One interesting question that few ask is why is Amancio Ortega one of the wealthiest people in the world. I mean we know who Bill Gates is and how he made his $$$ and we know who Warren Buffett and how he makes his money (through his Berkshire Hathaway fund). But who is Amancio Ortego and how in the world did he get to be so rich.
Well he started a company called Inditex. And it owns other companies most clothing stores. But what kind of stores? Mostly they are stores that sell fashion at very cheap prices. So how did a guy who owns a lot of stores that sell cheap clothes get to be so rich? That’s a very interesting question. And when you look closely, you can see plainly how he makes so much money. Basically he sells a very cheap product at a very low price. And because the product looks really REALLY good – they are VERY fashionable, most consumers think they are well-made, or even some consumers don’t care if they aren’t well-made – they just want the look, no matter the quality.
And we think that, WOW this is a great look and I’ll be able to wear it for a lot of occasions and it will last for a lot of things. The real facts are that these items costs around $20 each, and costs probably around $2 or so to make. Doing some quick math….if one of the hundreds of stores has about 20 of one of these items and sells them, that’s $360 profit. For 100 stores, that’s $36,000. That’s just one of these garments. That’s the profit margin for one of these garments.
Going further to ask, why does this cost so little to make up and how can the store make such a profit margin on something so cheap? Of course there’s the cheap labor we all know about, and how they are relegated a certain amount of time to make a garment, so there’s the minimum quality there. There’s also the quality of the materials used. When “normal” fabrics are made of a certain numbers of fibers per yarn in a fabric, in cheap clothing, that’s reduced, making the fabric weaker, but cheaper. That also includes the lack of quality in the threads, zippers, buttons, interfacing and any other notions used in the garment.
You can bet that the business bean-counters at the cheap/fast fashion industry’s financial departments have done research on just what the consumer will buy and how cheap can they go. The cheaper and flimsier and less quality the item the less the manufacturer has to pay and the more money the retail industry can make.
But what happens if we turn this formula around? What happens if we do research on just how much the consumer will pay for a “green” item. A consumer goes to the store and sees an item that is tagged as using less natural resources or is recycled or other sustainable feature of the garment, and next to it is a regular fast/cheap fashion garment at it’s usual low price. How much would the consumer pay over the fast/cheap fashion price?
If you saw this item at a store and the regular price was $7.99 but you saw right next to it was a green price and it was $?…..how much higher would you pay….20% ($9.50)…30% ($10.38)…40% $11.18). As part of being a greener product, it might be made out of the same contents (cotton being the cheapest, but expensive in natural resources), but made so much better that it would last far longer, therefore requiring less cotton needing to be grown to replace the fast/cheap fashion version that would need replacing constantly.
Sewists are confronted with this all the time, and although the cost of making a tee-shirt out of high-quality fabric, runs about the same, maybe a little more than the item purchased at the fast/cheap fashion store, but the value is so remarkable, that the extra little cost, actually turns out to be far less than what it would cost to constantly replace the tee-shirt from the store.
How much more would you pay for a greener, quality item over the fast/cheap fashion version?