Denim HQ – Your Jeans Cost How Much?

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Some of my friends think I must be crazy to pay over $300 (£225) for jeans, in fact I would estimate that 99.9% of people in the world would think the same thing. There is no denying that the top end of premium denim is expensive, but is there an element of paying for the label as there is in high fashion or are the costs justified? I am in a privileged position as a denim head who can also look behind the curtain of retailing , thanks to my involvement with NoKipple, so I’m happy to give a little bit of an expose of why your jeans cost so much.

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Starting at the very beginning of the supply chain it should be fairly obvious that cotton grown in the USA, or the famed long staple Zimbabwe cotton favoured by many companies is going to cost more than cotton grown in places like Turkey, Pakistan (home of the worlds largest denim company) and China, so your raw material costs are instantly more than high street jeans. Moving on to manufacture, and I am not breaking any secret code here when I say that having things made in Japan in damned expensive, far more so than most other places in the world, so that includes weaving the denim, casting the hardware, buying zippers and clips and actually having the jeans stitched together. The places which do these operations are increasingly rare and small concerns, therefore competition to get things done in these factories is fierce and prices are high, with minimum order quantities ever increasing.

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Of course having jeans made in Japan by a high end denim company comes with some advantages, not least of which being that you can pretty much rely of the quality of the material and the manufacture. The Japanese eye for detail really is second to none, but as Japan is a relatively wealthy country then its workers are very skilled, proud of their craft and quite well paid, this again adds to the manufacturing cost.

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Unlike most other places in the world where wholesale pricing is set at around 40 – 50% of retail, in Japan the standard for exported goods is higher, quite considerably higher (I’m not going to reveal this exactly in fear of having my membership card to the guild of denim retailers revoked). This is why most sensible folks will stay away from retailing Japanese denim, it is something that requires testicular fortitude and an appreciation that you probably won’t get rich from it.

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For Western brands or retailers wishing to sell clothing made in Japan, or other places in the East, we now come to my least favourite expense (not that I have a favourite), which is tax. I am unfamiliar with what our friends across the pond pay in the form of tax and import duty, but in the UK on jeans it amounts to around 25% of the declared value plus shipping, it’s fairly expensive and after the initial outlay on product you find that this is a retailers biggest expense.

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Finally we come to the part where the retailer or brand really gets tears in their eyes, profit. Any good retail model will tell you that 50% is a decent profit margin to aim for, 60% is golden and below 50% really should only be for new businesses and for products where the shortfall can be made up elsewhere. We who retail Japanese denim would absolutely love to be able to work to these margins, we would be dancing around our denim covered living rooms in joy if this were the case, but it isn’t. In truth the margins to be made doing this are pretty awful, especially when you are only moving low volumes, it really is a labour of love.

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I read a few people proudly declaring that they purchase their jeans from places like Rakuten for less money, I also read a lot of these same people struggling to return said jeans when they have screwed up the sizing, or the cut doesn’t work for them. I have bought jeans from Rakuten before, a pair of Samurai S5000BK, and it worked for me, but I do imagine that it would have been just about impossible to return them had it not worked out. Having a local denim store, or at least a store who speaks the same language and has a defined returns policy is (in my opinion) far more important than a $50 discount because you will lose far more than that in both money and time if you have to sell them on.

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So there you have it, I could buy cheaper jeans but the quality would not be up to scratch and I could not guarantee ethical production so I don’t. You may still consider that the jeans are a rip off until you think about other areas of retail. A few years ago in London I picked up a bag by an extremely well known designer label to see how much it cost, £425, it was made of cotton with leather trim and manufactured in China, what is the justification there? The Blu Ray discs which Playstation and Xbox One games are written on cost pennies, after recouping the development costs the rest is pure profit, football (soccer) shirts have been in the UK press recently as the new England shirt costs £90 but the manufacturing cost has been revealed to be less than £5 !! Taken in a greater context the premium we pay for our chosen type of clothing does not seem so bad after all.

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