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The pricing dilemma of sustainable clothing brands

Posted by Mevludin Dzihic on
The pricing dilemma of sustainable clothing brands | Dzihic

Hello!

So I’ve been thinking a lot recently about building a sustainable fashion brand, what that entails, the journey so far and really. Just how difficult it has been. As part of this reflection I was looking at our prices and reviewing how it is we got there. As in natural we will look at competitors to see what they benchmark their prices at and I came across a unique problem in the sustainable fashion world.

A lot of men's sustainable clothing brands prices their products to high. These then causes, what we here at Dzihic term the ‘pricing dilemma’. But why do sustainable fashion brands have such high premiums and why is it brands like ours want to buck the trend and become a ‘affordable clothing brand’? Well below are some of the reasons why some sustainable brands have such high premiums.

Wages

OK, so to begin with, we will state one of the main reasons. Unlike normal fashion, or ‘fast fashion’, sustainable fashion and specifically the clothing brands in this space pay either their employees higher wages or their supplier’s higher invoices to cover for their higher employee wages. So why is this? Usually sustainable fashion brands have ethical standards they have to uphold. For some it will be Fair Trade badges and for others it will be an equivalent badge of honour. What these badges mean however is that the workers on the field, or those at the supplier are paid more to ensure they can be paid a decent, comparatively, living. Usually these wage costs aren’t absorbed by the brand or supplier and is instead passed onto the customer.

So unlike in fast fashion where, unfortunately, workers and suppliers can be paid minimal. Resulting in lower overall prices. Sustainable clothing brands have higher wage costs which push-up the overall price.

Ethics

Although somewhat touched upon in the previous point. I think it is worth stressing ethics as its own point because it is the overarching theme for a lot of factors which affect price. So what do I mean by this. Well: wages, health and safety, employee benefits, and general well being.

Generally speaking, these all tend to be higher in sustainable brands and their suppliers. Now this isn’t to say that brands which aren’t sustainable don’t have got wages and health and safety policy. But we’re talking generally and compared to your average brand. Not the Nikes, Michael Kors and so on.

The point being that because wages tend to be higher, benefits tend to be more generous and facilities offered to employees tend to be better. This all costs the brand or supplier more in terms of outgoings. So these extra costs tend to be passed on as higher prices onto the customer. These various factors play into the arching theme of ethics and in most sustainable clothing brands, being seen with good ethics is important. That’s true even for Dzihic, all our suppliers have to meet certain standards which we set to ensure we get the best.

Brand Margin

This point is like airing your dirty laundry, not one likes or wants to talk about it. But it is a key factor never the less and this is profit margins. I don’t think it would surprise anyone if I said that we don’t sell our clothes at the cost that it costs us to make them. We add our margin. If we didn’t we would never expand and continually run at an overall lose because at the start of any business, you plough in more time and money than you get back. If you constantly broke even, then the money you out in at the start to begin operating at breakeven would be permanently lost.

But enough of business 101. The point being made here is that being a sustainable fashion brand is seen as quite ‘cool’ by some. It is seen as a ‘hot’ thing as it is unique, helps the environment and a lot of other reasons. Of which you can read more in our blog “Why is sustainable clothing important? Building a sustainable clothing brand

Because of these reasons, some brands see fit in whacking a massive margin onto the end price. Sometimes these prices are justified, but other times you are just paying for the brand. Which isn’t a bad thing of course; consider why you buy Nike, Adidas, Ralph Lauren, Gucci and etc. It’s because of the brand. Truth be told a lot of these products are actually made by the same supplier in the same factory. It’s just the design and logo is different.

But I mention margin for another reason. Sustainable clothing for us is more than just a fad, it is a genuine attempt at making a difference in the fashion world and generally doing what we can to support our environment. So at Dzihic, we have kept our margins as competitive as possible because we want a wider penetration into the market. We don’t much care if we considered ‘premium’. We care more about ensuring more people are buying sustainably.

Wrap Up

So that’s it, unfortunately I don’t have a big long list of why prices for sustainable clothing brand prices are higher than others because the three points above capture the most common reasons across brands. There are of course other reasons, but this is usually down to the brand.

For example, so brands might want to be situated in well established fashion hubs like London, NYC or Milan. The rent in these locations are a lot higher than say Hull in the north of England so this will affect the bottom line and prices. Similarly, some businesses might have a higher head count because they are a people driven company or they just don’t manage their resources properly. Again, this will push up the bottom line and therefore prices.

But these factors are at the brand level and are unique to them. Whereas wages, ethics and margins are general and across the board.

 

 

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