Sustainability doesn’t work without transparency. We think that our customers ought to know what they are paying for.
Therefore, we want to give you an understanding about the pricing structure in the fashion industry in general and with regards to AMELI.
How is a price calculated?
The final retail price consists of Cost of Goods Sold (COGS) and operating costs.
Cost of Goods Sold
Cost of Goods Sold (COGS) is the direct cost of the products sold.
Our COGS can be broken down into material costs, production costs, logistics, custom and payment fees.The main driver of our COGS are the material and production costs.
We source all our material transparently in Italy from renowed manufacturers to ensure a very high-quality.
Also, the bags are handmade by a small family business in northern Italy, where, compared to other South/East European and Asian countries, much higher labor costs arise.
An ethical, sustainable production has it's price, which is why only our COGS often already exceed the final prices of fast fashion brands.
Operating Costs (aka. brand's mark-up)
In addition to the COGS, every brand needs to cover the expenses of employees, marketing, tax, legal, etc.). For that to do so, usually the brands add a 2-3 mark-up on the COGS.
For brands that sell their products via retailers to the customers, the retailer then ads an additional 2-3 mark-up to cover the expenses.
Direct-to-consumer brands (D2C) like AMELI cut the middle man and sell the products directly to the customers, thus we can offer you a very high value-price ratio. As emphasized on the graphic, a product with 100 € COGS costs at AMELI 250 €, while it would cost 625 € in the retail store.
Fair fashion has a price.
We are aware that almost 500 € for a bag is something, the one or other needs to sleep over for a night. For us, it is important that you understand the value of the bag.
If our production costs are already at 193 €, how can bags be fairly produced with a retail price of 30 €? With all the mark-ups, the production costs (material and labor) of the bag are below 5 €.
The problem in the fashion industry are opaque prices and intransparent supply chains, so that consumers have no idea how much of money spend actually goes to the people producing it. For fair fashion, this communication is key to raise awareness and to make the fashion industry more transparent.