As the Chinese New Year approaches, it’s the peak season for clothing sales. Looking at the clothes in shopping malls that often cost more than 1,000 or 2,000 yuan, how much do they cost? Why are they sold so expensive?
The cost of a piece of clothing includes its development costs, fabric costs, labor costs, taxes, logistics costs, sales channel costs, etc.
The first is the issue of fabric and lining costs. Taking 260T matt pongee (75D*75D, 18*3*32, 165cm) as an example, the price of polyester DTY75D/72F full matt yarn on January 19 is 13,500 yuan/ton;
Longitude: (18*3*75*1.65*0.0135)/90=1.002 yuan/meter
Latitude: (32*75*1.65*0.0135)/90=0.594 yuan/meter
Total cost: 1.002+0.594=1.596 yuan/meter
The current gray fabric price of 260T matt pongee is about 2.6 yuan/meter. Not counting the costs of labor, taxes, water and electricity, logistics, processing, etc., the gross profit of the gray fabric is only about 1 yuan. If all are included, occasionally even Still losing money.
Next is the cost of production. It is reported that after the increase in labor costs and bulk raw material prices in 2016, for manufacturers, the cost of raw materials including fabrics, linings, accessories, etc. accounts for about 45%-50% of the shipment price, and labor costs also account for 35%. -40%. Taxes and other expenses account for about 6% of the cost. However, taxes and fees can often be deducted, so the total cost fluctuates between 80% and 95% of the shipping price. The profit is very high most of the time. meager.
After receiving the goods, the intermediate dealers and brands will charge an additional 10%-20% for OEM, distribution, and circulation to retailers. If the OEM is a big brand, the price increase will increase.
For Chinese clothing retailers, the general purchase price accounts for about 30% to 40% of the selling price, and the mall’s commission generally accounts for 20% of the selling price, plus 6% of taxes and salary costs. -8%, the total sum will generally account for 60%-75% of the selling price.
Taking a coat priced at 2,000 yuan as an example, its production cost is about 630 yuan, including about 300 yuan in raw material costs, about 250 yuan in labor and other costs. The middleman’s purchase price is 700 yuan, and then the middleman adds another 300 yuan for OEM and distribution to retail stores. At this time, the purchase price at retail stores is about 1,000 yuan. To sell the clothes without discounts, you have to pay about 400 yuan to the mall, 150 yuan in taxes and labor costs, and the profit you get is about 450 yuan.
Although the profit seems to be high, this is the profit under ideal circumstances. Marx described the process of converting goods into currency in Capital as a “dangerous jump”. In order to sell off the products, retailers generally adopt discounts. . If the discount range exceeds 70%, the profits of retailers will be very thin. Merchants generally put up slogans of 50% off or even 30% off to clear inventory.
In order to eliminate the impact of inventory and reduce channel costs, some emerging brands have adopted a model that allows consumers to place orders first and then produce.
Elizabeth Suzann is an American brand founded in 2013. It focuses on minimalist style that focuses on materials and tailoring, and is priced at around US$100 to US$300. Adopting a model where consumers place orders first and then produce, all production is in-house (a production model that purposefully reorganizes and integrates the industrial chain). Liz Pape, the founder of the brand, wrote a blog of more than 5,000 words on the brand’s official website, with a very straightforward name “Talk About Money”, in which she published and analyzed detailed data on the pricing, production and true costs of her clothing. .
It can be seen that under this new model, the cost of raw materials and labor of the product exceeds half of the selling price. This also takes into account that the brand is located in the United States and most of its products are now processed locally, so the cost has increased significantly. .
In China, this model is generally called “Internet celebrity store” because raw materials and labor are cheaper, and a lot of channel costs are saved. When pricing remains unchanged, its profits become higher and are generally It can be maintained above 50%. This model is having a new round of impact on traditional clothing retail.
Postscript: As the Internet becomes more popular and information circulates faster and faster, every cost of clothing is spread out. The original traditional retail model in which channel costs account for the majority of the price will encounter constant impact from various new sales models. .
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