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NYT Syndicate
To make its Kennedy Weekender overnight bag, the accessories and leather goods company Oliver Cabell spends $16.02 on canvas, $11.58 on leather, $5.68 on lining and 78 cents on webbing. The zipper costs the manufacturer $4.27.
In total ” including manufacturing, transit, duties and other expenses ” the company spends $110.35 to create the bag, which it sells online for $285.
And while most retailers keep such details opaque so that consumers won't know how big a markup they are charging, Oliver Cabell flaunts the cost breakdown of all its products on its website, so customers can see exactly what they are paying for and how much the manufacturer is charging them on top of its cost of production.
This practice, known as transparent pricing, has been gaining hold among a select group of retailers, who say that it appeals in particular to millennials ” who often want to know not only the provenance of the goods they are buying, but also what, exactly, they are paying for.
"Price transparency is crucial for clients who want to be sure that everyone was paid a fair wage along the way," said Bruno Pieters, founder of Honest By, a clothing and accessories retailer based in Belgium. Employing the slogan"the world's first 100 percent transparent company," it uses a price breakdown so extensive it includes the cost of size labels and hang tags.
For instance, a black organic cotton print T-shirt, advertised as vegan, organic and skin-friendly, costs about $110 (in the European Union, a price that includes the value-added tax) or $90 (elsewhere, without that tax). Among the extensive details customers can learn about the shirt online are that the hang tag (67 cents) is made of 100 percent wood-free cellulose and buffered with calcium carbonate, and the T-shirt itself was knitted and assembled in Germany and cost the retailer about $13.50. (All prices were converted from euros.)
Pieters explained by email that his decision to present his products this way stemmed from his time at a major fashion house.
"I saw how the companies I worked for and others would move their production from Belgium or France to Vietnam or India, but would still be asking the same prices they asked before," he said. Other ethical concerns, like fair wages, also informed his decision, Pieters said.
Scott Gabrielson, who got the idea for his accessories and leather goods company, Oliver Cabell, while working on his MBA at Oxford, said the ability to sell directly to consumers online had a big influence on his decision to use transparency pricing. He wanted to show that, by eliminating brick-and-mortar and other built-in costs, clothing sellers could save shoppers money.
"By cutting out traditional wholesale, you can sell directly to consumers and have a much higher quality product for a much lower price point ” the pure economics make that work," Gabrielson said.
One of his biggest challenges, however, has been convincing shoppers that the goods he sells are worth the cost, particularly when all that people have to go on are the pictures on his website.
Such scepticism may be on the wane, however, as consumers migrate online from malls and brick-and-mortar retail stores. Natalie Grillon, founder of Project Just, which collects ethics and sustainability data on fashion brands, said she thought transparency pricing would give a leg up to retailers that used it.
"We've lost the understanding of the value of the clothes we buy," Grillon said."Pricing transparency and stories behind the scenes help the shopper navigate the decision to pay for a more expensive product."
For some clothing companies, price transparency is used as a one-off or occasional tool. Take, for example, the New York-based menswear brand Noah, which says it tries to merge"the rebellious vitality of skate, surf and music cultures with an innovative appreciation of classic menswear."
Brendon Babenzian, Noah's owner, said consumers had gotten"very used to paying inexpensive prices for things." To help them understand the industry, he broke down the production and pricing details of a signature product, his two-toned parka.
This parka retails for $448. The zippers, Velcro, snaps and drawcords come from Italy and cost an aggregate of $16.88. Mesh from Japan costs $2.18 per jacket. A custom label is 75 cents, and sewing and assembly are $122.29 ” among other costs.
Babenzian's aim is to open shoppers' eyes to the true cost of making high-quality clothes. Going forward, Babenzian said he planned to use cost breakdowns strategically, in cases when a product might appear to be costlier than a customer might expect.
