It’s no secret: fashion that is produced in a sustainable and ethical way comes at a higher price point.
To understand the price gap between fast fashion and fair fashion, it’s important to consider the true cost of a garment, how fast fashion brands manage to keep these costs so low, and the role of markups.
The Cost of a Garment
Due to the rise of fast fashion, most of us have become so used to inexpensive clothes, we often tend to forget what the cost of a piece of clothing consists of. At The Slow Label, we believe that it’s important for consumers to understand the true value of their garments, which is why we are committed to always being transparent about our cost structure.
Typically, the cost of a garment consists of the following components:
- Materials: Materials include fabric, threads, labels and other components of clothing such as rubber bands and buttons.
- Labor: These costs account for pattern-making, sampling and production of the garments.
- Logistics: Logistics costs include warehouse fees, shipping and packaging.
- Tax: In accordance with German law, we pay 19% sales tax.
- Company Expenses: Company expenses include costs like insurance, investments in future projects, website and transaction fees, marketing, and of course, wages for our employees, freelancers, models, photographers and consultants.
- Donations: We are committed to donating at least 1% of our gross sales to non-profit organizations.
You can also find specific price breakdowns by clicking on any The Slow Label product on our website.
What are Markups?
In order to pay for our company expenses, including wages and overhead costs as mentioned above, we add a markup, which then determines the final retail price. Sustainable production is not cheap and we pay fair prices to all our suppliers and everyone we work with, so often the true cost of our garments is as high as the final retail price of fast fashion items. To keep the retail price at a sustainable level, we add a markup that is lower than the industry standard. Most brands add a markup of x2, which means they multiply the true cost of their garments by two to determine their wholesale price. At least another markup of x2 is then added by retailers to reach the final retail price.
Take, for example, our €74 raffia bag, which has a true cost of around €27 (excl. tax). In traditional retail, the bag would cost €130 (including tax), but because we only add a markup of x2 and sell directly to our consumers (not participating in traditional wholesale), we manage to keep the retail price low.
The True Cost of Fast Fashion
Of course, fast fashion is known for being cheap, so it’s highly unlikely that you would find a product like our raffia bag retailing for €130 or €74. Let’s say, for example, a fast fashion retailer sells the same bag for €45 (incl. tax). The true cost of the bag would therefore be around €9 (most likely even lower).
But cutting costs like this always means that someone somewhere is paying, and in the case of fashion, it’s the people at the bottom of supply chains - from underpaid farmers and overworked sewers and seamstresses to mistreated factory workers. In fact, garments rank second in a list of products most likely produced by means of modern slavery. For example, a Bangladeshi worker would need to be paid 4.5 times more than the current minimum wage to afford a decent living standard and almost 9 times more to support a family.
“Cheap clothes are not cheap. Someone always has to pay for them. And that someone is a worker.” Kalpona Akter
And it doesn’t end there; overconsumption fuelled by fast fashion has a huge impact on the environment. According to the Panel on Climate Change (IPCC), the fashion industry produces 10% of global carbon dioxide emissions every year.
Its negative effect on the environment and millions of people globally shows that fast fashion might be affordable for consumers in the short term, but the true cost is certainly a much higher one.
A Different Approach: Cost Per Wear
Perhaps a better approach to comparing the price of sustainable fashion to fast fashion is the concept of Cost Per Wear.
Cost Per Wear, or CPW, describes the price you pay for a garment, divided by the number of times you wear it. Consider, for example, buying a garment for €100, and wearing it four times. The garment costs €25 each time you wear it. Increasing the number of times you wear the garment to 10 consequently lowers the CPW to €10. The CPW concept encourages us to think economically about our purchases and pushes us to buy high-quality, long-lasting clothes that cost more upfront but help us save money in the long run.
Unfortunately, the idea of CPW has been pushed aside by fast fashion brands, which want us to think of clothing as something disposable that comes and goes with trends and certainly isn’t made to last.
So, the next time you compare the price of a sustainable piece of clothing to fast fashion, think about the impact the production of the garment has had on the planet and garment workers, while also keeping the CPW concept in mind. Favoring quality over quantity can help you fill your wardrobe with clothes you actually love, keep textiles out of landfills and support the sustainable fashion movement, all while sticking to your budget.