When it comes to transitioning to ethical fashion, one of — if not the single most — common barriers people cite is the cost.
So, this article will break down why ethical fashion costs more than fast fashion, why affordability is part of the ethical fashion movement, and how fair fashion brands can make their pieces more affordable, without sacrificing sustainability.[This post was sponsored by 2°EAST. All research was done independently and all opinions are my own.]
Why Ethical Fashion Costs More (Sometimes)
Looking at the dirt cheap prices fast fashion brands have thrown at us, (99% off sales and $1 Black Friday deals, anyone?) it’s not difficult to see how we lost sight of the value of clothing and other fashion purchases.
The unfortunate reality, though, is that somebody is paying for these dresses selling for less than the cost of a sandwich. There’s simply no way that brands can pay their factories fair prices that enable them to pay living wages when those blouses are selling for $8.
The thing is that ethical fashion will never reach the prices of ultra fast fashion — there are simply too many corners that have to be cut.
That said, ethical fashion is not always more expensive. In fact, many fair fashion brands sell reasonably priced pieces similar to brands on the high street.
In some cases, this is because these brands are using some of the strategies outlined below to minimize costs without cutting worker wages or making other decisions that go against their values.
Also worth noting, many designer fashion brands charging $2,000 for a pair of trousers are not necessarily more ethical or sustainable than mid-market or fast fashion brands. Expensive does not equal ethical. It doesn’t even always mean higher quality — it may just mean more money was spent on marketing or money profits ended up in the hands of the CEO.
But before we get too far into that tangent, let’s move on.
Why Affordability is Part of Ethical Fashion
While ethical fashion won’t ever be priced like ultra-fast fashion brands, this doesn’t mean that we can’t think about ways that ethical fashion can be more affordable.
Ethical fashion does not need to be a luxury. And although slow fashion purchases are about making mindful investments for the long haul, these purchases do not need to break the bank — and they shouldn’t be only available at prices that feel exclusive.
After all, part of ethical fashion is as much about inclusivity as it is worker rights and environmental concerns.
Plus, of course, I would be remiss to omit here that part of ethical and sustainable fashion is buying less in the first place by wearing what we have more, mending worn clothes, shopping secondhand, swapping & borrowing, and so on.
So, firstly, you don’t have to buy new to participate in ethical fashion and secondly, even if some of the individual pieces are more expensive, following the ethos #fewerbetter often means spending less overall.
The Business Model Shifts That Could Make Ethical Fashion Affordable
The question remains, then how could ethical fashion brands — and the industry at large — work to make prices more affordable while not sacrificing sustainability or underpaying the workers in their supply chain?
Here are some approaches that accessibly-priced conscious fashion brands like 2°EAST have been using.
1. Go Direct to Consumer
The frustrating truth about prices in fashion is that the vast majority of the cost the consumer pays doesn’t go into producing the actual product, and it certainly doesn’t get into the hands of the people who made that piece.
In the fashion industry, profit margins between 2x and 2.5x for both the brand and the retailer are standard.
Let’s take 2°EAST watches as an example:
Taking into account the costs for quality, responsibly sourced materials, fair wages to workers, and other factory overhead expenses, such as energy and real estate costs, it costs the brand $66 to produce each watch.
Following industry standards of 2-2.5x profit margins, the brand would then charge $132 – $165 for each watch. (2°EAST errs on the lower end of profit margins, and charges $130 for their watches.)
The brand or designer markup goes into things like marketing, research & development, and salaries for brand employees.
The next step in the ‘typical’ fashion supply chain is what creates the single highest price increase: Retail markups.
Typical retail profit margins in fashion are also 2-2.5x — and these markups are a multiplier of the brand’s price.
Continuing with the 2°EAST example, if this ethical watch brand decided to sell their watches to a retailer for $130, the retailer would then charge customers $260 – $325 for that same watch. (And if 2°EAST took a higher profit margin themselves, that watch could go for over $400 when all is said and done.)
