[Spareribs]

I've noticed that Coach hand bags which cost around $500 are made in China. Banana Republic clothes which are also made in China are expensive too. I always thought that stuff made in China were cheap but how is that a $500 coach bag made in China so expensive? A lot of these products are massed produced too. Just curious.

And no, I am not interested in buying hand bags for myself.

 

[Zorander]

Mark-up?

 

[gritzcolin]

It's so Mr. CEO of big corporation can afford his 2 summer houses and new bentleys.

 

[lan]

Well they are luxury brands and their retail spaces are high rent.

 

[fordgtlover]

Retail price has very little relationship with the cost of manufacturing.

You can get two (almost) identical products produce by the same factory in China and one has a luxury brand label and will cost many times as much as the budget brand.

It all comes back to marketing and the perception of quality and prestige.

Cashed up middle class folk would not buy a $30 bag when the one next to it with the fancy label is $500. The thinking is simply, it is more expensive so it must be better. The retailers simply give these people what they want - an product that is exclusive by virtue of its price.

 

[smeggy]

They are probably made in the same factory as those cheap Chinese knockoff versions.

... main difference, as mentioned, mark-up for name.

 

[c0mfortably_numb]

Quote:

Originally Posted by Spareribs /img/forum/go_quote.gif I always thought that stuff made in China were cheap but how is that a $500 coach bag made in China so expensive?

Short answer, is because they can get away with it. There are way to many consumers that just buy goods based upon price with out checking labels, not many people seem to be aware that "High End" retail subcontract there work to other manufactures. If it's more expensive it has to be better right? That seems to be the mindset anymore....

Quote:

Originally Posted by Spareribs /img/forum/go_quote.gif Banana Republic clothes which are also made in China are expensive too.

What's even funnier about Banana Republic, there almost the same clothes you find at Gap and Old Navy (since there the same store, just aimed at different types of consumers), with the exception of Banana Republic having a few higher end garments but still carrying jeans and T-shirts and charging three times as much or more then there sister stores. They don't use China exclusively either, last time I was at the Gap Outlet, I noticed at least 6 different countries, and the black T's I bought on clearance where manufactured in Egypt. It was clearly obvious to me that they where going with who ever can manufacture there label the cheapest.

 

[3x331m]

Quote:

Originally Posted by Spareribs /img/forum/go_quote.gif I've noticed that Coach hand bags which cost around $500 are made in China. Banana Republic clothes which are also made in China are expensive too. I always thought that stuff made in China were cheap but how is that a $500 coach bag made in China so expensive?

...Because some of us are willing to pay that price. It's just like some of us paying a few grands for an amp or set of cans.... and most of the parts are also made in China.

 

[tennisplyr3]

right now, the us has much of the world's cheapest luxury designer items. it's been this way for a while. the devaluing of the us dollar isn't exactly changing that either. every day is a sale in the us for canadians because of the exchange rate. ^,^

 

[Uncle Erik]

Quote:

Originally Posted by 3x331m /img/forum/go_quote.gif ...Because some of us are willing to pay that price. It's just like some of us paying a few grands for an amp or set of cans.... and most of the parts are also made in China.

I'm not much up on the cost of manufacturing clothes, but I can do a part count and a rough estimate for an amp. Some of the high end ones really do have pricey parts. I've seen others with four-digit markups.

I don't have a problem paying profit - fair is fair - but some of the margins are unconscionable. A couple manufacturers I can think of absolutely cannot justify their prices.

 

[jsmithepa]

'Cos there are enuff dumb ppl who's willing to pay for brand names.

It comes with exceptional customer service though, very pleasant sales ppl, and return any time u like, yer paying for the prestige and pampering.

Don't try that with eBay!

 

[Cankin]

I don't buy gap anymore, heard that in class they use child labour

 

[john_jcb]

I have friends that travel to China for work and the markup we see on many items not just the designer labels is amazing. Look at your parka or outdoor clothing at any sporting goods store as an example.

 

[chesebert]

marketing 101: your sales price is whatever the market will bear taking into account the elasiticty of the market and pricing structure of your nearest competitor, among many things. The days of cost+profit = sale price are loooooong gone.

 

[chesebert]

Quote:

Originally Posted by john_jcb /img/forum/go_quote.gif I have friends that travel to China for work and the markup we see on many items not just the designer labels is amazing. Look at your parka or outdoor clothing at any sporting goods store as an example.

well..its is also true the otherway around. Many US goods are marked up through the roof in China, resulting many times the cost of their US counterparts.

I see this senario as an average reciprocal advantage of international business.