The Old Master Says: The Cost of Doing Retail & The Price of Small Business

Before we get going, my fellow retailers (and some self proclaimed aficionado's) are probably not going to like this one too much. I'm simply here to educate, nothing more, which I feel, especially in Classic, Traditional Menswear, is very rarely done, if ever. For most of you this won't be anything shocking or new, but I've read a rash of articles lately complaining about the rising cost of retailers, so this my, very small, perspective. If you're coming into this hot already with a negative mindset, let me go ahead and burst that bubble... there's no deeper meaning or ulterior motive here. So, let's all just take a breath before we even get going. That said, there is a cost of doing retail, and there is a price to small business. "Products are Priced Accordingly", and for the most part it's for good reason. The problem is that the majority of consumers don't see the reasoning behind a price tag, and I've learned this time and time again over the last 15 years in retail. I'm sure I could fall down some huge rabbit hole concerning the psychology of it all, but I'm not here for that. I'm going to do what no other retail owner would dare do, and actually explain why our products are priced the way they are. Dun Dun Duuunnn... (it's not that shocking).

Real Quick: If you're here expecting me to hand over the keys to small business, you're again about to be very disappointed. I'm all for transparency, but I've spent years building this brand, countless hours of research, so please forgive me if I don't give you every detail willingly. Now, if there's something you want to know, please feel free to give me a call, 9 times out of 10 I'm happy to share. In fact I had a call last week from someone trying to put together a Patch Madras Jacket who couldn't track down the fabric, and I happily pointed him in the right direction. Another person called just to chat about branding and marketing... Again, I'm more than happy to chat about inner workings, but that's not what this is about. This little essay, whatever you want to call it, specifically stems from the articles I've been sent, and read recently regarding retail pricing. Normally I chalk these up, because I can't relate to them. They reference enormous brands, huge retail chains, so I figured why not give you the little guy's perspective...

This will probably come as no shock to the majority of you, but I fear through some of the comments, direct messages, phone calls, and emails that I've received regarding price I'm constantly explaining the reasoning behind each product's price. This is something that's become more common through the power of the internet. It mainly has to do with the lack of "face to face" interaction when shopping online, but we aren't just picking prices out of thin air here. The cost of doing retail, any retail, is that in order to grow, innovate, and just plain stay in business a percentage has to be added onto our cost of goods. This is a no brainer, and we all know it. That percentage can be used for all sorts of things. Shops can pay their rent, their employees, purchase more product, develop a new product, cover the cost of advertising, the list goes on and on. Now, depending on the brand and the product that can percentage can vary drastically. 

Let's start with the basics. A good friend of ours is an interior designer, and he gave me this great analogy a few weeks ago when explaining a decision he'd made to a client: A new car will cost you $30,000. It has four wheels, a roof, and it will get you from one destination to another. You'll feel great in it! A Rolls Royce will cost you $350,000. It has four wheels, a roof, will get you from one destination to another, but you'll feel unbelievable in it. Why do these two things give you such a different feeling if they do the same thing? (If you already know the answer here, which hopefully you do, please feel free to skip ahead.) You know what you spent on the Rolls Royce, there's one obvious reason, but for those that don't know a Rolls Royce is handmade. It's made with incredible craftsmanship using the highest quality materials available, some sourced specifically for specific models. They're also made in limited production numbers, and the brand itself exudes luxury and sophistication throughout it's marketing and ownership (the branding bit the two cars may even have in common, but you don't get as excited to see most cars as you do a Rolls Royce in person, let's be honest.). To bring this into a more realistic perspective for all of us that can't afford a Rolls Royce: You feel good in the $50 pair of pants. It's got two pant holes, some belt loops, and they do the job fine. The $200 pair of pants feel good too. It has the same pant holes and belt loops, but they were made to order specifically for you, cut and sewn by hand using fabric that was milled in Italy specifically for those pants in limited numbers. They're going to last you a lifetime (if you take care of them). Just like the Rolls Royce. The $50 pair was mass produced using machines in a country you've never heard of, and at the end of the season, threads begin to loosen, and eventually you end up donating them. Fast Fashion at its finest.

I'll give you another one. We're all familiar with Old Navy. They produce large quantities of clothing using inexpensive material and labor. Just like many other brands in the Fast Fashion industry they're focused on selling volume. Huge quantities over quality is where they see their profit. Old Navy's Polo goes for $23. It has a collar, a front placket with buttons, and it fits great! It's 60% Cotton and 40% Polyester (adding in that polyester is a huge production cost saver because it's cheaper to produce, and now we can say it's lightweight, bonus). It's Made in Vietnam (by the same factory that makes Gap, Banana Republic, American Eagle, etc) in huge quantities where labor and materials don't cost as much. A small business owner like myself (and many others), have our polos at $89. It has a collar, a front placket with buttons, and it fits the same as the $23 one! Why would we ask you to pay so much more? Higher Quality, Smaller Numbers, Attention To Detail. Those three always play a role in small business pricing. Our Polos are made from 100% pima cotton in Peru (we do them there because Peru has the ability to grow incredibly soft cotton due to their specific climate), they're made in incredibly small numbers which allows for more attention to detail during the cut and sew process. This same methodology continues throughout our selection. Essentially if I wanted to sell you a cheap polo, at a cheap price point, I could, but you wouldn't be happy with it and neither would I.

