I came across this article this week, with a provocative title:
“How can Lidl sell jeans for £5.99? Easy … pay people 23p an hour to make them.”
I had never heard of Lidl before, but it is a German-based discount supermarket chain, a competitor to the UK’s Tesco (the best comparison Stateside may be a Walmart Supercentre, though this wouldn’t quite capture the grocery-focus nor the pervasiveness of Tesco; it’s been said that 1 of every 7 spent in shops in the UK is at Tesco).
We’re familiar with the cheap/fast fashion conversation, and with these jeans being made in Bangladesh, the discussion hits close. But, what is different about this article (and why I think it is worth reading) is its breakdown of the costs.
Between Basha & dignify, we are often asked about how much of the money goes to the women who make our blankets. I am very committed to transparency and information for consumers in the buying process, but we never share these specific details.
We’ve explained a lot about where the money goes when you buy a blanket, what fair trade certification means, & why our blankets are priced as they are.
But, in North America, we don’t have a category to understand the cost of living in a country like Bangladesh. Any amount of wage, especially as relative to the final product, sounds absurd.
We also, generally, don’t have any idea of how much our everyday items actually cost to produce. One statistic I like to share is that typically in the market, products that are being imported to sell in North America should have a cost-to-produce that is 5-10x lower than the final, shelf price. 5 -10 TIMES!
Think about your coffee mug, your jacket, pair of glasses, keychain… the list goes on & on of our everyday goods. If they were imported, they likely cost waaay less than you would have imagined to make.
At dignify, we are a for-profit business, but the cost of our goods (because they are fairly made by real humans whom we treat with dignity) is much higher, and our margins for profit - and for error - are much lower. This is why fair trade and handmade articles is not a booming business; honest, fair production requires a financial sacrifice on the part of the retailer, who could otherwise easily have a much tidier profit.
What I like about this article is that it takes us through the journey of this pair of jeans: where each & every penny goes (well, pence, as it is an article written in the UK). It shows all the different costs of the material & labour, as well as each business entity that touches the product on its journey, and the cut that they receive (shipping, warehousing, importing, taxes, etc.).
I think it is enlightening to explain (and for us to understand) how complex the production process is, and just how many people get pieces of the pie. As a retailer, and as someone who writes about shopping & the goods we own, I really appreciate the expanded look at all the crucial (but mostly invisible) bits of a business. (The illustration doesn’t even delve into any of the retailer-side expenses like lights, staff, etc.)
But, I am in NO WAY advocating that this description provides a reasonable business model. One could read this and think,
we should sympathize with & celebrate these retailers who sell for a lower profit margin. They are getting us what we need & want without taking too much off the top!
No!
The article also reveals the devastating reality of these very low margin, attention-grabbing products. There is so little room for the for-profit business to make any profit that each penny must be scrutinized and every possible corner be cut.
You find this sometimes with inferior quality materials (like a wool sweater that pills because of the nylon supplemented to decrease costs). Or, in other cases (like this one, where the jeans are 100% cotton): the labour.
Headline-grabbing “great deals” like this create a false reality that it is reasonable to buy clothes at this cost. Even a glance at the price of USA-made jeans and the disparity between the two should raise the red flag that the true cost of $5.99 jeans is being paid… somewhere. Businesses that imply anything else are doing an incredible disservice to our own culture, which falls prey to false & unreasonable expectations; and, obviously, their impact on the cultures who produce these goods is more than disservice, it’s oppressive injustice.
I think that businesses have a responsibility to be sensible! To look at the long game and the big picture. This kind of financial upturn is not sustainable, and will make it more difficult even for themselves in the future.
And for us, as consumers, I think that we have a responsibility to decide when enough is enough. To not be swept up in the craze of inexpensive goods whose deals are "too good to pass up". If it is going to end up in the bin or gathering dust in the drawer, please, do not feed the monster. Say when. Because our voices speak louder than the voice of an underpaid woman in a Dhaka factory.
In sum: read this article! Weigh in your thoughts & tensions in the comments below.
