One thing that bothers me is how much retail stores mark up the prices of items that are made by designers and factory workers. I would like to know if there are some places that eliminate the middle man and where the money goes to the people actually responsible for making the shoe, the pants, the jacket and the dress.

I went into Macy's one day, and I realized I could never afford those prices. Some of their shoes cost over $100

I'm sorry, but the notion of major markups is a bit of a myth.

The reason some stuff is so cheap is because it's rubbish. It's mass produced by machines, and where there is any human involvement, they are on piece work. Hence the reason most of that sort of donkey work is done in Asia.

The best items have to source the best materials. They can't buy in huge quantities so they pay over the odds for raw material.

The best items are made individually, even when they are mass produced. Women's shoes, for example. If too many of the same style are made, then they don't sell. Simply because most women want something different. Men, on the other hand, prefer standard. Standard style, standard colour, standard material. Hence, mass produced so cheap. And rubbish.

I wear only the best quality shoes, simply because my feet are so important. But I do have to pay, £60+ a time. However, even the very best quality men's shoe is a fraction of a high quality women's shoe. Hence an equivalent women's shoe is 4 times as much. My wife wears the same men's shoes as me. No problem. If I walked down the street wearing women's shoes, I'd probably be beaten up.

It's a bit complicated, but there are essentially two factors that make the biggest companies successful. Franchising and outside sourcing.

Franchising is just a scam, where someone makes a name for themselves, forms a company of that name, based in some low tax haven place, such as some offshore island, which copyrights it. Then, the original company or person pays the company which owns the name, an enormous fee to use it. They own the company. They own the name. But fee is tax deductable in most places. All large companys work that way. It's also common for the biggest names in entertainment. Musicians, actors and anyone like that.

Outside sourcing is a bit more complicated. You need leather to make your shoes. You find various places that produce it. You form a company to buy that leather. Your own company sells the leather to you at enormous profit. You claim tax relief. It's complicated because your sourcing company needs to work as an active unit, rather than the more direct scam of franchising. It is subject to fluctuation is supply and for financial reason, the owners can lose control.

Most retail stores, other than multinationals, make very small profits.

well ok so I was at ross a few months ago, I bought a pair of P.W. Red shoes for $9 , when they were normally listed at $39.99 , I love deals like these, so why are they selling it for so low, and is that even lower than wholesale?

I like retail stores because they are convenient, but There is such a wide range of prices, for the same item between stores. But for me personally places like the gap and macy's just seem overpriced.

I don't know. Mainly because I'm not in the US and have never heard of Ross.

But any place saying they are wholesale, massive discounts and so on, is just another retail outlet with a different angle.

Wholesale outlets are not very much cheaper than retail stores. They are useful for the savvy retailer who knows how to manipulate tax and can use these goods as loss leaders.

But any retail outlet  that is planning to survive more than one financial year, needs a supplier. Wholesalers are not the same thing at all. They are just rather exclusive outlets.

Think about it. A store in the high street could cost thousands every month in rents alone. Then they have to spend a fortune on unilities, staff and maintenance is huge. These places won't make a lot of profit from the sort of hikes they have available from a local wholesaler.

But pleased about your shoes. You got a good price.

As an example, a packet of washing powder, costing about £3.00. The contents cost about 10p, if that. The box is probably about the same. Marketing about the same, (unit cost), shipping. That's 40p to a large supplier. Most of that profit will be take up in franchise payments. Hence, very little tax.

That's capitalism. Nice eh?

Sometimes if they are not moving the items they will price them to move them. It costs the stores money when inventory sits for a while. (If they have the shelves tied up with slow moving items and it's often better to take a "loss" on a slow moving item and replace it with some thing that moves faster)

Part it is the cliental they are catering to. Some of the places discount less because of who they are catering to and some of it is attached to the image of the store.

This may help you, (I know it's helped me) Watch when the stores are having their sales. If you like the items the store has and you don't mind rummaging through the clearance racks sometimes you can find some very nice items. One of the places we have around here is Kohl's. That is a place that if you go there,get on there mailing list because they will often send discount coupons up to 30% off. (but you have to be on the mailing list to get some of those discounts.) With them putting it on "sale" and the other discounts,I have gotten items as low as 30% of their retail prices. And when they put the items on the clearance rack along with the discounts I have gotten some items as much as 90% off. Part of it is learning how the stores do it and which can get you the best value for your money.

We have place called Bath and Body here which for me is a good place to get hand lotions,body wash,and I am hoping they have the shampoo this time. Twice a year they have their really big sale. Right after Christmas and in June they reduce a lot of the lotions and body wash as much as 75% off. That's when I will stock up a bit so it can last me till the next sale. (I'm on strict budget so you learn to work around some of the sales a bit) Their prices are higher than what you can get body wash for at Walmart. $11 for a 10 oz bottle. But once you get the discounted price it ends up less than getting something from Walmart and it's a much better product.

Part of it is just learning how the stores run their sales and clearance items.

Let me give you an example.

I worked in building and in the late 90s, because the tax situation was suitable, I tried a bit of self employment. Actually I was always self employed. That's building. But I was hired for a job if you see what I mean. This was me, finding my own jobs, putting in bids and buying my own supplies.

I could never compete with the big boys, because they had international connections and could get their supplies at a fraction of anything I was paying. Building wholesalers are a bit of a joke really, the only trade thing about them is their locations. They serve anyone. My profit margins were tiny.

That's the difference.

