It can be made available online with a longer lead time if the manufacturers care enough about it. I guess it depends on whether the complexity is worth it, because if you're just selling cheap fast fashion then discounting/donating might still be worth it even if you produce excess, but more high-end brands probably won't stock uncommon sizes.
Yes, this will likely exacerbate that further in the short-term: if retailers simply stop producing outlier sizes to reduce disposal of those sizes, then various niches will open up. In US women’s flats, very few go up to size 12+ (it’s already higher-cost to make products in outlier sizes and most don’t!) and so the one retailer (agaik) that offers that size has 100% market share, and keeps an inventory warehouse of unsold product that is listed until it sells at up to 80% discounts after a year-plus on the shelf. Another handful of retailers specialize exclusively in women’s clothing for people XL and above, which allows them to profit equally as well from less-common sizes.
My hope, however, is that this reduces overseas manufacturing in favor of domestic, which would allow retailers to dramatically reduce the shipping costs for small production batches, so that they’re able to simply produce more small batches of less-common sizes in response to demand. Sure, they might see a few percent lower profits per item, but they’ll be able to sell considerably more of their product simply by raising their supply to meet demand with finer granularity than the cheaper ‘produce an entire season one-time only and store it in a cargo container’ model offers today.
The invisible hand of the market has been handcuffed a bit here though. Though I imagine this will simply show up as higher cost rather than blanket inavailability.
If a charity sets up a ‘returned product classification’ flow and issues tax credits to companies donating their return flow to the charity, then companies can simply shunt returns to charity and lower their costs in triplicate: 1) changeover of return provider replaces expense with deduction; 2) compliance with EU regulations costs shipping to charity; 3) charity provides itemized receipts for compliance and further tax credits. Of course, companies won’t actually lower their prices to reflect the net reduction in costs, but it will certainly strip away the excuse that they must raise costs.
The invisible hand of the market is already disabled by regulation, in this case trademark protection.
For example: if Nike is willing to destroy 100$ shoes, instead of selling them at 40$ discount, for brand protection, another shoemaker could try make identical shoes and sell them at discount. But the alternative shoemaker is not allowed to make identical shoes, this would infringe Nike trademark.
It seems plausible. Less common sizes have a lower chance of being sold out, so if they can no longer be destroyed at the end and need to be further managed at lower quantities, it can become more cost effective to simply not make them. Whether it is true or not, I don't know.
Hmm... say you estimate that you will sell 1000 items of "normal size", you stock 1000 items, and hope that you sell all of them. You end up selling 900, you have a remaining 10%.
No say you estimate that you will sell 10 items of "less common size", you stock 10 items, and hope that you sell all of them. You end up selling 9, you have a remaining 10%.
Normally you can overproduce clothing and make three of every size or something, knowing that it only costs a couple bucks to make another shirt, for instance. And you can throw out if you make too many. If it's illegal to throw it out, maybe that raises the price from $2 to $4 because now you have to pay for storage for a long time. So you'll buy less inventory at the start, which usually means cutting less common sizes first
Currently, unpopular sizes are over-produced because they are subsidized by popular sizes. If the unpopular sizes have to be paid for, the logistics and production processes would push producers to under-produce popular sizes.
A key insight is that what constitutes an "unpopular size" is a very local phenomenon. Every point of retail sells a different, semi-predictable distribution of sizes. It is much cheaper to ship sizes no one will buy than to manage the logistics of exactly matching local demand for a specific distribution of sizes.
I asked the same question to someone who works in this business and got an eye-opening detailed explanation that made it obvious in hindsight why things the work the way the do. The difference in product cost and logistics infrastructure was not small.
If your minimum run is 1000 of a size, and you can only really sell 500 because it's an uncommon size, and you would prefer to sell at full price or not at all, seems like making that size no longer fits your plans.
That really only applies to luxury designer brands where selling at a discount can dilute the brand prestige, is Gucci, Versace, etc. really destroying unsold inventory at large volumes vs. standard retailers?
It's really different depending on if the manufacturer has Brand reputation or is just a replaceable good. For no name jeans, they probably just keep making them and donate the leftovers.
For a high-end designer dress, may be better to not manufacture large or small sizes that don't sell frequently.
