Price Matters

In my mind, it is very clear that we as consumers are demanding impossible prices for the clothing we buy. Since we hold the purse strings, our wish actually does become the industry’s command – it may seem like the retailers and brands have all the power, but if we aren’t buying? They’re SOL. Just take a look at the record number of retail bankruptcies this year.

Circling back to my original point: we want cheap prices. As the industry bends to accommodate this perceived need of ours, pressure begins to build. Everyone has margin goals they’re trying to achieve, from the retailer to the vendor and the factory – no one wants to budge in this arena. So, as the customer asks for cheaper prices, the retailer presses the brand for lower costs and for goods with higher markups. The brand then turns around and presses their factory for better pricing – sometimes the factory will be able to negotiate higher order quantities in exchange for bulk volume discounts, sometimes they just have to make it work for fear of losing the brand’s business entirely. And where does the factory turn to release this pressure, you ask? Well, there’s always their employees…

A perfect example of this process recently surfaced in the news. In February, Walmart held a conference with its major brands to make a proposal: in order to maintain its reputation with consumers as the retailer with the lowest prices, Walmart called on these brands to slash prices by 15%. If you’re a vendor at this meeting, you just felt the crushing weight of dread descend on your shoulders. There is no room to negotiate here: either (A) you make the necessary changes, or (B) you lose what is probably your largest account – you can bet your competitors will be more than happy to fill in for you if you choose Option B.

At every point in this scenario, the players are maxed out: they are giving as much ground as they can in hopes that the orders will keep coming (and ideally increase in volume). There is no flexibility – any small fluctuation could upset the entire chain. Does it seem likely that anyone in this situation would be thinking about the environmental consequences of production, the life cycle of their product, or the well-being of the employees and communities they impact? Not exactly. To be fair, that might not be because they don’t care about these things. Intentions aside, they just don’t have the bandwidth – they lack the capacity to act. The problem is that choosing blindness and ignorance in this area ultimately reaps the same harvest as truly corrupt intentions: both avenues contribute to the perpetuation of a broken industry.
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