Gucci Bag Costing $39 to Manufacture in China Sold for $1350

[Cerebral]

U can always skip all those steps and sell ur goods online.selling online cuts all ur overheads by 90%. There are some brands and fashion names that sell so well online they have no reason to go brick and mortar.

You are being ignorant. Without Marketing, there is no way you can sell at the price you want. You will price it cost plus, which then leads you to price wars and no buyers. This is the effect of negative brand equity

 

[JohnTan]

But honestly do you think the the thousand dollar tag justify a 39 dollar bag even accounting for marketing.

Are u saying ur product is 97% hype and 3% substance.

That's the value of marketing. To inflate the selling price way way above its true cost and workmanship quality.

 

[Cerebral]

Idiots who buy Gucci and other branded good deserve to be cheated.

Brands are an extension of self. We are buying into the personification of the brand and not just the product. We are all brand conscious, just different items. It can be the bicycle, glasses, computers or even sliced bread

 

[Cerebral]

But honestly do you think the the thousand dollar tag justify a 39 dollar bag even accounting for marketing.

Are u saying ur product is 97% hype and 3% substance.

The price tag is in conjuntion with the brand equity. E.g. Coke vs. RC cola (dunno still around); Heinekken Beer vs. Tsingtao

 

[JohorRookie]

But honestly do you think the the thousand dollar tag justify a 39 dollar bag even accounting for marketing.

Are u saying ur product is 97% hype and 3% substance.

Cerebral took the words right out of my mouth. I couldn't have said it better.

Whether it justifies the price tag is for the person who is footing the bill to decide. The buyer is buying a reputation and paying a premium to be associated with that reputation.

 

[frenchbriefs]

You are being ignorant. Without Marketing, there is no way you can sell at the price you want. You will price it cost plus, which then leads you to price wars and no buyers. This is the effect of negative brand equity

from what iv seen on shark tank,good products sell themselves,that includes clothing.some can design a whole new line of baby clothes no one heard of(brand) and sell millions.new start ups simply do not have the capital to blow on marketing and if u need to spend hundreds of thousands on marketing to sell,then ur product simply sucks.

 

[singveld]

i thought only the low priced and low end stuff are made in China.
Since when the expensive designer stuff made there?
also where is the outrage about apple forcing PRC to work OT for iphone,

 

[Cerebral]

from what iv seen on shark tank,good products sell themselves,that includes clothing.some can design a whole new line of baby clothes no one heard of(brand) and sell millions.new start ups simply do not have the capital to blow on marketing and if u need to spend hundreds of thousands on marketing to sell,then ur product simply sucks.

What you watch on Shark Tank is just part of the story. There is a lot behind the scene you are not exposed to. The millions could be due to just a distribution exercise. However, the distribution could be riding on the Shark's current network and hence the success. USA has 700+m people. Selling a few tens of million there is easy, provided you have the right distribution partner and the correct person to lead you in. Fyi - in US, SME is classified as companies with turnover below USD250M. That was what government was referring to when they said we do not have a hinterland (i am not a pap supporter, but some things they say are correct).

Back to your point about the millions, the cost of sales for you unbranded few million could be non sustainable and non viable. For example, to sustain distribution across multiple states requires a lot of money. Retailers will ask for high margins. Your product being an unknown and unbranded will be selling at low gross margins. Not even enough to cover overheads and rental. Have a think through

 

[Cerebral]

i thought only the low priced and low end stuff are made in China.
Since when the expensive designer stuff made there?
also where is the outrage about apple forcing PRC to work OT for iphone,

iPhone is made there

 

[sochi2014]

Bag is a bag dun care what brand it is carrying they are all made in China!

Now I wonder how much it cost to make a BMW or a Merc?

 

[singveld]

Bag is a bag dun care what brand it is carrying they are all made in China!

Now I wonder how much it cost to make a BMW or a Merc?

car industries are different, they have very small profit margin.
Singapore cars however are pricely due to different reason. PAP taxes.

 

[nusajaya2020]

Most Ah Tiong won't know about Grand Seiko.

Rolex is overrated, I only like Daytona and the vintage Rolex watches.

even LV, rolex, cartier all over rated. paying for the name to impress stupid people who does not know what real quality means. I once wore a grand seiko costing $20K and some stupid idiot ah tiong thinks my watch was only a few hundreds and started to show off his rolex. I told him my seiko definitely costs more than his cheapo rolex.

 

[extramarital]

i thought only the low priced and low end stuff are made in China.
Since when the expensive designer stuff made there?

