Transparency: How we work
Our mission is help create a more fair and transparent fashion industry. To achieve this, it’s important for us to communicate who makes each garment we sell, what it cost, and how we run our company. In this post, we want to share how we operate, how we define a fair wage, and what it takes to create a financially sustainable model that has a positive impact on society.
We believe all workers, incarcerated or not, deserve a living wage for their work. We have chosen to work specifically with incarcerated women because we know that a good job with fair pay and proper training can create the opportunity for a better life for both workers and their families—many of whom were imprisoned specifically for poverty-related crime. The wages we pay are benchmarked with the International Labour Organization (ILO) guidelines, and our employees work approximately 30 hours per week to respect other activities within the facility.
Cost breakdown of a sweater
The total labor cost of knitting, finishing, linking and steaming each garment is $15 per sweater. In additional, we invest $25 per sweater in the highest quality baby alpaca wool locally available, and pay $20 to cover the operational costs of our local production manager, inventory for the workshop and maintenance of the machinery.
Bio-degradable packaging and shipment between Peru, our warehouse and our customer costs roughly $19, and we pay 6% of our retail price to our e-commerce and payment providers putting our total cost per sweater at $100.
Traditional fashion retail has a markup of 4-5x cost, but as we are focusing on direct-to-customer sales we can limit this markup to 2-3.5x cost, which covers our business expenses including marketing, sales, design, product development and our team.
The total cost to our customers of the Milano sweater is $278, plus 25% VAT. This makes the final price $345.
A business case for the planet
We are setting up our own production sites in order to match our seasonless production with demand and minimize waste in our supply chain. This is not only better for the planet, but it also means eliminating dead-stock and financial risk. By setting up our own value chain, we know and control each moving part and can continuously optimize and improve. That also enables us to be fully transparent. Our goal is that each part contributes positively to the rise of a slow-fashion industry.