The journey from India and Brad Pitt’s legs. What hides behind the jeans price

Hunting for the perfect jeans may often be a tough challenge—also for your wallet. Why the almost identical pair of jeans in one store can cost so much more in another? We’ve decided to investigate the price of jeans, every button of it!

Almost everyone has this one immortal pair of jeans in the closet. In Ireland we buy more and more jeans and it doesn’t seem to get boring. But do we really know what’s behind every pair of jeans? Why in one store for almost identical jeans we pay few times more than in another? We’re going to look into the price of jeans and check how their journey looks like. Buckle up, we’re going to travel halfway around the world!

Every button counts

In our example we looked into the pair of jeans from popular chain store. Its retail price is €38.

The journey of our jeans starts in India. The production cost is the first component of their price—not so big though, around ⅙ of what we see on the price tag. Still, €6 is not that cheap, comparing to the costs of production in Vietnam, Pakistan or Bangladesh. Jeans can be made a lot cheaper in those countries.

The higher production costs depend not only on the employees’ salaries (and the working conditions) but also the jeans’ design. Every additional pocket, button or stitch means at least few cents more. While planning mass-production every cost matters. Also the kind of cotton the jeans are made of is significant—the better the quality, the higher the costs.

How much money does the manufacturer make?

The finished jeans leave the factory to go through the wholesaler, warehouses and, eventually, end up in the store. Of course the transportation has its price. When buying jeans we pay for the container they travelled in, their insurance and customs duty. Summing this up—around €1.60 added to the price tag.

The manufacturer sells the jeans to the distribution, of course charging with adequate margin. In our case it’s around 4% of the whole price. However, more luxurious brands charge with much higher margins, up to 50%. Also wholesalers and retailers add their two cents. The latter take around half of the price. Of course, it’s not a pure profit—after all, they have to pay for employees’ salaries, taxes and bills. In addition, both manufacturer and retailer have to pay for administration and marketing.

Last but not least tax at 23% rate is added.

Tighten your belt in order to buy jeans

Our chain store jeans priced €38 don’t cost so much compared with the prices of the most famous brands. Why the jeans giants want so much money from us, when many of them pay for the production even less than in our example?

It’s easy—they know exactly that when we choose the brand we want to identify with it. That’s why they pay millions of euros every year to advertise their products. Billboards, ads in fashion magazines, fees for the celebrities. To put Brad Pitt’s jeans on your legs, the companies jack up the margins, keeping in mind that we’re willing to pay more for the high-end products.

It doesn’t seem like we’re gonna get bored with jeans soon. Marketing and prices spiral is at its best. That’s why the next time you choose your jeans, think twice—what do you really wanna pay for?

The information stated above are based on the manufacturers’ reports, international carriers’ offers, data sets found on the professional websites and more. Of course, they’re not a perfect reflection of the reality but only estimation that we used to show the products’ journey to the stores. Not many companies share the details of manufacturing and distribution of their products. By taking a closer look at their prices we want to encourage discussion and above all—conscious shopping!

About VAT: this tax is charged on the net price, which means net price = 100%, gross price = 123% (100% + VAT 23%). Consequently, VAT makes approximately 19% of the gross price.

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Check what you pay for

Take a look at our Real Price of Goods series and find out what’s the price of: