What kind of future market are we creating

[DougCooper]

Re: What kind of future market are we creating

Sean Daley is always underfoot in Chris' shop - the future looks bright.

[Tim Prince]

Re: What kind of future market are we creating

I think one of the greatest changes in pricing for high end, well reproduced items is the fact that many of these vendors have decided to run their ventures as a BUSINESS instead of a hobby. This subject has been visited before, but you have to look at the reality of the time and effort that goes into making these garments.
If you simply use the example of a guy sewing a Federal sack at home in his spare time, he might have $30-$40 worth of fabric/buttons/thread in the coat. If the guy has 8 hours worth of time in the coat and sells the coat for $100.00, then his profit of $60-$70 pays for his time and he makes between $7.50 and $8.75 an hour for his effort. Not bad for a hobby with no overhead.
Now fast forward to the same guy deciding to do this for a living. Now he is in business. He has a small shop (even if it’s at home) and has to pay for electricity, rent, insurance and all of the other nagging little things that make business so much fun. Since he is now doing this for a living he is not only sewing, but also dealing & communicating with customers full time, maintaining a web site, and spending half of his time just running the business. This means he can't spend that time sewing. So he either has to hire someone to run the business part or hire people to sew under his watchful eye. If business picks up enough, he may have to do both. Now look at the costs that go into that same coat:
$25.00 worth of materials (we're buying at wholesale and in bulk now), the same 8 hours of labor, but we've got to pay $12.00 an hour to get someone to sew, so we've got $96.00 in raw labor cost. Then there are the unseen labor costs: State and Federal Taxes, Workers Comp, etc. In my business for every $12.00 I pay someone, I've got to add $1.64 just to break even on those "hidden" costs of labor. So we've got to add $13.12 to that $96.00 to cover production costs. So now the coat cost us $134.12 just to make it. Now we have to cover all of those costs of doing business (rent/insurance/electricity/etc) AND make a profit so the family can eat. Standard retail usually works on margins well in excess of 100%, and my understanding is that the garment industry works on much larger margins than that. If our guy just works on the 100% margin your coat will retail for $268.24. So if you can buy one for $225.00 that seems like a bargain to me. How many of us would sew all day for $12.00 an hour. The chances are that most would not. So production costs could well be higher. These guys are doing this because they love it, not because they are making a killing. If they wanted to make better money, they could likely work in the high-end custom clothing industry and make twice what they make now. When was the last time you bought a mid-range custom suit? $500.00 to $1,000.00 is the norm and that's not an Armani. Maybe it's just me, but these guys are just forcing the prices to where they ought to be, instead of the artificially low place they were for so many years. Just my 2 cents and your mileage may vary.
Next time we'll look at this same maker retailing through a distributor/retailer who also has to make a profit....Can I hear $300.00 for a sack coat? And still no one involved is getting rich.

[Matt Caldwell]

Re: What kind of future market are we creating

[QUOTE=Tim Prince]
If the guy has 8 hours worth of time in the coat and sells the coat

Going from experience here, but you can cut that time in half for a sack coat, and that is with hand sewn button holes...

[1stMaine]

Re: What kind of future market are we creating

Comrade Prince,
I ran a retail business for 8 years, and the standard inductry markup for retailers is 40%, NOT 100%. You may be referring to the markup from manufacturer to retailer, but it has to go through distributors as well.
I know that, for example, for a $200 item, my cost was $120., from my distributer, and I could then set my price as I wished. I could sell it at full-retail (ideally) or could knock off a small percentage to enhance cash flow if the item sat around for a while.
Overall though, I had to figure out my costs just to keep the store open, salaries, taxes, utilities, etc, and then that would tell me, based upon the markup how many items I had to sell each month just to break even.
The value of an item, though, is actually set by the customer. He is the one who will ultimately decide whether or not an item is worth the price you ask. I am perfectly willing to pay a little more to get just what I want in certain areas, whereas in others I am content to shop around and let the lowest price item be my choice.
Also coming into play is the reputation of the seller. If I know that the seller is likely to be in business for a long time, then I am more likely to patronize him than a newer mom-and-pop operation. An example here would be buying a rifle from, say, Jarnagin. I know that is there is a problem, he'll be tere and work with me to resolve it. If i get a good deal on one from some fellow at an event, and it turns out to be faulty, then I may end up spending a bunch more money to make it right.
So many different variables are in play in a market that it most often boils down to whether or not some item is a good value for YOU, based upon your needs, than the actual cost/maker/etc.
Ed Neimann, of the Neimann-Marcus store had an excellent comment about business that survive. he stated that any business that went in with the idea of making a profit was doomed to failure in the long run. The business that would survive and prosper was the one that went in with the idea of producing a product or service for which customers are willing to pay a profit. It sounds like semantics, but it's not.
respects,

[DougCooper]

Re: What kind of future market are we creating

Very well said Tim Prince.

I am reminded of the old saying:

The only thing more overrated than "natural" childbirth is owning your own business.

The failure rate for small businesses in this country is north of 70%, maybe worse. In my opinion the vendor end of this hobby (makers) has never been healthier - healthy competition, vision, product improvement and a general increase in the knowledge level of we the consumers.

