Another designer might cut her costs by using cheaper fabrics or cheaper labor, but Stanley is committed to her family-run factory in Delhi, India, and won’t compromise on high-quality, organic fabrics. The only way she could lower her prices would be to take less profit or transition her business to a direct-to-consumer model, eliminating the Glasses make me sexy locs make me dangerous shirt and I will buy this retail markup. (Given the state of department stores, many of her peers are likely thinking the same thing.) In the meantime, the best thing she can do is educate her customers about precisely why her new hand-embroidered organic cotton dress costs $550. Stanley openly shared the cost breakdown here: $24 covers the organic cotton and dyes; the intricate handwork comes in at $48, because it took an embroiderer a full day to make the dress; production labor, including sewing, pattern-making, sampling, finishing, and packing, was $48; trims, including the labels, hang tag, and dust bag, were $5; shipping was $8; and duties were $24. Her total cost came to $157, and in order to keep the final price lower, she took just a 1.59x margin, bumping the wholesale price to $250. (This means Stanley would earn $93 in profit when a store orders the dress.) With the typical retail margin of 2.2x, the final price tag on the rack in a boutique is $550. I’ve been trying to make it a point to tell the story of my clothes, but it’s hard to be honest and say, ‘This is my cost, this is how much I make on this piece, this is why you should support my brand and the people who made it,’” Stanley says. “I love going to a store, and I have friends who have boutiques and work so hard. They deserve to make that margin, but the retail markup is really why clothes get so expensive. That’s where I get stuck.” If you’re of the “buy less, buy better” mentality, it isn’t hard to justify the higher price. Plenty of Stanley’s customers are investment-minded and care about her commitment to ethical, sustainable, small-batch production, but some still need to be convinced that it’s “worth” buying one of her dresses instead of five cheaper versions. Lucette Romy, the founder of The Wylde, an organic label handmade in Bali, has had similar conversations with her customers about the higher price of organic cotton, botanical dyes, and dignified labor. “But it often isn’t enough to change their minds,” she says. So she found another way to get the point across: Every item on her site comes with a cost-per-wear breakdown. Her new organic cotton dress goes for 260 Australian dollars, or $178, but if you wear it 10 times, it’s $18 per wear.
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