To put it succinctly, because of markups, the end consumer is typically paying over 4x what the original garment, bag, or other item costs to make.
While there will always be some markups — as brands need to invest in their design, marketing, and product development — a direct-to-consumer model could mean that brands can sell their products for half (or less) of the price.
*Note: this is a simplified analysis and actual numbers may vary, depending on the brand and retailer.
2. Own Your Factory + Skip the Middleman
It’s no secret that fashion brands have outsourced (mostly to countries with lower wages and looser environmental and labor standards than their home countries) as part of their race to the bottom to get the lowest prices and highest profits.
In addition to lower wages, outsourcing enables brands to be able (for now, at least) to skirt responsibility for the conditions in the factories. Meaning they’re largely not on the hook for investments in improving safety measures, training workers, or transitioning to more sustainable practices.
But outsourcing still comes with a price tag — especially for specific and specialized products, like watches — because brands may need to work with an agent.
This agent is typically local to the manufacturer country and helps brands coordinate relationships with manufacturing facilities.
This can make the production process much simpler for brands, but there’s a catch. For one, the agent may not reveal to the brand where their products are actually being made, since these factory connections are essentially their business.
It makes sense that the agent wouldn’t want to give up information that could allow their clients to go around them, but it certainly doesn’t help the fashion industry become more transparent.
And, this agent charges a (sometimes significant) fee for their services — they may also charge their 2x profit margin.
Going back to our 2°EAST example, this means that a watch that costs $66 to make, may end up actually costing $530 — 8x the cost.
Here’s the breakdown:
- 2x for the brand + 2x for the agent = 4x.
- 4x * 2x for the retailer = 8x.
2°EAST avoids the large majority of these markups not only by having a direct-to-consumer model, but also by owning their own factory.
How is this possible?
Well, 2°EAST is co-owned by Sally — who is based in Hong Kong and is in charge of the brand operations — and Ron — who is based near Shenzhen, China and owns the manufacturing and assembly factory where 2°EAST’s watches are made.
Since the brand is co-owned by the manufacturing and assembly factory owner, this enables 2°EAST to skip the agent process, which gives them more transparency into their supply chain and saves them money on agent markups.
(Related Read: Who Made My Watch? Behind the Makings of an Ethical Watch)
Clearly, there’s a lot of excess waste — in more ways than one — when it comes to the many layers of a typical fashion supply chain. Which leads me to the next strategy to make ethical fashion more affordable.
3. Create Timeless Designs & Produce Intentionally
The rapid trend cycle of fashion means that items go in and out in a matter of weeks, sometimes days. Couple that with the huge quantities that big fashion brands produce and you have a recipe for waste.
All large fashion brands, from fast fashion retailers to luxury designers, have been found guilty of contributing to fashion’s waste crisis. It’s a massive industry-wide problem that will take a lot to address.
But one step in the right direction is to offer products that can be sold during any season or any year, as many slow fashion brands like 2°EAST do.
Because the remaining unsold products don’t ever become “out of season”, there’s no need to disregard them. Remaining inventory can simply continue to be sold the following season or year.
Many ethical fashion brands and small labels already implement this, but I also have been surprised to see some still operating on a very strict seasonal basis where they have new collections each season that then go on sale the following season.
But, by offering a more timeless selection (which doesn’t have to mean boring, by the way!) brands can sell through most of their stock, reducing their costs in the process.
These three business shifts are just a few of many approaches that could be used to help make ethical fashion more affordable.
There are several other innovative approaches — like a pre-order model or a pay-what-you-can sliding scale — that I’ve seen from slow fashion brands.
I also hope to see brands in general become less dependent on selling new items and integrate resale as a major part of their business. This would make it easier to shop secondhand from ethical brands: a win-win for sustainability and our wallets.
Thank you 2°EAST for sponsoring this post and for offering an example for the fashion industry on how it can increase transparency and create more ethical supply chains, all while keeping prices affordable for the consumer.