How much would you pay for a pair of jeans?
Why do some jeans retail for hundreds of dollars when a typical pair can be had at your favourite department store for 30 bucks?
That’s the focus of a recent Wall Street Journal story wondering: “How Can Jeans Cost $300?”
Buying a “premium” product means paying extra for American materials and labour, custom embroidery on the pockets and waistbands, and, of course, a brand logo.
But the purchaser of $300 jeans is paying far more for markups, storefronts and marketing than the fashionable article of clothing itself. After all, denim is one of the most ubiquitous products going with over 100 brands available in the U.S.
A big part of the price of luxury denim market is in the multiple profit margins taken at each level of production, WSJ reports. Designers and retailers say the typical retail markup on all fashion items ranges from 2.2 to 2.6 times cost. And designer jeans are near the top of that list.
They could be cheaper, of course. True Religion, one of the industry's giants, estimates that its $300 jeans could sell for $40 if they were manufactured in China and sold, I guess, at Target. But they aren’t.
And there certainly are differences in quality between higher-end offerings and the generic brands from Costco. But, really, how much of a difference?
The question isn’t really how stores can charge $300 or more for jeans. It’s why anyone would pay that much to begin with?
If you found the perfect pair of jeans, how much would you pay for them? How much do you usually spend on denim?
By Gordon Powers, MSN Money
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