Why Branded Clothes are Expensive

CEBU, Philippines —  Everyone must be familiar with the experience:  You come across a fashion piece – whether t-shirt, pants, skirt or dress – that’s just so irresistible to let pass, but upon seeing the price tag your mind goes, “Oh my God!” And you feel your feet wanting to run out of the shop.

Really, what makes high-end fashion brands so expensive? Could it be that the fashion industry – the big name brands, in particular – is exploiting everyone’s innate vanity? Perhaps the big brands know that when people really like something, even if it’s something they can very well live without, they’ll do all they can to have it. Even among the masses, one would skip a few meals just to save up money for a new shirt.

The global fashion industry remains huge and enjoying good business despite the fact that in recent years the luxury goods industry has had a bit of a downturn. The slowing down of the economic growth of Asia does not seem to have an effect on the sales of high-fashion items. What could be the reason?

Ah, the fashion industry’s financial stability might be due to the sky-high prices that the industry charges for clothes, some of which don’t even look worth it. It also seems like the brand names itself is part of the consumer fascination. And the higher the price of an item, the stronger the consumer craving tends to be.

Actually, there are reasons for the expensive prices of high-end brands. Chris Rheeston, at www.linkedin.com, explains:

1. Production Costs. High-end brands tend to use higher quality materials. This has a huge impact on the price of the finished products. More so is the garments are made in countries in countries (say, Europe) with more expensive manufacturing and labor costs.

2. Limited Production. One marketing technique that high-end brands use is creating exclusivity with their clothing. For example, they’ll produce 100 garments instead of 1000. The manufacturing overhead cost will be distributed to only a few pieces and, thus, comes out higher. Also, with increased demand due to low supply, everyone will want to get their hands on something that’s “limited edition” even at a higher price.

3. Marketing. It costs a fashion brand good money to be visible in the market. They need to host a seasonal fashion show to showcase their lineup for the next season. And fashion shows are very expensive to host. The same is true with media advertising. The cost of these eventually trickles down to the individual price tags of clothes.

4. Research and Talent. High-end labels tend to spend a lot more time and do a lot more research when it comes to developing their products or even creating a whole new trend. A brand may have to create five or six different dresses in order to present only one of these; effectively, the great amount of time and effort poured into that one piece is costly.

5. Strategic Brand Positioning. In 2014, Burberry made a shock announcement that it was increasing the prices of its products in order “to make the brand more exclusive.” It appeared like the brand was moving its products out of the reach of the “less rich” customers. But it was actually a strategy for creating a status for the brand – so the customer wouldn’t just be buying a piece of clothing, but a status symbol too.

The prices that high-end brands charge for its clothes are often well-studied and have good basis. But sometimes these brands put expensive price tags on its clothes simply because… it can! It looks very arbitrary, yes, but it’s a reality. Fashion is a business and high-end brands may charge any price for its clothing for as much as the market will bear.