economic, for another, more ecological one: the life cycle cost of the product or "life cycle cost". 

Understand its cumulative cost throughout its life cycle, from upstream (design, manufacturing, etc.) to downstream (cost linked to its dismantling, recycling, etc.).

It’s the same logic as a successful customer experience. The entire purchasing process counts, from upstream with advice, to downstream with careful consideration of feedback. When you buy a product, you are also buying this service.

But the problem here is who will bear these costs . Because while some are obvious (the design is, for example, included in the final price), others are less so. Who will bear the cost of polluting a t-shirt or recycling it?

Impossible to answer this question. Or yes, by settling for “a little bit of all of us”. There is a notion of altruism behind all this.

On the other hand, at our level, we can start with relatively simple little things like learning to repair an item of clothing yourself and avoiding leaving it at the first problem or button that pops.

To do this, here is a first article to learn 5 relatively common small repairs to do yourself and an infographic full of tips for caring for your clothes .

WHAT TO DO NOW ?

I hope you have a little clearer picture of the real cost of a product.

And if this article raises any questions in you: don’t hesitate, as usual, to ask them in the comments 🙂

Finally, don't feel guilty , we all know that it's complicated to change your habits. And there is no personal judgment in this article. We're not here for that!

We just hope that you will see beyond the material and the quality/price ratio (in the same vein as Geoffrey's article on living clothes and dead clothes ), and that these lines will inspire you some thoughts the next time you will go shopping (an activity which should remain a pleasure above all, let's not forget that).