Pricing Transparency
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Price transparency exists when a company shares information about its quoted prices with customers in a clear and comprehensive way. Such information may include price-setting, price-changing, or cost breakdown information (e.g., designated mark-up, motive for future price increase, direct unit cost).
One of our core values is Transparency and “the not hiding anything” is a necessary and sufficient condition of being Sustainable. You should know what you’re paying for so you can better understand the value of the garments you buy.
Therefore, Fitolojio have followed the example set by other innovative brands and introduced more transparency in several aspects of our brand. This should be the new normal and we encourage other brands to do the same.
However, transparency mainly refers to the practice of publicly sharing information about how, where and by whom a product was made. How the process can it be made better? How can it have a smaller environmental impact? How can our business help and progress local communities? It asks also the question, are we making this the best way possible, and how can we do better?
Fashion Revolution Transparency Index contains information about top brands' supply chains, production lines and social and environmental impact.
For a company, being transparent about its pricing strategy builds trust among consumers. If a company is opaque with pricing and refuses to disclose information, consumers may think that it has something to hide. The act of sharing confidential information such as a pricing strategy or cost breakdowns signals to consumers that the company is willing to disclose intimate information with them.
Sustainable fashion is not definitive.
It is hard to say definitely that something is sustainable because sustainability is often relative.
For example, cotton is better than polyester, organic cotton is better than cotton. No company is perfect, but it’s important that everyone try to improve and make their supply chains better.
See below for a step-by-step guide covering Fitolojio’ Workshop pricing policy.
1. What are the three components of the garments cost?
The cost of Fitolojio Workshop garments consists of the
Raw material
Production costs
Logistics expenses
In order to pay for the company expenses - overheads (like raw material, key partners, studio, freelancer - photographers, investments in future products, insurance, website and transaction fees and marketing) we add a markup, which then determines the final “retail” price.
A slow and ethical production is not cheap, which is why the true cost of our garments is often as high as the final retail price of fast fashion items. In order to keep our retail price at a affordable and sustainable level, we choose a markup that is lower than industry standard (4x -10x).
Fitolojio Workshop is sold exclusively for the time being on our website and sometimes for a short period in Pop Ups or small local retailers. We do not wholesale our products to retailers at this moment. (In case that this will happen, we will notify you and we will update the cost breakdown equation respectively)
2. How is our markup compared to industry average?
Our markup is between 2 and 2,5. Most brands add a markup of x2 or x3 the minimum (multiplying it by 2 or 3) to their true cost, which determines the wholesale price. This is the price retailers pay to purchase the goods and sell them in their stores. At least another markup of x2 is then added to the wholesale price, which results in the retail price. Luxury brands have an even higher markup (Industry standard is more than 4x -10x)!
According to this calculation, our €105 Lachuria one-of-a-kind top, which has a true cost of around €50 (excl. tax)(Raw Material + Production (Pattern making + sewing), would cost €280 (including tax) in traditional retail.
3. If ethical and slow fashion brands add a lower markup, how come they are that much more expensive?
In order to answer this question, you have to look at this calculation the other way around: Let’s say a fast fashion brand sells the same “Lachuria Top” for only 75€ (incl. tax). This would mean the true cost is about €18 (most likely even lower).
This calculation shows that someone along the supply chain is not getting paid enough. And it is most likely the the sewer or the artisan. Considering this top is handmade and takes about 2 to 3 hours to make (from 3 pre - loved garments, cutting, matching, pattern making, sewing, this production price is again low.
This is only an example. The problem with darkness and contentious prices and complicated supply chains is that consumers have no idea how much of their money goes to the people producing it (e.g., low wage, child labor, unsafe working conditions). But good communication and constant improvement are key in making the fashion industry more transparent.
4. What are the components of our prices?
Here is the general structure of how our prices are made up. To view specific price breakdowns, click on any Fitolojio Workshop product on our website.
Cost Breakdown
Raw Materials: This cost includes the purchase of the fabric, threads, care labels, buttons*, bands, embroidery stiches, zippers*, lining*. Some items, like the "CHIONODOXA" upcycled-blanket coat have a high material cost, which is due to components like (in this case) the vintage woolen blanket fabric. Other items, like the "COTONEASTER" upcycled coat, have a relatively low material cost, because the garment only consists of recycled fabric and trims. (* Note: Most of the time, due to upcycling process we use, the lining or buttons and zippers come from the pre-existed garments, so the trim cost for these cases are low.)
Production - Labor Cost: There is no factory here. 70% - 80% of the produced garments, are made by the founder following the whole process (drawing, designing, pattern making, cutting, sewing, fitting ), but the company is collaborating with skillful and local artisans in Amsterdam for fabrics that are very thick for our studio sewing machine, Fitolojio Workshop shows respect to these skillful people working for the result. The garments for any collections are made in Netherlands, which explains higher production costs. The cost is 18 - 20 € per hour for designing, pattern making, sewing. Therefore, the editing - deconstruction process in not charged and if yes, we will let you know.
Logistics: Logistics include shipping fees - (importing Vintage garments), packaging costs and transaction fees. However, there is a low- carbon transport as everything crafted at home or in a atelier close by to our home studio in Amsterdam.
Overheads and Markup: This cost contains our expenses like website maintenance, studio or pop up rent, models, other overheads and marketing. The markup allows us to pay for our company expenses and invest in future products. Our markup also allows us to pay everyone who works for us a fair price.
Taxes: We pay 21% sales tax according to Dutch law. This price does not include income tax.
Email us at info@fitolojioworkshop.com I am so happy to answer any questions you may have.
Regards and Love,
Katerina