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Polo Puzzle: What Goes Into a $155 Price Tag?

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Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#21

Post by ashishgandhi »

lsb wrote: post #17
aresant wrote: post #11

Solving the "direct from wholesaler" for American made goods is a monster opportunity. $65 is a lot more reasonable that $155 and I'd buy twice as many at that price ;) Etsy comes close but a startup that focused on a niche and curating quality could be a fun and profitable challenge.

If you'd buy twice as many at $65 than at $155, then you've just proven why, to maximize profit, they should be selling it at $155 instead of $65. 155n vs 130n is pretty straightforward, and the point of luxury brands is that not everyone is wearing them.

Also if you can only produce n where n You can use the profit to create an umbrella brand and increase production. The extra items from the increased production (from the extra profit) can be sold at a different price under a different brand so to let people who can afford to pay more, pay more, and get to feel special.

Note: I think the OP was just trying to say if it costed less, he would shop more. He might not have meant he'll buy exactly double.

Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#22

Post by ricardobeat »

yummyfajitas wrote: post #19
GFischer wrote: post #18

Earlier quoted context omitted.

When shopping for a washing machine, I found some articles that claimed that the reason that Americans buy so many clothes and find that they don't last as much as the rest of the world, is because: 1) they use top-loading washing machines 2) they use dryers or even worse washing-drying combinated. While I don't doubt that Polo chooses good cloth, it's standard here in Uruguay for clothes to last that long. I've inhe…

This sounds like a huge waste of labor. Suppose making a shirt (of whatever sort of cloth) takes 5 hours of labor. If you hand wash and line dry, suppose that's 5 minutes of labor per wearing. If you wear the shirt every week for 10 years, that's 43 hours of labor on washing for 10 years worth of shirt. It would only take 25 hours of labor (compare to 48) to buy a new shirt every 2 years. And this also assumes your t…

What if the person doing the washing/hanging is paid even less than the one at the factory?

Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#23

Post by redsymbol »

As an entrepreneur, I'm wondering how the MacLanes got an article written about them like this in the WSJ. It's a major, major PR boon for their clothing business.

Are there any journalists or PR folk here who can comment? Or entrepreneurs who have had coverage like this for your own company(s)? How can other founders accomplish something similar?

Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#24

Post by dkrich »

lsb wrote: post #17
aresant wrote: post #11

Solving the "direct from wholesaler" for American made goods is a monster opportunity. $65 is a lot more reasonable that $155 and I'd buy twice as many at that price ;) Etsy comes close but a startup that focused on a niche and curating quality could be a fun and profitable challenge.

If you'd buy twice as many at $65 than at $155, then you've just proven why, to maximize profit, they should be selling it at $155 instead of $65. 155n vs 130n is pretty straightforward, and the point of luxury brands is that not everyone is wearing them.

Not to mention that it has been proven in many studies that what people say they would pay for something is never an accurate representation of what they would actually pay. The actual amount is almost always found to be lower.

Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#25

Post by yummyfajitas »

ricardobeat wrote: post #22
yummyfajitas wrote: post #19

Earlier quoted context omitted.

This sounds like a huge waste of labor. Suppose making a shirt (of whatever sort of cloth) takes 5 hours of labor. If you hand wash and line dry, suppose that's 5 minutes of labor per wearing. If you wear the shirt every week for 10 years, that's 43 hours of labor on washing for 10 years worth of shirt. It would only take 25 hours of labor (compare to 48) to buy a new shirt every 2 years. And this also assumes your t…

What if the person doing the washing/hanging is paid even less than the one at the factory?

If the maid's pay is 60% of the factory worker's pay, then you break even. I also ignored the time cost of shopping every 2 years to keep things simple.

The only point I'm trying to make is that durability and preservation of material goods is often overrated, and replacing things every few years isn't necessarily a bad thing.

Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#27

Post by ahsanhilal »

yesbabyyes wrote: post #16
ahsanhilal wrote: post #2

The hardest thing is logistics: delivering product orders on time as a small brand which outsources manufacturing is really hard. Big retailers, like Nordstrom or Macy's will give you a window of a week (maximum) and will not accept your orders if it goes over. Conversely, they also have set packaging and other compliance related requirements which will increase the cost / item. In particular they have these ERP syst…

In particular they have these ERP systems that small brands cannot afford. Smaller brands end up outsourcing being plugged into their ERP systems as well which will also increase the cost of the article. This sounds interesting, can you shine some more light on it?

https://www.nordstromsupplier.com/NPG/EDIcompliance.html

It's basically Electronic Data Interchange through which they make orders, track shipments etc.

Here is how a typical one looks like:

http://www.nordstromsupplier.com/Content/sc_manual/FLS%20810...

Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#28

Post by blahedo »

GFischer wrote: post #18
emehrkay wrote: post #6

I have a few Polo (Ralph Lauren) shirts that i wear that I bought in the very late 90s. I'm not saying that the 300+% markup is valid, but I've worn a shirt in three different decades.

When shopping for a washing machine, I found some articles that claimed that the reason that Americans buy so many clothes and find that they don't last as much as the rest of the world, is because: 1) they use top-loading washing machines 2) they use dryers or even worse washing-drying combinated. While I don't doubt that Polo chooses good cloth, it's standard here in Uruguay for clothes to last that long. I've inhe…

I believe this; I have plenty of clothes that I've been wearing since the mid-90s (and a few clothes I inherited that are even older), and none of it is luxury brand; but I do take care of them. It's also worth noting that some kinds of clothes can stand to be worn for multiple days between washings, and this is likely to extend their useful lives considerably.

Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#29

Post by ahsanhilal »

unohoo wrote: post #9

It is for this reason (2.x markups) that I am working on an ecommerce startup idea. I like the idea of selling actual product, making actual revenue and knowing what your margins will be. While manufacturing your own clothing is much more involved and logistically complicated, its relatively easier to become an online retailer and buy clothing at wholesale from existing brands and sell that. That also helps me mitiga…

I used to be in the fashion business for a while. I owned and operated a number of brands, sold to major national/international retailers. However, from my knowledge the major issue with ecommerce is stock/inventory. Inventory is a huge problem since it is a cash hoard, and because of ecommerce/ brick-mortar retailers die . The basic problem: you have to buy before you sell, and what if you buy wrong? Most retailers/e-tailers underestimate how big of a problem that is.

Also, a lot of times, retailers will have 30-60 day payment terms, which is basically the time you have to turn over the inventory. Also, if you do not sell (in fashion) it becomes stale quick and then you have to sell at discounted prices.

I am around to help if you need any advice etc. Have a decent amount of knowledge in this area.

Re: Polo Puzzle: What Goes Into a $155 Price Tag?

#30

Post by mhb »

redsymbol wrote: post #23

As an entrepreneur, I'm wondering how the MacLanes got an article written about them like this in the WSJ. It's a major, major PR boon for their clothing business. Are there any journalists or PR folk here who can comment? Or entrepreneurs who have had coverage like this for your own company(s)? How can other founders accomplish something similar?

See: http://www.paulgraham.com/submarine.html
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