Buying pants without losing my pants!
May 11, 2016 7:30 AM   Subscribe

Does buying stuff on-sale or at a discounted price hurt the manufacturer?

I really like the philosophy about a company that sells clothing for men (more specifically their commitment to ethical sourcing and manufacturing practices) and I want to buy their stuff.

Problem is that their stuff is rather pricey for my budget (250-300$ for a pair of jeans).

With a stroke of luck I found a retailer that sells older models of this manufacturer's clothing for less than 25% of their listed price.

Yay, right? Then I thought that if I really wanted to support this company, I should put my money where my mouth is, and pay full price.
But then I thought, well maybe this company already got full price for their old models and this discount retailer is just clearing out those items that didn't sell.

Of course, my one- or two-time purchase per year isn't going to make this company successful, but it's important to me that I support those companies that are trying to make a difference.

The question is, by paying full price for recent models, am I supporting them more than by paying a discounted price for older models, or am I just supporting the middle-people (who might also be worthy of my support too!)

posted by bitteroldman to Clothing, Beauty, & Fashion (12 answers total)
The "percent of stuff that isn't likely to sell at full price but will probably sell later when we mark it down" is definitely part of their calculations before even starting their own business. It is part of fashion since day one. Bargain shop with glee, not guilt.
posted by sexyrobot at 7:37 AM on May 11, 2016 [2 favorites]

Think about what could happen to these pants:

1. Sold full price to retail store and sold full price to consumer. Company gets their full wholesale price.
2. Sold full price to retail store and sold at a discount to consumer. Company gets their full wholesale price.
3. Sold full price to retail store and never sold to consumer. Company gets full retail price (assuming store can't/doesn't return them). Company gets full wholesale price.
4. Sold discount to retail store and sold at discount to consumer. Company gets discounted wholesale price.
5. Sold discount to retail store and never sold to consumer. Company gets nothing.
6. Stolen from company and sold to consumer at any price. Company gets nothing.
7. Sold to retail store at full price, stolen from retail store and sold to consumer. Company gets full wholesale price.
So if the pants were somehow stolen directly from the company, then they get nothing. And it kind of sort of hurts them by creating a market for goods stolen from them. For pretty much every other option, the company is better off if you buy the pants at discount vs. nobody buys them.

There are also second-hand options (no money to the company, but builds their brand).
posted by If only I had a penguin... at 7:39 AM on May 11, 2016 [1 favorite]

The manufacturer already has its money. The money you spend goes to the retailer.
posted by justcorbly at 7:39 AM on May 11, 2016 [5 favorites]

1. I think it's good to buy directly from companies you support, just as it's good to subscribe to magazines you support rather than buy them on the news stand, or buy a book from an independent bookstore or a small press rather than from an eBay reseller. That's more reliable and direct money that goes to the company.

2. If you literally cannot afford a thing, buying it secondhand or from a discounter is not taking a sale from the initial company, is it? I have all kinds of secondhand things that I would never buy first hand, because I cannot pay $500 for a pair of boots or $200 for a scarf.

3. Do you need two pairs of jeans or one pair? If you need two pairs of jeans, then you need two pairs of jeans - you need to be able to buy two for $250, not one for $250. If you need one pair of jeans and you want to support the company, buy one pair at full price. I struggle with this, honestly, because I am perfectly capable of thinking "I need a hat; if I buy fancy used hats, I could get two, even though I only need one and already have too much stuff".

4. Up to a point, buying secondhand/discounted supports the firsthand market - it creates buzz, people often buy several secondhand and then switch to new, it makes people more likely to buy new knowing that they can resell, etc.

My feeling is that you should assess your actual needs and your actual budget, and support companies you like as directly as possible when you can afford to do so.

Wow, this is good advice. Now I just need to work on taking it myself.
posted by Frowner at 7:48 AM on May 11, 2016 [6 favorites]

Unless you suspect stolen or counterfeit merchandise (which, at less than 25% of retail? I might) then yes, the manufacturer has already gotten as much as they are going to get for these pants and they have almost certainly written whatever discount or even loss they took on them into their pricing structure.
posted by Rock Steady at 7:49 AM on May 11, 2016 [2 favorites]

I work for a clothing manufacturer. We already have our money. In fact a company selling old stock means they probably bought the old stock as a clear out from us. Which means we got some money for something obsolete costing us money in our warehouse. Win win.

If you want to help a manufacturer buy there stuff from anywhere, it creates demand. If you want to give us money buy it directly from our website. We get all the money as opposed to say 20% of the money if we had sold it to a distributor, who would then sell it to a store, who would then sell it to you.
posted by French Fry at 7:52 AM on May 11, 2016 [10 favorites]

French Fry has it right. You need to distinguish between the retailer and the manufacturer if you're trying to figure out how much you are helping/hurting the brand.

In your particular example, the manufacturer already got paid for those clothes on sale. It's the retailer that is selling them at a lower profit margin than before (and they are likely still making a profit btw, not a loss).

As French Fry says, you won't hurt the brand by buying from a retailer on sale, but it's certainly not helping them and you can help them a lot more by buying full price directly. This is because the manufacturer already made and spent the profit on those sale items long ago. By buying full price, from the current season, you are giving them revenue in the current sales period for them to re-invest.
posted by like_neon at 8:17 AM on May 11, 2016 [1 favorite]

Companies make a set number of pants, X. They don't want to make too few and not make as much money as possible based on their customer base. So they solve for X where X = some minimum number plus a little extra. At the end of the season, any of that "a little extra" gets marked down, to sell for whatever they can get for it. All of these prices are set so that the company turns a profit by selling that season's crop of pants. They don't lose money putting items on sale, they get a little extra by selling the "extra" pants at a lower price.

It's also worth knowing that companies like this know that most people can't afford $300 pants, but they still want hip young influencers to be able to wear their clothes. So they expect people like you to buy the pants on sale, where they may get a little less profit in dollars but can make up for that with brand awareness and reaching a demographic who can't always afford their stuff but will spread the word about it. In 10 years when you theoretically could be making $300 pants money, you'll still be loyal to them. As will your friends who you've told about your amazing pants.
posted by Sara C. at 8:33 AM on May 11, 2016 [1 favorite]

...I'm also wondering how you're confident that these aren't counterfeits? That's not a normal discount for last season's stuff or whatever. You can buy fakes of loads of brands that sell jeans in that price range.

I'd also question what making $250-$300 pants has to do with ethics. It sounds like you have bought into a slick bit of ad patter rather than decided to do something that will make an actual difference.
posted by kmennie at 8:37 AM on May 11, 2016 [1 favorite]

I worked for a clothing manufacturer for a while. It's a worse business than the music business.

The basement of the building was filled with old merchandise rotting away. Boxes full of orders that buyers had made and then walked away from, or things that hadn't sold at retail and then been shipped back.

Here's how it works. The manufacturer gets samples made of stuff they think will sell. They show it to buyers. The buyers say : We'll give you $6 per piece, here are the sizes and quantities we want.

The manufacturer has the garments made and shipped to the retailer. The retailer says "Thanks, these are selling slowly, we had to drop the price, so we're actually going to buy these from you for $4 per piece." Then later the retailer ships back the unsold ones and says "Here are the unsold units back, we're not paying for them, and we've decided to give you $2 per piece for the ones we sold, instead of the $4 or $6 we agreed to earlier."

The manufacturer hates this but accepts it because they kind of expect it - it's just the business. Thus, the ones who remain in business have figured out not to take any orders that will sink the business when it happens. Also, they're desperate not to endanger their future relationship with the retailer or the buyer (who will likely work for other retailers in the future) so pushing back is not an option.

There are other paradigms in which the retailer outright buys an order of clothes and the manufacturer gets paid a fixed amount no matter how many pieces sell, but a huge segment of the industry is super-craptastic and doesn't resemble "business" the way most USians imagine it.

It's really impossible to tell from the information given whether the manufacturer has gotten paid for the pants regardless of how the retailer prices them. Even if the retailer's going to retroactively take a discount from the manufacturer, what you're dealing with is excess stock that someone's going to have to pack up and ship and store somewhere. If the discount price doesn't make them attractive enough to consumers then the price could be driven down further, ultimately to the point at which the garments are destroyed, sent back to the manufacturer, or sold off to a liquidator. It could be that buying them at all helps the retailer and manufacturer because at least they get some of their costs covered and they don't have to deal with handling that garment further.

When it gets to that point, without knowing the actual situation, I think it's better for everyone if they sell the garment rather than not sell the garment. If it troubles you, get all the cheap ones you can and then buy a pair at full price.

While better-constructed, better-fit jeans should naturally command a higher price than a shoddy jeans, IMO there is no effing way a pair of actual mass-produced jeans costs enough to manufacture to justify a $300 price tag. In that range you're paying a premium for the brand, not for materials or build quality.

If they're making enough jeans that they can be sold at such a substantial discount with any significant quantities, then they're making too many jeans to support the brand exclusivity they desire, or they're not making their jeans attractive enough to the segment they're marketing to, or they have misjudged the value of their brand.

In other words, if they're liquidating jeans, whatever damage the manufacturer suffers has already been done, to themselves by themselves. It's a marketing problem in a shitty industry. You're not going to sink this company by buying discount jeans, and you're not going to save them by buying full-price jeans.
posted by under_petticoat_rule at 8:59 AM on May 11, 2016 [3 favorites]

thanks to all of you for your input! You've given me a lot to think about and consider!
posted by bitteroldman at 5:34 AM on May 12, 2016

i also never considered that the crazily-discounted jeans that I bought could be counterfits...
posted by bitteroldman at 5:35 AM on May 12, 2016

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