In most markets the price of new products declines based on an economy of scale and increased competition. In our market, like much of the apparell industry, that does not take place. Well made garments have upward price pressure based on several factors;

1. Demand - we are smarter and want better, more accurate garments
2. Supply - better usually does not mean more
3. Increased authenticity, which normally includes R & D, better materials and longer time/higher labor costs
4. Inflation - materials, labor, etc

The 200 year avg for inflation in this country is around 3.2% - an economic miracle. I do not know what the "authentic garment inflation index" is but it is certainly higher. The real rate of inflation is only a tiny part of that so the comparison is moot.

If I go to a Men's clothing store to find a decent blue blazer, I can expect to spend at least $250 for a wearble garment that will last a few years and won't get me laughed out of the office. Machine sewn with the latest techniques and with minimal development costs - these things are pretty standard. Millions have been made and the quality varies wildly, but high quality normally means higher price.

Now compare that with an authentic copy of a Tait jacket at say $230-250. Imported linen lining, US labor and expertise (does not exist anywhere else), R & D costs, exclusive fabric, handsewn details...yada, yada, yada.

It's a wonder the price is that low - and the thing that keeps it there is our relative lack of affluence as a market - most of us are not rich and we cannot afford to pay for what the garment is really worth. Market's determine price, and I dare say if someone decided to test the market by charging $400 for a Tait jacket or $700 for a well made CS or US frock, the demand at that price point would be quite small...even though a comparable civilian garment of the 21st century would be hundreds of dollars more.

Vendors who have figured a way to keep costs low by concentrating on mostly machine made garments are making an excellent business decision - remain authentic yet limit their offerings of entirely handsewn garments. One of the most difficult aspects of a vendor's marketing is figuring out a way to concentrate on those details most vital to authenticity and saving where it matters less. That is how the whole "visible handsewn, invisible machine sewn" garment thing got started, a good idea.

Few markets have such visibility and such choice - we are lucky as a consumer group. I salute the vendors who have placed the hobby and it's nobler goals of education, authenticity and preservation up there with making a profit. Takes guts when your wife and kids are dependent on all of us making the uniform upgrade decision...but it is the right thing to do in the long run for the business and the hobby.

Eventually even the most naive of us will have so much information to base our decisions on that the market for the low end, in-authentic skinner's row stuff will dry up. Hurry that day. We will have more demand for the good stuff but I think instead of a huge price rise, most of the vendor's will remain content to cover a modest rate of inflation in their products while enjoying the increased revenue from more orders per item.

In the long run, we the consumer dictate the market.

[hireddutchcutthroat]

Re: What kind of future market are we creating

I few of my pards have sold items from vendors such as Paul Smith and Don Radamaker for way more than they have originaly payed for them. I feel we are getting off pretty good on the prices of CW uniforms when you compare it to the costs of WW1 and WW2 uniforms. The 20th century reenactors have to put up with highway robbery.

[Radical Unionist]

Re: What kind of future market are we creating

I have been thinking on making my own fed. frock, so I looked into the material costs I would be looking at, and I figure about 300 to 350 dollars. Thats the best availible of everything. Now take into account labor. I wouldn't make one for a stranger for less than 600. And I worked professionally for 8 years. so I'm not talking out my ass. Tailors and seamsters don't get the respect due.

Jeff Boorom
Wide Awake

[DougCooper]

Re: What kind of future market are we creating

One of the reasons my better half did not balk when I got back in the hobby in 2002 after a 2 year haitus was because she saw that the best stuff does hold it's value - my sell off landscaped the back yard. I did not actually make money but I did not lose much at all. Factoring in the depreciation for wear, it was phenomenal. Add that to all the other reasons to buy the best stuff first - resale.

[JerseySkilletLicker]

Why?...

..isent this thread linked to the $1500 Federal Soldier?

The guy over on the Buy/Sell forum who is hawking his $40 authentic kepis is one of the glaring problems with doing business in this hobby. Regardless of how poor his caps are, and I have no doubt they are, the $40 price tag sticks in folks minds and undermines the hard work that many of the credible vendors have strived to do these past 3 plus years.

Im my March newsletter I have a small piece dedicated to many of the things that your money goes to besides my bank account, that is, re investing in historically accurate products.

Joe

[Company Tailor]

Re: What kind of future market are we creating

Gents,
I've been just about to post on this thread for a while now but have held back as I didn't want to stick my finger in this whirling fan.

However...

I realize there's a lot of emotion ivolved. Some great points have been made and it's extremely gratifying to me to see how so many individuals actually seem to understand where we makers are coming from. It get's frustrating to go over and over the hard numbers and production details with consumers only to have them shoot back, "But I can get it so much cheaper over there!" or, "I paid half that two years ago!" or, "You just think you're making designer gear!" or my favorite, "You're just getting rich off the hobby!" [NOTE: I have had all of the above thrown at me, word for word.] No matter how cold and logical the arguments are, some are always going to put their brains in idle mode and think with the most sensitive part of their anatomy (their wallet), and ignore simple facts.

Tim Prince hit the nail squarely on the head when he compared the "hobby" maker to the deidcated business maker. You may disagree with his numbers but those are really just minor details. The cold hard facts are that the hobby maker pays for no overhead and cares little for the profit margin because he doesn't have to. He aritfically drives down prices, confuses consumers ("Why is he so much cheaper?") and is usually out of business in a year or so being either burned out or swamped by demand. The dedicated business maker has to watch his profit margins zealously as his solvency depends on it. He invests a great amount of blood, sweat and tears in research and all the other stuff that goes along with running a business which adds greatly to his overhead. Then, he gets accused of profiteering, all while often just scraping by.

Just my thoughts. Thanks for all the support in this thread!

Best,