• Susan Trott

Why we charge what we charge.



"A product must support the economic ecology that creates it."

This is an axiom that any manufacturer has to live by, or vanish.

What does it mean? It means that any product you create must pay for the technology, personnel, and materials that create it.

Why? Well simply put, if it doesn't the company goes broke.

Every company has it's costs: supplies, materials, overhead such as rent, personnel, etc. These have a real cost, that most people that don't own a business, are not wholly aware of. Small business faces these costs the same way big business does. The risks are higher, because small business doesn't have the same margins that big business has.

There is a lot of truth to the point that banks, governments, and other lending companies don't let big business falter -- they cannot. There is too much on the line. However, this is not true for small business. They fail often, and more quickly because of poor management of resources, too many costs and not enough revenue, and the big one people don't get -- too much work to do with the limited resources they have.

Small business can respond faster, but they have a harder time absorbing large changes in production demands. Huge orders are tempting, but having the resources to create those orders is sometimes a challenge. And then, if the orders fall through, the business is stuck with paying for resources they cannot afford.

When pricing a product, numbers aren't pulled out of the air. All companies base the price on calculations of the cost of materials, labour, and overhead, plus a little profit to make it worth while. There is no point in asking for a lower price because they are already priced at the minimum they can make a living.

You wouldn't go into a bakery and ask them for a loaf of bread for less than the posted price, would you? Why ask your costume maker that question?

"A product must support the economic ecology that creates it."

Recent events have proven this axiom. A well-known suit maker in Montreal has closed because they did not respect this axiom. The desire for acquiring more business out ran the ability to pay for the people to make the product. Why? The products were not being sold at a price that supported the costs incurred to create them. Simply explained, they were not charging enough to pay the bills. If you don't charge enough, you can't pay the bills: can't purchase more supplies, can't pay the staff, can't make more product, and go out of business. That is the cycle.

We've been asked to make suits for $70. That is a wonderful price; but let's break that down by costs:

A swimsuit is fabric, elastic, and thread. If it's a printed swimsuit, it also includes the cost of paper, dye, and tissue. Those are the consumables. As well, power goes into that, to operate the machines.

Labour goes into that -- it requires about 1.5 hours (90 minutes) of labour to make a suit from start to finish. So at a reasonable wage - that cost is $27.90.

The fabric costs $30/m after freight, duties, taxes, and cost. A size 30 swimsuit requires .4/m of two kinds of fabric. So there is another $24.00.

We are up to nearly $60.00 - and we haven't calculated the cost of overhead or design time. Neither has the cost of elastic, thread, labels, machine maintenance, etc been included. So you can see $70 for a suit is not reasonable. It would be like asking you to work for free. Would you?

Even if we got orders for thousands of suits, the cost is more than the price. This will ultimately lead to failure.

So our BREAK-EVEN point is $85.00 per suit. We cannot go lower. If you ask us to, we cannot make your suits, because it will be costing us money.

Designing suits requires skill and time. This costs money, because the person doing that job gets paid for their skill and time. So please don't ask us to create designs for you without expecting that will be charged. Each design we do will cost $50.00. If you purchase that design from us, then the design fee is built into the cost of the suits. There are no free services or products. If you want to hire someone else to make the suits, that's ok, as long as you have paid for the design first.


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TaggerWear Inc.

613-727-9883

Toll Free 888-823-9883

©2017, 2018, 2019, 2020  by TaggerWear Inc.

19 Grenfell Crescent

Suite 101

Nepean, ON

K2G 0G3