Denim HQ – Question What You Know

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I’ve been reading a lot of talk recently around various forums and discussion boards about the pricing of premium denim, people are rightly questioning why certain things costs so much and where their money goes. The most popular questions which are being asked seem to be…

Why can I buy my favourite Japanese brand X for so much less on Rakuten than I can from retailers?

Why is brand X from Japan so much more expensive than brand Y from Malaysia if they both use the same Japanese denim?

Why are some Japanese and American brands more expensive than other Japanese and American brands?

I think that these questions deserve answers, it is a subject I have tackled before on DHQ but it is also one well worth revisiting as there are many assumptions made and a lot of false information which seems to take root in the absence of fact. I am acutely aware that my work in retail and my association with certain brands might give rise to some people questioning what I say here, but trust me when I say that the answers I give are 100% honest and accurate. I am happy to hold this debate with anyone who wants to fact check me. So lets begin..

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Why can I buy my favourite Japanese brand X for so much less on Rakuten than I can from retailers?

Rakuten, Yahoo.jp auctions and other sources of acquiring Japanese denim are undoubtedly cheaper than Western retailers, there is no way to deny that. The cost comparison, and I have seen this worked out in black and white, is that in the west you pay between 125% and 165% of Japanese retail price, which is wildly different to some of the figures I have seen quoted of over 200%, I have yet to see an example of this. To answer why you have to understand a few things about the way Japanese companies work, what the associated costs are with retailing denim, and the true value which western based retailers offer to the denim community as a whole.

Fact 1, Japanese companies have a higher wholesale cost than just about any other companies in the world, what a foreign retailer pays for Japanese clothing is not a million miles away from Japanese retail price, and certainly not when compared to wholesale pricing on goods from other countries, additional to this most Japanese brands offer a cheaper wholesale price to domestic retailers than they do foreign, for reasons which I cannot fathom. This has an immediate impact on the pricing of any retailer as it squeezes the margin for their associated costs and opportunity for profit by a serious amount. The retailer is also subject to paying the shipping costs, import taxes, their shop rent (if they have one), advertising, photographers and a hundred other costs, some of which you probably don’t even realise, and all this before they can even think of making a profit. In retail they say that you should aim to make around 60% margin on everything that you sell, believe me when I say that no denim slinger is making anywhere near that amount which is why some may get sensitive when they are accused of ripping people off. Trust me when I say that if making huge amounts of money was all that retailers of Japanese denim were interested in then they have chosen possibly the stupidest way to go about making it, this is how I know that most denim retailers genuinely love what they do.

Fact 2, western retailers stock items and sizes for their customer base, Japanese retailers stock items and sizes for their customer base. You will find that many western retailers stock sizes and even items which are not available in Japan, and consequently not from Japanese retailers. This leads into the whole mess of attempting to return and get refunds on your purchases if they don’t work for you, not an easy thing to do and I speak from experience. Just about every retailer in the west has a clearly defined refund and return procedure which is easy to follow and gives you peace of mind that should something not fit you will not be left out of pocket. Foreign retailers, their customers and the community help to drive the innovation of the companies we love with their demand, without that there would be far less choice.

Fact 3, Unless you are supremely confident that your purchase will not only fit, but suit you and be of the standard you expect of it, isn’t it nice to have actual stores to go to and lay hands on these things to assist in your purchase decision? Sure you can research on the internet, get peoples opinions and study macro detail shots, but being able to either walk in and touch something, or have a retailer send you something to try is worth its weight in gold.

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Why is brand X from Japan so much more expensive than brand Y from Malaysia if they both use the same Japanese denim?

Cost of supply and manufacturing in some countries is far more expensive than others, whilst jeans companies from other countries can import their denim from Japan they cannot import the skilled labour which has produced jeans in the Japanese sewing factories for generations, that is not to say that the skill level elsewhere cannot be as good as Japan but it is to say that currently there are not many places where you will find the wares as uniformly exceptional as you will Japan, it is a craft and they have honed it.

There is also the relative expense of manufacturing in Japan when compared to other countries, the cost of living is higher, material costs are higher, design and print costs are higher so therefore it costs more to make jeans in Japan than it does elsewhere, but you do get a better (in my opinion) product. This will only become an issue if and when companies from countries who also produce jeans are able to attain the same standard as those from Japan consistently, and gain market acceptance (not easy).

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Why are some Japanese and American brands more expensive than other Japanese and American brands?

The answer to this is the same as it would be in any other industry, costs. Some brands invest in proprietary materials, some don’t, some design their media and patterns in house, some don’t, some outsource weaving and production to trusted collaborators whilst some prefer to manage every part of the process themselves. All of this leads to cost variation, which leads to price variation, all jeans are not created equally and therefore are not priced equally.

Every so often this issue of price and cost is brought up, usually by people who believe that they have found the answer to all their denim dreams in Rakuten sellers. I have bought from Rakuten before and had good experiences, I have also had bad experiences, the function of the retailer is take away that risk of having a bad experience by knowing their products intimately and provide safeguards to ensure that the customer is happy with what they receive. There is a price for this safety and convenience, along with the innovation it drives, whether you think that is a price worth paying is up to you but I would ask you to imagine a denim community without western retailers of Japanese brands, it doesn’t look good does it?

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One thought on “Denim HQ – Question What You Know”

  1. Good point regarding the lure of a cheaper purchase over the experience of going to an actual retailer. Sometimes the savings cant be ignored, for example i know exactly what size i need in TFH tshirts so I buy from Japan online and save virtually 50% from buying in the uk however last time I was in Rivet and Hide I was looking at Ts and was shown a Mr Freedom T that I would never have risked buying online, instantly fell in love with it and its now one of my favourite tops. I’m quite confident on the sizing of my next jeans purchase too but will pay the extra £120 odd to buy from the uk not only for the experience and service I’ll receive but also to support the store which is an important part to remember. If all us western denim heads continue to ship from Japan then people like yourself and Danny will eventually fold and that is in the long term a negative for us as consumers and members of the denim community.

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