Why is the price of women’s lingerie so high even though only small amounts of cloth are used?

I’d just like to add a couple of processes/ aspects which make a big difference to the cost of women’s lingerie. (From my point of view)

To manufacture any garment, the high-level flow would be -

·         Textile process - which involves the creation of the base fabric for any type of garment.

·         Cutting process - which as the name states implies cutting the fabric according to the marker specification* specified for each garment type.

·         Sewing process - which is the process of sewing the cut parts to create the finished garment.

From the standpoint of a manufacturing unit, the main costs involved are divided into three buckets (in no particular order) -

·         Labor Cost

·         Material Cost

·         Operating Cost

Breaking this down to the manufacturing of women’s lingerie -

·         Labor Costs - As much as the Textile and Cutting processes don’t account for a lot of manpower. It does require a lot of skill which does add to the costs but is not one of the major cost drivers.** However, the sewing process needs a lot more manpower as each manufacturing unit’s profit is based on the turnover (from a financial standpoint of inventory) which in turn aids the company to hit its targets.

o    **Labor is not a major cost driver due to the fact that most of the manufacturing takes place in developing countries, there is more cost saving than expense which is accounted for.

o    On that note, due to the fact that labor is obtained from developing countries - the turnover rate (Absenteeism) is high. This is primarily due to the fact that most developing countries has a major percentage of the population deemed as self sufficient (Activities such as farming, fishing, harvesting and the like). This in turn increases training costs and reduces the turnover (Inventory) of the plant. In turn increasing the overall costs.

·         Material Components - Obtaining the fabric in bulk is simple. The issue arises when we need each of the below components separately. The below image is that of a simple bra.

·         Each of the bra components have to be cut from markers made for each component. As much as most garment manufacturing companies have started to make use of Auto Cutting machines, the issue arises with the marker. While cutting, *the Material Utilization is given a lot of importance and the person who creates the marker (as shown below) has to ensure that the maximum utilization is obtained from the spread fabric.

·         Operating Cost - Other than the major cost components which plays a big role in manufacturing. Below are some of the commonly overseen cost drivers -

• Volume and Mix of the items plays a very important role. There are legacy mixes (Bra’s which have an artistic differential or Bra’s which have a TG of just the elders in society) have low volumes, which in turn increases the cost. It increases cost due to the fact that the manufacturing processes are old and has been replaced by newer and faster methods with less involvement of manpower.
• In most cases, the Textile, Cutting and Sewing process are not in the same location. If fabric doesn’t reach the plant on time - the cutting and sewing processes are affected which in turn leads to unplanned timeouts at the plant. Timeouts could also be due to defective quality of the product at any stage which leads to a line stoppage. Timeouts cost.
• Lead-time - There are times when the bras have accessories like ribbons, lace or some form of hook or wire which are outsourced, have long lead-times and don’t have very high volumes - the manufacturing costs are high for these products. The mode of transport sometimes switches depending on the season to air to reduce the lead-time which adds to the cost.
• *Material Utilization - If material is not utilized efficiently or is defective, they turn into waste. Waste in this process is a cost.
• Other Costs - If proper network/ route optimization is not done or there are no FTA’s between the country where the demand is originated and the country of manufacture. The costs would increase yet again - Import duties and taxes, Logistics are just a few to be named.