This post is a scary one to write.
Shining a spotlight on the most vulnerable part of my business is terrifying. Especially because it'll likely be a deciding factor of whether my little shop survives.
But I've decided to share because it's an essential part of our story and it's important (perhaps cautionary) info to know if you want to start an apparel line of your own.
My biggest business "mistake" so far...
...is our pricing strategy. There are several ways to price apparel but the most common is determined by what it costs to create the product. The simplest method is to set retail prices at 4x or 300% increase of your production costs.
Spoiler alert: This model IS NOT what I use 😳
Let's say a t-shirt costs $2.50 to make.
The brand will set Wholesale Price at +100% ($5 in this scenario) of production cost. They sell the shirts to retailers at this price and make a reasonable profit.
The brand will also assign a Suggested Retail Price (aka MSRP) that's a 100% markup ($10 in our scenario) of the Wholesale Price. This is ultimately the price you pay at the store which allows the retailer to make a profit from their wholesale purchase.
Now pick up a piece of your kid's clothes and imagine this journey with me for a minute. The materials and machines used to mill the fabric you're holding (lemme tell ya, fabric ain't cheap), the ink to dye and print that shirt, the factory it's made in, the minimum of 4 different industrial machines it takes to cut and sew one shirt together, the airplane or ship and fuel it takes to ship it from the other side of the world. How can that all possibly be done for only $2.50? It can, but in the process humans are not treated humanely.
Anju (cited in this article: https://bit.ly/2EnIGRD) makes $900/year, working 7 days a week, 12 hours per day, sewing clothes in Bangladesh. That breaks down to roughly $0.20/hr. And you know that low wage is married with poor and sometimes abusive working conditions.
When I started assembling the pieces of what would become mui + kai, I spent weeks planning with this pricing model. Making it affordable for you, the customer. Making it affordable for me, the brand. A business model where I could sell cute shirts for $15 a piece.
But at the end of the day I didn't feel comfortable putting your little ones in clothes that someone else had to suffer terribly for.
Instead, this is how we do...
Through this whole process, every decision I've made for this business goes back to a single principle - LOOKING DOPE SHOULDN'T CAUSE HARM
I chose to source sustainable premium fabrics and work with local manufacturers that treat their staff well and pay fair wages. I knew that pricing based on my current production costs would make my clothes entirely unaffordable to most people. So instead I priced to be comparable with other shops that offer premium quality products.This is ultimately what my pricing model looks like:
No, my margins right now won't allow me to sell to retailers even if I wanted to.
Yes, my production costs are very high. In fact, more than what big box retailers are charging for their clothes at retail price.
Is this a pricing model that's sustainable in the long-term?
Honestly, NO, it's not.
But I'm committed to creating high quality pieces for your kids without hurting people in the process. I'm keeping my fingers (toes, hair, everything) crossed that our squad loves us enough to continue supporting and over time we'll be able to grow while keeping things ethical.
IF YOU'VE MADE IT THIS FAR...
...thank you for sticking with me! I know it was a long one. Please know this post is not intended to throw shade or be a guilt trip. It's a super complicated issue and I don't have the answer. This is just how my business is approaching it.
Shopping ethically and investing in slow-fashion can be VERY expensive and not everyone can afford it. I completely get that. I personally shop at big box stores and I love a good deal as much as the next person. But if and when you can, please consider shopping with brands that prioritize ethical fashion.
If nothing else, hopefully you take away the importance of supporting small business (especially this one 😉) and acknowledge the struggle of hundreds of millions of people who didn't have the luck of being born in a privileged country.