Big companies get their supplies at a fraction of the prices small companies pay. They make the profits. Their prices are essentially the same as mine, but I was making almost nothing. Accountants alone were costing me a sizable chunk of my profit, while big companies employed their own!

And if my company had grown over a certain amount I would do well to sell it as soon as I could, because a small lone trader gets hammered on the next job, simply by the big companies holding up payments and banks calling receivers.

Get the idea now? It's a wild jungle out there. The shopper hasn't got a clue.

Quote from: Shawn Sunshine on December 17, 2012, 10:54:00 AM
One thing that bothers me is how much retail stores mark up the prices of items that are made by designers and factory workers. I would like to know if there are some places that eliminate the middle man and where the money goes to the people actually responsible for making the shoe, the pants, the jacket and the dress.

I went into Macy's one day, and I realized I could never afford those prices. Some of their shoes cost over $100

Buy off season. I get GREAT deals buying clothes and shoes near the end of the season and wear them next year. And yes some shoes are just CRAZY expensive.

I mostly shop at belks and at coldwater creek waiting for sales. For example this super nice winter coat originally was $260. I found it on sale for $115 earlier this year as part of some one day storewide sales promotion. Was it ever really worth $260? Not to me but was a nice buy for a bit over $100.

http://www.coldwatercreek.com/product-detail/62619/69333/wonderlands-coat.aspx?colorid=010&refLink=apparel/outerwear.aspx

Apologies if I seemed to dwell on a specific issue here. The reality is, I know nothing about buying stuff in the US.

I buy what is functional and buy special stuff when I see something that takes my fancy.

But that is very rare.

Personally, my greatest source of inspiration is second hand.

Quote from: spacial on December 18, 2012, 07:56:47 AM

Personally, my greatest source of inspiration is second hand.

I will say probably 70% of my clothes come from the thrift store. Especially things like jeans and skirts that IMHO are extremely overpriced at the retail stores.

And I don't believe shopping is that different in the US from other countries. Retail marks things up as much as they think they can and then marks them down when they aren't selling fast enough. At the end of the season, they have a "close out" sale, as storing the stuff till the next season would cost too much and the items also might be "out of style".

Quote from: Stephe on December 18, 2012, 11:13:10 AM
I will say probably 70% of my clothes come from the thrift store. Especially things like jeans and skirts that IMHO are extremely overpriced at the retail stores.

And I don't believe shopping is that different in the US from other countries. Retail marks things up as much as they think they can and then marks them down when they aren't selling fast enough. At the end of the season, they have a "close out" sale, as storing the stuff till the next season would cost too much and the items also might be "out of style".

Yeah, you can get some really good stuff at thrift stores from time to time. Then there are close out/off season/"defective"/overstock/etc stuff ("overstock" is common for department stores and stuff) that may be a lot cheaper. Finally sometimes you can find things that are lot cheaper from overseas like from Asia where people are much poorer and so don't charge as much (or sometimes it's just the exchange rate). This isn't really buying it directly but it does remove the "middle man" that is a multinational corporation in favor of a national business or corporation, but the quality may be suspect. Of course the quality may be suspect if you buy from a local store too.

Quote from: Stephe on December 18, 2012, 11:13:10 AM

And I don't believe shopping is that different in the US from other countries. Retail marks things up as much as they think they can and then marks them down when they aren't selling fast enough. At the end of the season, they have a "close out" sale, as storing the stuff till the next season would cost too much and the items also might be "out of style".

That is so true. We can be pretty sure of that for any society.

The problem is, we like to think cost reflects production, whereas cost reflects the value people are or are expected to place upon it.

Just don't know what Ross, or Macys or any other US store is about. Macys could be a sort of Woolworths for all I know, or a Harrods.

Lets just say Macy's is big enough of a store to host a Thanksgiving Parade in New York City 

Like Woolworths?

I've checked it out and its suppose to be a sort of mid to up scale department store. Not quite Harrods, more Frasers. (For us in the UK).

Shawn, Isn't there H&M or XXI in your area. I'm a big fan. Their clothes are really cool and the sales racks are dirt cheap! Love love love them.

Quote from: spacial on December 18, 2012, 02:02:47 PM

Just don't know what Ross, or Macys or any other US store is about. Macys could be a sort of Woolworths for all I know, or a Harrods.

Macy's is more like Selfridges. Target and Ross is more like a cheap version of Mark & Spencer's. There is nothing like Harrod's. I've been to many places and this store is completely unique and fabulous and way out of my price range!!

ebay

I got 5 really really cute pleated minis (Torrid Brand) for 99 cents. All five new with tags 99 cents total. These skirts go for 39.99 each.

Got a maroon and white plaid skirt for 2.99 New with tags.

I buy tons of things from ebay

Thrift stores. Just saw a very nice Am. Eagle shirt. (Too bad but it didn't fit.)

--Jay

Quote from: Shawn Sunshine on December 17, 2012, 03:24:55 PM
well ok so I was at ross a few months ago, I bought a pair of P.W. Red shoes for $9 , when they were normally listed at $39.99 , I love deals like these, so why are they selling it for so low, and is that even lower than wholesale?

Ross, Marshall's, and TJ Maxx sale everything so cheap because it's irregular items. There is some small flaw in the item where it didn't meet the manufacturer's quality control standards. I shop those outlets as well. I got a pair of Billabong cargo shorts for $7 not too long ago.

My gf got a nice pair of Reebok's for $3 at Ross. Nothing wrong with them that we can tell. There are some steals to be found at outlet stores.