Ruminations on Pricing, Sales and Other Randomness

I've seen some discussions around the webiverse recently about pricing differences for fabrics that look the same, and speculation on how different vendors work their business models. Well, I can't tell you how anyone else works, but I do know a bit about my business 😊. Let me see if I can give you some insights.

Let's say Fabric Vendor 1 (FV1) puts up a lovely fabric on their site, and they charge $20 per yard. Fabric Vendor 2 (FV2) posts a fabric that looks the same, and charges $12 per yard for it. Pearls are clutched, pile-ons happen, and Fabric Vendor 1 is accused of unreasonable markup, or worse. But there are a few questions one needs to ask before one starts shouting on the internet.

Same Fabric?

Here's the first question: is it really the same fabric? It may look alike, but perhaps FV1 got their fabric in Italy, from a mill that is the supplier to top designers, right after the season's orders closed. Maybe FV2 got a knockoff from a mill elsewhere in the world, or maybe they bought the same fabric from a cut/sew factory 2-3 years after the production run had finished, and they paid half or less per yard than FV1.

Are Economies of Scale at Play?

Another possibility is that FV1 is a small vendor who buys in lot sizes of less than 50 yards (hello!). FV2 might be able to purchase hundreds of yards at a time, and thereby push the price per yard way down compared to FV1.

Rent and Other Expenses?

Perhaps FV1 has a brick and mortar fabric store. In that case, they have rent to pay, and even in a pandemic, retail rent ain't cheap. Add to that utilities, insurance, employees and all they entail. That tacks some serious overhead that can't be as readily absorbed as, say, a company that has warehouses across the country and a plethora of high-margin products that can mitigate other costs.

Taxes?

Ima just put it out here. Many big corporations don't pay taxes in this country. Little guys like FV1 aren't so lucky.

"55% Off All The Time!"

I find this insulting to my customers' intelligence. Do you REALLY buy into that? If a store is claiming 50/60/70% discounts on everything, all the time, then they are blowing smoke about the value of their products. Better to price the fabrics fairly and give the customer good service. Plus, it trains customers to not bother to shop because the fabrics will be half-off if they wait a while. It doesn't fool anyone, and in the case of small businesses, it's an unsustainable model.

Shipping, Ugh

This could be included in the Economies of Scale section, but I think it's worth discussing separately. Shipping is one of the biggest expenses any online vendor will have to deal with. Case in point: on April 15th, UPS raised their rates an average of 5%. In January, the USPS raised their rates 5%. Delivery companies raise rates every year, and they tack on fuel surcharges and other add-ons, often after the fact. It's part of the reason Amazon decided to invest in their own delivery capabilities. Small businesses have to suck it up and either pass the shipping increases on to the customers, or absorb them.

Whom are you Buying From?

This is worth thinking about. Do you want to support small businesses, or are you more interested in single-click-Prime-shipping? I'm not disparaging the latter; heck, I do it. But I can tell you from personal experience that your purchase from a vendor like FV1 makes a huge impact to them. We aren't billionaires, and our business is very personal. We put our own blood, sweat, and tears into each package that goes to our customers, and we get to know many of you as friends.

I hope that sheds a little light on the psyche of a small business. I deeply appreciate your support, as I'm sure do all my confreres, and I wish you all happy sewing!