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 of the pricing structure in the fashion industry in general and with regard to AMELI.
How is a price calculated?
The final retail price consists of the Cost of Goods Sold (COGS) and operating costs.
Cost of Goods Sold (COGS)
The Cost of Goods Sold is the direct cost of the products sold.
Our COGS can be broken down into material costs, production costs, logistics, customs and payment fees. The main driver of our COGS is the material and production.
We source all our material transparently in Italy from renowned manufacturers to ensure 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 its price, which is why only our COGS often already exceed the final prices of fast fashion brands.
Traditional retail typically applies a markup of 5-7 to cover expenses like employees, marketing, tax, and legal costs, in addition to the cost of goods sold (COGS).
In contrast, direct-to-consumer (D2C) brands like AMELI bypass intermediaries, resulting in a lower markup of 2-3.
This enables us to offer a significantly higher value-price ratio.
Fair Fashion has a price.
We acknowledge that investing in an AMELI bag may require careful consideration for many individuals. Our priority lies in ensuring that you comprehend the value embedded in our bags.
When examining the production costs alone, reconciling the ability to produce bags under fair circumstances while maintaining a low retail price poses a significant challenge. Often, textile workers have to pay the price for cheap clothing.
The fashion industry faces the issue of opaque pricing and lack of transparency in supply chains, leaving consumers unaware of how much of their spending directly benefits those involved in the production process. Promoting effective communication is essential to raise awareness and establish transparency in the realm of fair fashion.