The Cost of Manufacturing Ethically in Australia.

April 17, 2018 13 Comments

 The other day, I received my first ever Instagram comment that my products are lovely, but just too expensive.

It did not make me angry, it didn’t make me sad, but it did remind me that there is a whole big world of people out there who shop in different ways. They may not believe in what I believe in, they may not agree with what I do or how I think, but in a lot of cases, I think they just do not know that there are many ways of manufacturing, of creating and of bringing your products to life and that some ways cost far more than others.

Rather than get angry, I decided to write a blog post on the cost of manufacturing our pj’s – something I have been meaning to do for a long time. Transparency is something that is so close to my heart. If more businesses showed transparency in what they do, I think the world would be a very different place. I want my customers to be able to understand why they pay more for my pyjamas than those from many main stream brands. I want other brands who are interested in manufacturing in Australia to understand the costs. I also think it is important to allow people to see inside a business or brand, so that perhaps they start to question why not all businesses are transparent.

So here goes, a close up look at how our Pj’s are made and why they are priced the way they are (for the sake of brevity I am not making this hugely detailed. If you have ANY other questions, please leave them below so that others can see them too, or feel free to email me)………

The two primary costs in our PJ’s are the fabric costs and the cost of paying fair wages to those who actually Cut, Sew and Trim our garments (CMT).

Fabric - Our GOTS certified organic cotton costs $16.50 per m. This cost encompasses the cotton yarn, the custom colouring of the yarn, the knitting of the fabric, and the screen printing of our designs. The GOTS certified organic cotton plants are grown in India and the cotton is spun into yarn in India. The knitting of the yarn into fabric, the colouring of the fabric and the hand screen printing of the fabric are all carried out right here in Australia.

Cut Make Trim – The CMT of our garments is exactly what it sounds like – the cutting of the fabric, the sewing of all styles and the finishing of all pieces (snaps, buttons etc). Of course, this cost varies from style to style. To give you an idea, here are the CMT costs for a few of our garments:

• Pj sets $12 for pants and top
• Harem Romper $16 including press studs

Our CMT is carried out by a wonderful family owned business in Sydney, staffed with one amazing cutter, and a dozen ladies, who sew better than I ever will. This wonderful company are non stop busy making for some of Australia's most well known brands and we are so proud to be counted among them. 

On top of these costs to actually have the item constructed, the following "additional costs" are also factored into each garment:

Swing tags - Printed in Australia

Business cards - Printed in Australia

Packaging materials – brown paper etc

Sew in care labels - Made in Australia

Graphic designer costs $200 - $500 per design

Screen print set up costs - $200 per design

Website hosting

Public liability insurance

Domain names

Marketing

Market stall fees

Transaction fees each time an order is processed.

 These costs break down to about $5 per piece/set

 The manufacture cost of our pjs comes from adding the fabric cost per garment (the fabric yield) to the CMT and the additional costs 

Our Long PJ sets use just over a meter in fabric ($17), our harem Rompers use 0.5m of fabric ($8.50) & our nighties use 0.8m ($13.20) bringing the total cost of these garments to:

- Long Pj's - $12 CMT + $17 fabric + $5 additional costs = $34 per pair.

- Harem Rompers - $16 CMT + $8.50 fabric + $1.50 studs + $5 additional costs  = $31

- Nightie - $10 CMT + $13.20 fabric costs + $5 additional costs = $28.20

Of course there is also my wage, tax and super-annuation to (hopefully)take into account, but these are really dependent on how well a collection is received.

Effectively, what these above figures amount to, is that the cost of making my garments is just over half the retail price. This is in contrast to most conventional business models which take the manufacture price and multiply it by 4 to get a retail price. Obviously we cannot sell a pair of pyjamas for $132, so we are making the choice to make much less money from our pieces in a trade off with choosing a manufacturing model that fits our ethic and our values. What these figures equate to, is that basically, I need to sell just over half of a collection before I have made any money (wage or profit). What my wage looks like for the next 6 months is determined by how much of a collection sells!

Looking at these figures sometimes even makes me wonder why exactly I am doing this. It makes me nervous. Maybe even embarrassed. As though other people will look at my business and think I am hopeless. As you can see by the numbers, there is not a whole lot left over at the end of the day and what is left to pay a wage and to make profit, hinges on a collection selling very very well. If I have a style that is not popular or does not sell well, then those products that remain represent all of my wage and profit sitting in a box in my spare room, rather than in a bank account, paying for our mortgage and groceries.

When faced with figures like these, a lot of people would say "what is the point? Why don't you go offshore and produce in a fair trade factory?" It is of course a very valid question. I am a huge supporter of the fair trade world. I also think that the term fair trade has become over used and does not always mean what it should (this is in no means intended to discredit the many wonderful businesses who do fair trade well)! It is a bit like the terms "eco" and "sustainable". Back when they were first coined they meant certain things, but then slowly as people became aware of the benefits that come from marketing their products as "eco", standards slipped and the terms become often misused. For me, and my personal ethics, going down the path of overseas fair trade production means visiting the places where my garments are produced to know for certain that fair trade is fair. At this time in my family life, this is not an option. 

I also strongly believe that manufacturing locally and ethically in Australia can work.! It is risky, it is never certain and it costs more, but I really believe that it is a long term game.  I think it comes down to working out exactly the right balance of production so that your items are in demand, so that they sell well, and you do not have your wage left sitting in a box in your spare room. Working out that balance however takes time. This is not a game of making fast money or a lot of money. Lucky for me, that was never the point. For me the point is freedom. I can run this business on my own terms. I can drop my youngest son at Kindy and stay and play with him for half an hour instead of rushing off. I can drop in during the middle of the day to be class helper for my oldest son. I can dream of the day that we take our family around the world whilst still running Gather & Moss.

This first year of G & M has been a huge learning curve, of mistakes, of losses and of hard work but also of fun and imagination. I really really believe that with time I can make it work. It will never make me a fortune, but hopefully with hard work, and a sprinkle of luck and magic, it will become an income the equivalent of a job in the “real world”, that I have built myself from a tiny little dream.

Kate xx

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