The "true cost" of clothes has been a big topic amongst environmentally conscious fashionistas for a while. The term is largely associated with the documentary of the same name, which highlights the human and environmental impact of the fashion industry, but, lately, publishers like British Vogue have been taking "true cost" literally and reporting on the price that clothes should sell for based on their worth.
Consumers have been trained to believe that basic t-shirts should cost $5 and sales and discounts are normal. That is not true. The typical profit markup from the cost to make clothes is 2.2x — although some brands use a markup as high as 8x. If the brands sell through retail stores like Nordstrom or Macy's, another 2.2x markup is applied. That means if you pay $5 for a t-shirt at a retailer, then the breakdown is roughly $2.73 in profit for the retailer, $1.24 in profit for the brand selling the shirt, and just $1.03 covering costs associated with making the shirt. The costs associated with making clothing includes design, material, labor, packaging, shipping, and duties if shipping from out of the country. Labor workers and material are usually the first to be skimped on when a brand is trying to lower the cost even further. This is how we've gotten sweatshops and cheap synthetic material. It is evident that the "true cost" is more than $5 if the shirt is being produced ethically and sustainably, but consumers still remain wary of paying more.
Last year e-commerce platform, Nosto, surveyed 2,000 U.S. and U.K. consumers and found that while 52% of shoppers want brands to produce more responsibly, only 29% would pay more for sustainable or ethical clothing. The study also found that 62% of consumers would like responsible brands to offer discounts or sales. As a result, brands have started increasing their profit margins to account for inevitable consumer demand for sales. Unfortunately, raising the price doesn't help with the sustainable fashion industry's reputation that its clothes are unaffordable and only for the rich.
Luxury fashion brands have a similar reputation, but instead of getting slammed, consumers chose to save to buy something from Gucci or Louis Vuitton. Why don't consumers do the same for sustainable fashion? Because it is viewed as "unethical" for clothes that are supposed to be good for people and the planet to only be attainable for particular consumers. Furthermore, luxury fashion is viewed as a splurge purchase, but sustainable and ethical brands are creating clothes that consumers would wear every day and would theoretically replace the H&M and Gap dresses and shirts you most likely have in your closet. Most consumers shop several times a month or season, and when you have sites like Women's Wear Daily recommending that only 5% of your take-home pay be spent on clothing, then responsible fashion starts to look a bit too expensive. Say your take-home pay is $3,000 a month, then according to WWD, you should only spend $150 per month on clothes. But if one dress from Christy Dawn — a sustainable brand based in California — costs $220, then you could only buy one dress every one-and-a-half months. H&M, on the other hand, is selling dresses for $20, meaning you could buy at least 11 dresses during the same time period. The standard answer to the complaint that "sustainable fashion is unaffordable" is "buy less" but with the same publications telling consumers how much to spend on fashion, also encouraging them to buy into the latest trends, it is hard to buy less. Quite frankly, even if you don't care about trends, why would you choose to buy one dress instead of 11 for the same price? That is the question many consumers are faced with and will continue to ask until fast fashion brands finally acknowledge that clothes cost more a few dollars.
Luckily, younger consumers are moving away from trends and are more aware of the "true cost" of clothing, even though brands try to hide it. While the Nosto poll surveyed consumers across all age groups, a separate data grouping by Nielsen Holdings, which polled 30,000 consumers in 60 countries, found that just less than three-quarters of Millennials surveyed are willing to pay more for sustainable and ethical clothing. This presumably is also the case for the younger Gen Z consumers who are more prone to secondhand shopping than older generations. As thrifted and vintage pieces become more popular and fast fashion continues to earn a bad rep amongst young shoppers, buying new clothes may be viewed as a luxury and something that you save up for. In that case, $220 dresses would not seem unreasonable or unattainable for the average consumer; it would be a splurge, yes, but affordable for once or twice a year. In order to get to the point where secondhand clothes are the norm and new sustainable clothes are a luxury, though, consumers have to be educated about the impact of fashion on the environment and the consequences of cheap fast fashion and constant sales.