01 May 2010

In which I edit down a NY Times piece to the relevant information

NY Times: Front Row | Eric Wilson | Why Does This Pair of Pants Cost $550?

[...] A distinctive design might strengthen the argument, but is $550 really a fair price for basic pants?

How about $480, for plain khakis from Michael Bastian? Or $495 for light cotton twill pants from Mary-Kate and Ashley Olsen of The Row? Or $595 if they are by Giorgio Armani? Or $780 for ones with elasticized cuffs from Bottega Veneta? Or is $350, as Thom Browne charges for chinos, the right price? The range suggests that since the luxury bubble burst, designers have no clue what customers are willing to pay.

[...]

Is it too much?

Not if that’s what people are willing to pay, [brand consultant David] Aaker said. [...]
The end.  There is no such thing as a "the right price" or "the fair price."  There is only the price that two voluntary parties will agree to.

By the way, the answer to the question posed in the title turns out to be: first the manufacturer pays for materials, then they pay for labor, then they add a mark-up, then the retailer adds a mark-up, then people buy them.

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