My focus has and always will be quality over quantity. I have no interest in running a business that's primary focus is selling inexpensive goods at a lower quality for volume profit. Sure, I would love to sell a 100,000,000 Scottish Shetland Wool Sweaters at $265, but that's never going to happen. The loom used to create our sweaters is 200 years old, and the sweaters themselves are seamless which requires incredible craftsmanship (most sweaters are cut into two pieces and sewn together as one). Essentially, it's impossible to push those numbers in a year without taking a drastic sacrifice in quality. Furthermore, as a small business I can only afford to purchase so many at a time, and if your business gets to a point where you can sell that many sweaters at that price point, chances are you're going to find someone else who can make them cheaper. In return, your quality goes down, and now you've entered the world of Fast Fashion (or at least border lining it). Ralph Lauren (specifically Polo) is a perfect example here. It's not Fast Fashion by any means, but in my opinion, it's border lining it. Granted, RL Polo is incredibly unique. It's a luxury brand that primarily produces overseas in order to keep up with the demand. They have complete control over their production process, which means quality remains high. You're still going to pay for it of course, but what you're really paying for is marketing ($467,000 worth in 2024 in fact) and the higher cost of attention to detail over mass production (they can afford it). Now, the same Ralph Lauren garment produced under their Purple label will be drastically different in price and in production. Higher Quality, Smaller Numbers, Attention To Detail.

There are plenty of menswear brands out there that are incredibly niche that charge an absolute fortune for their products, but with good reason. Drake's for example. $2000 for a Suede Chore Jacket. Suede is incredibly expensive in its own right (if you're buying Grade A, which Drake's is), to the tune of $200 a yard wholesale. Jackets are typically 4 to 5 yards, so there's half your cost right there in fabric alone. Made in Italy, with Horn Buttons, in low quantities, I'd say $2000 for a Suede Jacket is pretty on point if you can swing it. Sure, that's not something everyone can afford, but that's also what makes Drake's special. You're purchasing an heirloom piece (and you can knock that thought process all you want, but I've got jackets that were my Grandfathers from the 60s and they hold up beautifully if they're made right). They're producing beautiful garments and accessories, and if you take care of that Suede Jacket, chances are your children (even grandchildren) will be fighting over it when you're long gone (unless you're buried in it, which I would also highly recommend, take that thing with you!). Also, their branding and marketing is just aces all around. It seems so effortless, which is probably done on purpose (I have to tip my hat here, well done), but just like any form of marketing, it costs.

Marketing and branding plays a huge role in pricing, and I'm not here to name name's on who I think is ripping you off as a consumer (though there are some). Being in this business does tend to give you a better understanding of what it is you're really paying for (I'm sure there's plenty of aficionado's out there who obsess over this kind of thing as much as I do). Take our Button Down Shirts for example. We charge $165. They're made outside the US (and if anyone would like to find us a manufacturer in the U.S. that would be willing to cut and sew our fabric in our oversized classic fit style, with reasonable production numbers I can actually meet, by all means) using high quality fabric, and done in incredibly small numbers. (Those curious, there are other brands that do make Made in the USA shirting at a similar price point, but I don't order as much as they do by a long shot, and our shirt is also cut fuller, meaning more fabric, which results in more cost... Anyway...) That same factory produces a shirt (in a different fit and style of course) for another brand here in the South who charges $195. If you've already factored in your profit to make more to cover costs, what's with the additional $30? It all has to do with branding and marketing. The amount of online and print advertising this particular brand does gives their brand more visibility, and in return the opportunity to tack on the extra $30 to cover the bill. This is one tactic I can't 100% get on board with. Maybe that makes me a bad business owner, maybe I'm just old school, but I'm not big on being as small as I am and having the customer pay for huge amounts of advertising with that much of a price increase. I do of course work in a percentage for advertising costs, I have to, but it's so small and across so many products that it barely scratches at anything. If I did want to really grow this business however, I can almost guarantee this would be the first move. Now, there's something no other brand owner would be willing to share.

I'm an extremely transparent business owner (probably to a fault at times). I spend an enormous part of my day obsessing researching, and going over quality and branding when it comes to Morris & King. Figuring out how I can not only offer a high quality product to a customer looking for it, but continue to run my business and feed my kids at the same time (now there's some real transparency for you). It's not an easy game to play, there's plenty of hurdles, and I know I won't be able to please everyone (just look at Reddit). However, it's something I truly love to do, and am somehow lucky enough to do it for a living. After all, one of the reasons I built Morris & King was not only to honor my old man (which you can read all about in my other posts), but to make things that last (and hopefully make you feel like you just bought a Rolls Royce).