Thanks to our guest author, Hazel Garcia of Investment Zen, who has provided us with this infographic showing the cost breakdown of pricing of a shirt. Branding and marketing costs also need to be considered, and in the world of luxury, the markup for added value – the brand magic – will be substantial.
Think about the last time you went shopping for a new shirt. What were the deciding factors in buying it? Was it the fit? The design? The price? For most people, the price is usually the deciding factor. Do we find more value in the shirt we purchase than the price we pay for it?
While the price can vary from shirt to shirt, they all have basic costs that need to be covered. For a shirt to be created, it needs a few steps. Design printing, materials, shirt design, yard spinning, and shirt labor are all essential requirements. Based on an average of $15 per shirt, production costs cost about $3.15. The shirt is then sent to a wholesaler for further distribution.
Wholesale companies not only need to cover their costs, but need make money as well. With the small cost dedicated to storage and shipping, the wholesale companies add an average of $6.30 for a markup. Markups account for about half of the final cost in this profitable chain of shirt production.
The final price you see is a combination of factors to make sure all participating companies make money and can continue producing and distributing product.
Take a closer look into what goes into the entire cycle of creating, distributing, and selling a shirt. The infographic below breaks down the steps and costs of shirt production as well as what percentage of the final price tag it makes up.