Transparency Gone Too Far? Why This Company Regularly Changes Its Prices
We’ve talked about how important transparency is to consumers today – the modern shopper values authenticity. But is there such thing as taking honesty too far? That is, where do you draw the line between doing what’s best for your consumer’s bottom line, and your own?
The cost of doing business
One company has decided there is no line. Online apparel retailer Everlane’s founder and CEO, Michael Preysman, points out that the cost of raw cashmere is in constant fluctuation, admonishing other retailers for not taking this into account when setting their prices:
“Sometimes [the cost of cashmere] goes up. And when it does, retailers raise their prices. Sometimes it goes down. But when that happens, retailers almost never lower their prices. They just keep the extra profit. That’s not honest.
“Due to a slowdown in the luxury market, the cost of cashmere has dropped 16%. So we’ve lowered our prices to pass those savings onto you” he concludes. As a result, a cashmere crew sweater that sold for $125 in 2015, is now selling for $100. In an infographic outlining just how much it costs to make the sweater, Everlane illustrates that the same sweater would sell for $210 at most other retailers.
Image via Everlane
Is Everlane’s aim to remain radically transparent at all costs a noble feat? Absolutely! But is this a feasible move for craft brands?
You get what you pay for
As Racked reports, “Everlane knits its $100 sweaters at a factory in Dongguan China, which (like all the brand’s factories) has been closely vetted and monitored for quality control and ethical labor practices, and where the cost of labor is far cheaper than at any European factory, maximizing the savings passed on to the consumer.” However, when you consider that mills in Italy and Scotland have been manufacturing cashmere products for hundreds of years (compared to the 35 years China has been in the market), the question of price becomes a bit of a different story. Essentially, you get what you pay for – and companies using these mills, which are by all accounts the best in the biz, price accordingly.
Another thing to consider are the different grades of cashmere (Grade A, B, and C). Customers buying a Loro Piana crew neck can, of course, expect the highest Grade A quality (and a hefty $900 price tag). However, Everlane offers a lower quality of Grade A cashmere. By comparison, fast fashion retailer Uniqlo offers affordable blends (both in grade and materials) for as low as $40.
There are many factors that play into why and how Everlane is able to offer good quality cashmere sweaters at a relatively affordable price. And while it’s an interesting concept, it probably wouldn’t hurt to do your research when it comes to the cost of goods (and other elements that may also affect cost) before making a similar move. Whether you’re selling cashmere sweaters or wooden tables, one thing is for sure – it’ll certainly land you in your customers’ good books!
Follow her at @D_isforDayana
Latest posts by Dayana Cadet (see all)
- Hubba Supports Small Business Saturday - November 13, 2017
- The End of Trade Shows? Find Out How This CEO Grows His Wholesale Business in Just an Hour a Day - October 31, 2017
- Q&A with Darron Burke: Building a Top-Ranking Online Business - October 26, 2017