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| photo by Aileen Siroy Photography |
In late July, my partners and I ended the fabulous introductory price of P2,500. The price of our 11" satchel has been P3,500 since then. That already includes packaging and shipping within the Philippines. For an all-leather, handmade bag, that's a really good price, but for some of you, that's astronomical. Girls, astronomical is an Hermes. My satchel, in comparison, is crazy inexpensive.
And so I dedicate this post to all of you who wonder why things cost the way they do. I don't like doing educational posts because my image as a silly, shallow girl gets shattered. Like, totally. But as more and more people deluge my inbox with tawad, I just have to address this topic of cost. I like to imagine you were daydreaming or flirting or napping during your Economics class, you naughty girls! So sit up straight, smooth down your blouse, and pay attention!
First, it's all about economy of scale. The more items we make, the cheaper the item gets. How is that possible? Well, when Uncle Buck buys leather, he has to go all the way from Batangas to Malabon and back. Let's say one cow hide costs P1,000 and it makes 4 bags, does that mean a bag should cost P250? No. Uncle Buck spent time and money for his trip. And that's a very long trip! So if one trip means he buys a lot of hide, then the cheaper the bag gets.
Same with delivery. Again, that's gas burned to and fro Batangas to Mandaluyong (where I live). So even if Uncle Buck finishes one bag in 2-3 days, we wait for a batch of finished bags before he delivers here. To keep gas costs down, we ask for just one delivery.
But because everything is painstakingly handmade, we can't accommodate huge orders. Believe me, I'd love to sell a thousand bags a month but Uncle Buck can only make a few so there goes my get-rich-quick dream of supplying to SM!
Second, there's the cost of labor and other expenses. Uncle Buck has a very small team of craftsmen making the bags, which are completely cut, tanned, tooled and sewn by hand. No machines at all! Sure it's slower but the bag comes out much better. It's not just their time and talent that you're paying for, however; there's also mine! I spend a few hours each day answering bag inquiries, checking and making payments, wrapping bags, writing thank you notes, sending the bags out. My time isn't free. Neither is my phone bill. Oh and my stationery, my pen, my Scotch tape, etc!
My two partners also devote their time and energy to this business and we don't get a salary from it. My entrepreneurial friends say we should get a salary but we chose not to because that's just going to drive the price way up. What should our salary be? Well, in my case, as a professional writer and editor, I already command a pretty good price for an hour's work. If I charged the bag business my rate, then one satchel will be in the P10,000-15,000 range. That's just my rate; I haven't included the hourly rates of my two other partners!
Fourth, your bag is rare. Because it's completely handmade by only a small group of leather craftsmen, only a few people in the world own that bag! This is not a mass-produced bag. Consider, for example, how a fashion chain orders 500,000 black dresses and 500,000 pairs of black peep-toe heels from China. While you may think you made a unique fashion statement in your cute LBD with matching shoes, so did 499,999 other girls. That doesn't make you very unique!
So you might be thinking (and I actually got this question), "Well then, why don't you just get cheap leather and get machines to cut and stitch the whole damn thing?" Unbelievable.
Because, first, there's no such thing as cheap leather. Unless you're talking about fake leather, which means it isn't leather, right? Second, if we got machines to do the job, then the fabulous craftsmanship of each bag I sell will be lost. Third, if I can produce a million bags (that would be nice!), yes, the bag will be waaaay cheaper but it would have lost its unique appeal. Then what's the point of my bag if it's just going to look like any old fake leather cheapie?You know, after listing down all my reasons above, I am now convinced that my price is actually incredibly low. As my customers from the United States keep saying: "A genuine leather bag that's handmade and it's only $80?! Are you sure it's only $80?!" Maybe I should raise my price!
My bespoke leather satchel is for the discriminating customer who values hard work, quality and the value of her peso. My customer appreciates style and craftsmanship and is willing to pay for it. If that describes you, then buy my bag!