From what I read, they have been making expensive designer stuff in China and other emerging countries for decades when those independently owned luxury designer houses in Europe were taken over by publicly listed luxury conglomerates; e.g., LVMH, Kering, etc. These conglomerates face constant pressure from their shareholders to increase their profits every year. One way they have increased their profitability/bottom line was to open new stores which started around the late 80's and early 90's in major cities around the world increasing their global footprint and customer base who are mostly aspirational middle class and upper-middle class buyers. These aspirational buyers can buy their expensive designer stuff without having to fly to Paris and Milan. One major problem the luxury conglomerates faced before the new stores expansion program can be implemented was the projected global demand for authentic luxury goods will exceed the supply because there were only a limited number of craftsmen/artisans in Europe who can only make a limited amount of authentic luxury goods each year. The solution to that problem was to have their products mass produced cheaply by contract manufacturers in China and other emerging countries which not only increased their supply to meet the projected increased demand, but also increased their profit margin per item sold.

The luxury conglomerates literally changed their business model of the global luxury goods industry from selling to the elites, who would fly to Paris and Milan to acquire authentic luxury goods, to selling to the peasants by focusing on design, distribution, and marketing hype as the mass production of their branded goods are actually done in emerging countries by slave labors in appalling condition.

An idiot and her money are soon parted!

 

[looneytan]

We are all brand conscious, just different items. It can be the bicycle, glasses, computers or even sliced bread

Too true ...

I always buy Axe brand oilment

 

[frenchbriefs]

What you watch on Shark Tank is just part of the story. There is a lot behind the scene you are not exposed to. The millions could be due to just a distribution exercise. However, the distribution could be riding on the Shark's current network and hence the success. USA has 700+m people. Selling a few tens of million there is easy, provided you have the right distribution partner and the correct person to lead you in. Fyi - in US, SME is classified as companies with turnover below USD250M. That was what government was referring to when they said we do not have a hinterland (i am not a pap supporter, but some things they say are correct).

Back to your point about the millions, the cost of sales for you unbranded few million could be non sustainable and non viable. For example, to sustain distribution across multiple states requires a lot of money. Retailers will ask for high margins. Your product being an unknown and unbranded will be selling at low gross margins. Not even enough to cover overheads and rental. Have a think through

Nah man those products were already a huge success before they got on the show,its in their pitch.although the show is a catalyst for more success because of its wide audience of 10 million.

Are u a businessman? A venture capitalist?

 

[extramarital]

Idiots who buy Gucci and other branded good deserve to be cheated.

40% of luxury brands to shift manufacturing away from China

Staff Reporter 2012-10-11 15:16 (GMT+8)

Around 40% of foreign companies in China are considering moving their manufacturing bases to other countries, according to the US-based consultancy firm Capital Business Credit.

These companies plan to move their production bases to countries such as Vietnam and the Philippines, or transfer orders to some developed countries, reports the Chinese-language Beijing Business Today.

Emerging countries, particularly in Southeast Asia, are gradually replacing China's manufacturing position due to the latter's increasing labor and raw material costs, analysts said. Labor-intensive industries such as clothing are set to fade rapidly, analysts added.

The US-based World Luxury Association says that 86% of Chinese consumers refuse to buy products labeled "Made in China" due to the country's reputation for cheap goods. Many global brands do not want to lose their customer base because of the label and the ability of Chinese customers to purchase international brand luxury goods has been increasing, said the association.

Some global luxury brands hide the "Made in China" label out of sight, or print the words so small that they can only be seen by a magnifying glass, according to the Financial Times.

Another industry trick is to manufacture the products in China before applying some finishing touches in a European nation, so buyers may receive the impression that the goods were made in France or Italy.

US luxury brand Coach has been the first brand to say proudly that its goods are made in China, though the company announced last year that half of its production lines will be relocated to other Asian countries.

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20121011000085&cid=1202

 

[eatshitndie]

USA has 700+m people.

as of today, u.s. have 320m people.

http://www.census.gov/popclock/

 

[JohorRookie]

Another cheapo looking shoes selling for more than $100. How much does the Vietnamese OEM charge per pair ? $10 ?

 

[extramarital]

Another cheapo looking shoes selling for more than $100. How much does the Vietnamese OEM charge per pair ? $10 ?

$3 at the most. The remaining $97 are for branding and marketing hype, retail space rental and staffing costs, transport and logistics, bank Letter of Credit fee, credit/debit card processing fees, gov't taxes, and profit margin.

 

[tanwahtiu]

The Chinese went and failed. The Viet are breeded with French-cap mentality, lazy and demanding like the French dick workers in France.

china is getting expensive, very soon, vietnam will take over the world's factory.