How much are those jeans in the window? Um…what? I’m sorry, I must have misheard you (gulp), $275?
We all know denim sticker shock, we have all coveted the pair of way-too-expensive jeans, and we’ve all spent more than we’ve wanted to on our own dream pair. But, what gives? What actually drives denim to range from under twenty to over two-hundred?
How Much Does it Cost to Make a Pair of Jeans?
$20 vs. $200? What’s the difference?
The biggest difference between a pair of twenty-dollar jeans and a pair of two hundred dollar jeans come in two pieces: where the jeans are produced and the marketing campaign behind the jeans. According to the Wall Street Journal, the cost to produce a pair of True Religion Super T Jeans is around $50, from there the jeans are marked up around 260%.
These jeans are created in the United States which means dealing with a minimum wage of $9.00 (current rate in California) and often times up to $12.00/hour for a labor versus a labor cost of around just $1.67 in places like China or Haiti. It can mean hand stitching and higher quality riveting. It means humane working conditions and a liveable wage. It also means the jeans are more in-fashion. How so? Because the turn around time for jeans produced in the United States is so much quicker. Production time for jeans made in the U.S. falls at just over a month whereas to have the same design produced in China will take nearly half a year. A lot can change in the fashion world in half a year so premium denim designers wanting to offer the “it” pair of the season produce more locally.
Jeans for Under a Buck?
When all is said and done, jeans abroad can be created under so-called humane conditions for as little as $0.90 in Bangladesh according to Here & Now. Jeans likes these are often retailed for $20 and up and behind the scenes, it isn’t pretty. Corporations push for higher profit margins and try to bring the cost of the jeans down to $0.75 and even less which, would result in inhumane working conditions. For a great visual on the costs that go into this pair of under-a-buck jeans, check out Bloomberg’s infograph.
Why the Insane Mark-up?
Okay so we’ve learned that designer jeans using higher quality materials, stitching and riveting can create a pair of quality jeans for $50.00 while abroad a pair can be created for less than a buck. Why the mark-up? The under a dollar pair will hit retail stores for $20.00 and up and will be sold en masse meaning high profits. The designer pair however, well they’ve got to be sold to us in a different way before they’re actually “sold’ to us. In order to convince us, the public, to purchase a pair of $200+ jeans, they’ve got to market to us and make us believe in their brand. They’ve got to schmooze celebrities, plaster their jeans on billboards in Times Square and in Vogue magazine, and ultimately create a name for themselves for us to find them worthy of their hefty price tag. This is not a cheap venture. The amount of marketing that goes into the pair of designer jeans eats up a major portion between that $50 production cost and $200+ retail cost (wholesale alone being around $120+).
The Choice Is Ours
Ultimately we have access to very cheap jeans and very expensive jeans and the choice is ours. Do we look that much better in the expensive pair? Do we want to support jeans produced in the U.S. only? These are the questions we have to ask before we whip out our credit cards and cash. Turns out, there’s a lot more behind jeans than just making our behinds look good.
Thanks for stopping by! I'm Catherine, your Budget Fashionista style editor. I'm a bargain shopper at heart, as I love nice things but hate paying for them! I'm also a personal finance writer who's been featured on USA Today and MSN Money.