We believe sustainability goes hand-in-hand with transparency — supply chain transparency as well as transparent pricing. You should know what you’re paying for so you can better understand the value of the garments you buy.
Therefore, we have followed the example set by other innovative brands and introduced more transparency in several aspects of our brand. This should be the new normal and we encourage other brands to do the same.
What is the true cost of our garments?
The true cost of our garments consists of the material and labor costs, logistics expenses and donations. In order to pay for our company expenses (like employees and freelancers, investments in future products, insurance, website and transaction fees and marketing) we add a markup, which then determines the final retail price.
A sustainable and ethical production is not cheap, which is why the true cost of our garments is often as high as the final retail price of fast fashion items. In order to keep our retail price at a sustainable level, we choose a markup that is lower than industry standard and skip the middle man. The Slow Label is sold exclusively on our website and in pop-ups. We do not wholesale our products to retailers.
How high is our markup compared to industry average?
Most brands add a markup of x2 (multiplying it by 2) to their true cost, which determines the wholesale price. This is the price retailers pay to purchase the goods and sell them in their stores. At least another markup of x2 is then added to the wholesale price, which results in the retail price. Luxury brands have an even higher markup!
According to this calculation, our €64 raffia bag, which has a true cost of around €27 (excl. tax), would cost €130 (including tax) in traditional retail. But because we only add a markup of x2 and sell direct-to-consumer, we manage to keep the retail price low.
If fair fashion brands add a lower markup, how come they are that much more expensive?
In order to answer this question, you have to look at this calculation the other way around: Let’s say a fast fashion brand sells the same raffia bag for only 45€ (incl. tax). This would mean the true cost is about €9 (most likely even lower).
The equation shows that someone along the supply chain is not getting paid enough. And it is most likely the person at the end of the supply chain: the garment worker or artisan. Considering this bag is handmade and takes about one day to make, this production price is shockingly low.
However, this is just an example. The problem with opaque prices and intricate supply chains is that consumers have no idea how much of their money actually goes to the people producing it. Even for fair fashion brands bringing light into the darkness is not always easy, as supply chain structures are still very outdated. But good communication and constant improvement are key in making the fashion industry more transparent. Read more about our improvement efforts here.
What makes up your price?
Here is the general structure of how our prices are made up. To view specific price breakdowns, click on any The Slow Label product on our website.
|Materials||This cost includes the purchase of the fabric, threads, labels and rubber bands. Some items, like our Basic Shorts, have a high material cost, which is due to components like (in this case) rubber bands. Other items, like our Cropped Tanks, have a relatively low material cost, because the garment only consists of fabric and threads.|
This is the price we pay the factory to produce one garment. It also includes the costs for pattern-making and sampling. The garments for our summer 2020 collections are made in Germany, which explains the higher production costs.
Logistics include the transportation of goods, fees and packaging costs.
|Company Cost||Our markup allows us to pay for our company expenses and invest in future products. This includes expenses like wages for employees and freelancers, insurance, website and transaction fees and marketing. Our markup allows us to pay everyone who works for us a fair price — models, consultants, photographers, factories and employees. It also gives us the opportunity to invest in future collections, since most of those production costs have to be paid months before the final product is sold to customers.|
|Tax||We pay 19% sales tax according to German law. This price does not include income tax.|
|Donations||We are committed to donating at least 1% of our gross sales to non-profit organizations. All donations made will be found on this page. We will be donating to different environmental and social organizations. If you have any recommendations, please feel free to reach out to us!|
Do you have any more questions? Read our FAQ page or email us at firstname.lastname@example.org