Cost to Make One Carly

I recently read a fascinating book on this topic called Deluxe: How Luxury Lost Its Luster by Dana Thomas that I highly recommend. It was a little analytical, but very interesting to hear about how luxury companies cut costs. LMVH was particularly highlighted, but Coach was mentioned, too.
 
It likely does factor in the labor and transportation and everything else. No, there is no possible way anyone could make ONE Carly for $8, but when you take the amount they spend on the materials, overhead, labor, transportation, advertising and everything else and split it up over the millions of bags produced, the per unit costs equal out to incredibly small numbers.

And it isn't as though the OP has posted her full name, address and working location! Perhaps she is disseminating classified information, but it only makes us, as consumers, stronger to be better informed. We like to think that the items we pay hundreds for are worth more than the average bag, but we pay more for the name than we think. Nothing wrong with that, as long as we are aware of what we are doing and why.


Agree with some of this, but just because we know insider information about a company does not mean we always need to go spreading it around on the internet. I think sometimes people assume (much like my naive kids) that just because they don't say you can't repeat this....they can. :tdown:
 
:goodpost: Great discussion here. I hope the SA doesn't get into trouble, but I am grateful to learn more about Coach including insider information. Makes me a much more informed consumer. Now I feel much less guiltier on trying to get sales and outlet deals.

Take care,
 
I just don't understand why anyone except Coach as a company would be upset about this information being better known. There are tell-all books from countless employees of countless different industries who have exposed everything from unsafe food handling to the conditions in minimum wage jobs to child labor. Upton Sinclair exposed food packagers for what they were, which led to reform.

Not that posting a snippet of information on the internet is as lofty as writing an expose of an industry, but still, this is valuable information to a consumer and is only potentially damaging to the industry or business itself. Unless a person works in the upper eschelons of Coach, I still fail to see why this information would be upsetting.
 
Of course this stuff is marked up big time- they know we will buy it- and tons of it... that is why I try not to spend too much on Coach because the money can be invested or spent a little more wisely in my opinion although I do occasionaly love a new bag.

you'd think at $8 they'd get the fraying thing right.

Thanks for this fact. It helps with my future decision making

:goodpost:

That was hilarious!!!
 
geeesh people act like op or whoever started this is horrible all they did is tell us a little fact and people wanna freak out and act like she is horrible! who cares if she gave us that info what do u care! u know your still going to buy the $300+ bag so get off it
 
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Disclosing this type of information can be very damaging to a company.

True, but information leeks have been going on for years, and I highly doubt that this simple post is going to have Coach consumers running to the hills. As a consumer we should all know that products have tremendous markups, it's how companies stay in business, we don't need to read blogs to know that. Honestly, I am not the bit surprized about the $8, most clothing only cost pennies on the dollar.

Apparel and accessories does have one of the highest markup in comparison to all other produced goods, but I don't care because i cannot make my own clothes and handbags.

And SLVDW47, please don't use your real name or post photos of yourself on here, for obvious work related reasons. ;) The company I work for has a 'tell all' blog, and my company is still making money, no one has been sued... yet!
 
well i used to work in retail so i've always known the crazy mark-up on clothes shoes and bags...but look at it this way ....u couldn't make a carly for 8 bucks like one of the other posters mentioned right?...also if u imagine a 30.00 purse..the mark-up on that baby must be like a thousand percent! all in all though i appreciate the heads up sweetie...
 
How could it cost them only $8 for the leather, metal, etc, labor?

Please....when they (or any big manufacturer) buy the materials in huge bulk amounts they get cheap pricing, if you but 2 million hooks and studs you don't think they pay a lot for them do you, especially if they are mde in China. Do you know how much factory workers get paid in China ? about .70 cents an hour...
So once again you see ALL you are paying for is the Coach name. That name however is becoming denegrated by a market over saturated by thier bags (real and fake), teenage girls carry them to high school, the move to China, and as we all can atsest to by the many posts put up here...the quality is taking a nose dive. Seriously- we the consumer are the fools in this scenario. Anyone who can say they feel good paying $300-400 for a bag that costs $8-15 to make is kidding themself ( this is not directed at you personally just a general comment on the issue)
 
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I for one was just cautioning her as leaking information about production costs is almost always verboten. Disclosing this type of information can be very damaging to a company.

Also, most companies have substantial G&A costs such as administrative salaries and advertising that far outweigh the price of producing their products.

Well now if they sell 5 million Carlys and make a basic profit off each bag of $295.00...ah you do the math there. I believe that well over pays any admin/employee costs they. And we are just talking about Carlys...factor in all the OTHER bags they are selling and making this same level of profit off and I won't be crying any tears for Coach's "admin costs". Please don't try and justify the rip off.
 
Does anyone feel ripped off when they bought their Carly? I didn't. I walked into the store knowing exactly what I would be paying and I was fine with that.
 
Well now if they sell 5 million Carlys and make a basic profit off each bag of $295.00...ah you do the math there. I believe that well over pays any admin/employee costs they. And we are just talking about Carlys...factor in all the OTHER bags they are selling and making this same level of profit off and I won't be crying any tears for Coach's "admin costs". Please don't try and justify the rip off.

I don't think anyone was trying to justify anything on behalf of Coach - just trying to put things into some form of perspective - yes, the profit is big as is the profit on many items especially in the apparel and accessories industry (as opposed to groceries where the margins are tiny, but the bulk sales are huge); however, the profit is most likely not $398 less an $8 cost to make a Carly - that was the point trying to be made. Everyone has the choice to research the products they buy and choose to buy or not buy and a company should make a profit otherwise they go out of business - personally I feel they shouldn't be all about greed but also take into account the human cost of the products they sell but that is very much an individual decision. Also overhead can be amazingly expensive and factors in many things because while they manufacture offshore, Coach is still a US company with retail outlets in expensive malls, expensive catalogs, a very liberal return policy, free or near free repairs and all that PR they've done recently to get their bags in all of the magazines and out to the celebs does not come cheap!
 
I just don't understand why anyone except Coach as a company would be upset about this information being better known. There are tell-all books from countless employees of countless different industries who have exposed everything from unsafe food handling to the conditions in minimum wage jobs to child labor. Upton Sinclair exposed food packagers for what they were, which led to reform.

Not that posting a snippet of information on the internet is as lofty as writing an expose of an industry, but still, this is valuable information to a consumer and is only potentially damaging to the industry or business itself. Unless a person works in the upper eschelons of Coach, I still fail to see why this information would be upsetting.

Coach is a publicly held company. Its employees from the CEO right down to the SAs have a responsibility to the shareholders to not leak insider information that could be damaging to the company.

This is a piece of information (though not particularly specific in this case) that is insider knowledge. Details on items such as cost of goods sold are potentially damaging to the company when in the hands of consumers or competitors.

The fact that some here are viewing this as valuable information for the comsumer proves that it might affect your decisions and therefore could have an inpact on the company and shareholders.

As a CPA who works for another public company I certainly would never go around saying (for example) it only costs us $4 per hour to provide this service to this client using South American labor, but we actually bill $50. Those of us in the finance arena definitely understand how detrimental it can be to broadcast this type of data. My company includes information in our training program that goes right down to our equivalents of SAs that this behavior is not appropriate.
 
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