Sharesson

Everybody loses in the long run if the price pressing frenzy continues.

Blog post   •   Jan 20, 2016 13:42 CET

I believe that we have all seen the giant outdoor retail stores that have entered the market recently. They have a good product offer and the prices are much lower than in other stores. It sounds fantastic, doesn’t it? Great products at low prices. But what happens behind the scenes and what happens to the products, suppliers and manufacturers in the long run?

E.g. an outdoor company creates a line of clothing. They begin with an idea and a story and develop it into a collection. The clothing line is coherent and each garment has its place and relation to the other garments. Since the giant retailers cherry pick the garments they want, they brake up the clothing line and deprive the customer of that coherent experience. Depending on the choice of fabric, trims, and material a price is calculated. This price is obviously determined to cover the production costs and all overheads. It should also give the company some profit in order to survive, reinvest and drive the product development forward. This is basic stuff.

So what happens when the giant price pressing retailers approach the producers and start dictating the terms? They tempt with a great exposure to their customers and the producers don’t have the guts to say no. The retailer says jump! I think you can guess the answer. How high? First I want to remind you that I only talk about price pressing services and giant retailers that recently have popped up, for instance in the Swedish market. I don’t talk about retailers in general. They are knocked out of the market.

The real issue regards the product quality. When the prices are presses, the producers are compelled to reduce the quality. It is impossible to keep the best fabrics, trims, solutions, and materials. You need to take away functionality and change fabrics. The product may look very similar, but doesn’t provide the same quality to the customer.

And where do you believe that the producers are forced to produce the garments? Is there enough money left to pay decent salaries and ensure ethical work places? You do the math.

Well, people want cheap products. Just remember that you get what you pay for. A more expensive product will in most cases mean a better deal for you. Great quality and longer product life instead of cheaper products that need to be replaced quicker. Products that last longer are more sustainable for everyone.