I’ve been thinking a lot about my pricing lately. When I think about the amount of effort that goes into finalizing a style, the time spent in tailoring, and the expense in experimenting with different colours and fabrics, I think my prices are too low. But then, I never wanted my brand to be in that high-end and almost unaffordable league, so I guess it’s up to me to be smart about my fabric and tailoring choices to deliver a unique product that’s still affordable.
The definition of affordable, however, varies from person to person and from income to income. I understand that completely- we all have different reference points after all- but what does upset me is when people cannot imagine why my garments would cost as much as they do (my prices range from Rs 800 to Rs 2,600). This post is my attempt to explain why a well-tailored garment made from handwoven, natural fabric cannot be sold for cheap. Well, at least not be yesteryear's standards of cheap.
Most designers follow a simple equation to help them price a garment. There are more complicated ways of doing this by taking into account hidden costs such as rent, sales staff salaries, etc, and some designers have a wholesale price and a retail price but at its basic level, this is the standard equation.
Cost * Profit Margin = Price
Usually, only direct costs are taken into account. This includes the cost of fabric, notions (buttons, thread, zips), and tailoring charges. Let’s take a look at each of these direct costs.
Fabric: It’s no secret that natural fabrics are more expensive than synthetic fabrics. Add to that the process of small scale yarn dyeing, and weaving- that’s a lot of skilled labour right there! Many people seem to be under the impression that labour in India is still really cheap and that handwoven fabric should not be that expensive. The farmers and weavers who work for cheap can’t survive with today’s standard of living; has no one read the news stories about farmers and weavers in Andhra committing suicide? Just so that everyone is on the same page (and in the same decade), here are some figures to get you up to speed on what quality labour costs these days.
One metre of handwoven cotton can cost anything between Rs 80 to as much as Rs 450 per metre. This is dependent on the quality of yarn, the amount of yarn, and the tie-dying work done on the yarn (ikat is obviously more expensive because of the labour involved before the weaving itself). Additional textile crafts like extra weft (jamdaani) weaving add to the cost.
If the cotton is real khadi (and by real khadi, I mean the yarn should have been spun by hand) and handwoven, then it can cost anything between Rs 150 to Rs 350 per metre. I know, it’s such a steal it’s not even funny.
Handwoven silk can cost anything between Rs 200 to Rs 800 per metre. This is dependent on the weight of silk, the quality and type of silk, and special weaving techniques like jamdani or ikat.
Tailoring cost: A really good tailor can cost anything between Rs 6,000 to Rs 8,000 per month. A good tailor has control over a sewing machine, can give you a good finish with concealed zips, darts, and French seams, and he knows how to change the machine tension according the fabric so that you don’t have a beautiful satin silk garment puckering at every seam.
Oh, and even a good tailor can take up to half a day to tailor one garment if that garment has a lot of darts and pin-tucks or pleats.
A good pattern maker (and it is the pattern maker, not the tailor who decides the fit of the garment) can cost anything between Rs 12,000 to Rs 30,000 per month. I’ll say less about this because clearly there are pattern makers and there are pattern makers. This cost really depends on what kind of garments you want to make and how much time and effort the designer spends explaining her vision, concept and style.
A good cutter (whose job, literally, is to cut out fabric in the shape of paper patterns that the pattern maker generates) can cost anything between Rs 6,000 and Rs 10,000 per month.
Notions: Invisible YKK zips cost anything between Rs 35 to Rs 90 per zip, depending on the length. Shell buttons cost anything between Rs 3 to Rs 20 per button, depending on the type and size.
Now that’s a lot of information to help anyone figure out how much it costs to make a range of garments in cotton and silk. And these are only the costs for the direct input into each garment, mind you. Not factored into the direct costs are the time spent finalizing a pattern from sketch to final product, the time spent grading patterns to different sizes, the production manager’s time spent making sure everything gets done in time and without tailoring errors, sales staff salaries, rent, electricity, phone, and of course the cost of machinery.
Yeah, don’t even get me started on the hidden costs of running a business.
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6 comments:
Wow- as a buyer I never really thought about all this.Very informative post Anaka.
Interesting read as always. Maybe you should add the cost angle to your learning centre or someother part of the site. Make it interactive.
Your customer could pick things like the fabric and designs that you provide. Depending on their selection and what it entails work wise, you could tally up an estimate, show them the breakup and ask them if the price is okay. If they say its too high, get them to reconfigure the breakup. Changing those zips to buttons maybe all the difference between an acceptable price or unacceptable one.
Ofcourse, it doesnt have to be all high tech. The same things works just talking to them. They need to know you are trying to bring down cost for them. They need to know they are getting a deal. 'Behavioral economics' google it when u get time.
Thank you Arya. I was worried it sounded like a rant justifying my price!
Santhosh- you have a lot of interesting comments. I think I should wait until my brand is more established before I add information on the pricing to the learning centre. Otherwise I'm worried it comes off as too defensive.
Your idea about customers doing the math to figure out the price for their cusom outfit is interesting, but not something I want to get into. I actually don't do any custom made clothing, since I put all my effort into my ready made clothing. I do alterations, and I make special pieces when a customer likes a certain piece but finds that the standard size doesn't work well for her. But I do not make style changes (combining a cowl neck from one style with a sleeve from another style and a fabric from a third style), and I do not work with anyone else's fabric. Today a customer was so upset with me for not working with her fabric and she told me I can never succeed with this attitude. It's hard keeping everyone happy, but if my goal is to build a brand of well-cut ready made clothing, I cannot make one of a kind garments that are custom-made.
I hear what you are saying about customization. Being clear about what you want and standing by it, is something I totally respect.
The post talks about people walking out of the store with the perception that the product is expensive. The larger point I was trying to make, rather poorly I think, was give them something else to focus on.
And adding pricing info into the learning centre doesn't necessarily mean putting up a spreadsheet. Adding a line here and there talking about costs of the process, makes people more aware about things they most probably know nothing about. Just as your post did for me.
Keep up the posting and am sure in a year or so if nothing else this could turn into a book most b-schools would be recommending :)
Hi Santhosh- on one hand I know that I wouldn't be here if I wasn't clear about my vision (and for the most part I am really happy with where I am), but on the other hand it's tough to know what feedback to take into consideration and what not to. For example the other day someone told me I should have a wider range of garments- from Rs 500 onwards (the less expensive garments would be really simple of course). So maybe I should take her advice to cater to more people, but then in terms of design I would not be happy with the output (my styles have to pass the what-is-really-special-about-this test before they go into the store, and with Rs 500 that would be really tough). Maybe it's a compromise I need to make while my brand gains popularity? I don't know the answer.
I see what you are saying about pricing info in the learning centre. Actually when I'm in the store a lot of customers do listen patiently while I tell them about the labour process involved in a craft like ikat. I guess I could work that into the learning centre. I'm also a big fan of indirect messages. Like projecting a certain brand image to show people how expensive the fabric is, rather than explaining it directly in words. That's what I try to do through my style descriptions on the website, writing about my work on my blog, and writing about the crafts in the learning centre. But perhaps that's still not enough.
Thanks for all your encouragement!
Hi -- Thanks for stopping by. I am always pleased to see your comments...
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