[delayed]
It can be made available online with a longer lead time if the manufacturers care enough about it. I guess it depends on whether the complexity is worth it, because if you're just selling cheap fast fashion then discounting/donating might still be worth it even if you produce excess, but more high-end brands probably won't stock uncommon sizes.
Yes, this will likely exacerbate that further in the short-term: if retailers simply stop producing outlier sizes to reduce disposal of those sizes, then various niches will open up. In US women’s flats, very few go up to size 12+ (it’s already higher-cost to make products in outlier sizes and most don’t!) and so the one retailer (agaik) that offers that size has 100% market share, and keeps an inventory warehouse of unsold product that is listed until it sells at up to 80% discounts after a year-plus on the shelf. Another handful of retailers specialize exclusively in women’s clothing for people XL and above, which allows them to profit equally as well from less-common sizes.
My hope, however, is that this reduces overseas manufacturing in favor of domestic, which would allow retailers to dramatically reduce the shipping costs for small production batches, so that they’re able to simply produce more small batches of less-common sizes in response to demand. Sure, they might see a few percent lower profits per item, but they’ll be able to sell considerably more of their product simply by raising their supply to meet demand with finer granularity than the cheaper ‘produce an entire season one-time only and store it in a cargo container’ model offers today.
The invisible hand of the market will rectify this of course. Nothing to see here.
The invisible hand of the market has been handcuffed a bit here though. Though I imagine this will simply show up as higher cost rather than blanket inavailability.
If a charity sets up a ‘returned product classification’ flow and issues tax credits to companies donating their return flow to the charity, then companies can simply shunt returns to charity and lower their costs in triplicate: 1) changeover of return provider replaces expense with deduction; 2) compliance with EU regulations costs shipping to charity; 3) charity provides itemized receipts for compliance and further tax credits. Of course, companies won’t actually lower their prices to reflect the net reduction in costs, but it will certainly strip away the excuse that they must raise costs.
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The invisible hand of the market is already disabled by regulation, in this case trademark protection.
For example: if Nike is willing to destroy 100$ shoes, instead of selling them at 40$ discount, for brand protection, another shoemaker could try make identical shoes and sell them at discount. But the alternative shoemaker is not allowed to make identical shoes, this would infringe Nike trademark.
What do you mean? This is a case of a regulation distorting the markets ability to price and distribute goods.
How do you figure?
It seems plausible. Less common sizes have a lower chance of being sold out, so if they can no longer be destroyed at the end and need to be further managed at lower quantities, it can become more cost effective to simply not make them. Whether it is true or not, I don't know.
Hmm... say you estimate that you will sell 1000 items of "normal size", you stock 1000 items, and hope that you sell all of them. You end up selling 900, you have a remaining 10%.
No say you estimate that you will sell 10 items of "less common size", you stock 10 items, and hope that you sell all of them. You end up selling 9, you have a remaining 10%.
How does that make a difference?
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Companies should have extensive data on how many of what size they can expect to sell.
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Normally you can overproduce clothing and make three of every size or something, knowing that it only costs a couple bucks to make another shirt, for instance. And you can throw out if you make too many. If it's illegal to throw it out, maybe that raises the price from $2 to $4 because now you have to pay for storage for a long time. So you'll buy less inventory at the start, which usually means cutting less common sizes first
> because now you have to pay for storage for a long time
Or you sell the extras off at a discount and it's fine.
Currently, unpopular sizes are over-produced because they are subsidized by popular sizes. If the unpopular sizes have to be paid for, the logistics and production processes would push producers to under-produce popular sizes.
A key insight is that what constitutes an "unpopular size" is a very local phenomenon. Every point of retail sells a different, semi-predictable distribution of sizes. It is much cheaper to ship sizes no one will buy than to manage the logistics of exactly matching local demand for a specific distribution of sizes.
I asked the same question to someone who works in this business and got an eye-opening detailed explanation that made it obvious in hindsight why things the work the way the do. The difference in product cost and logistics infrastructure was not small.
If your minimum run is 1000 of a size, and you can only really sell 500 because it's an uncommon size, and you would prefer to sell at full price or not at all, seems like making that size no longer fits your plans.
Wouldn't it be cheaper to only produce 500 items, instead of producing 1k, and throwing half of it away?
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> prefer to sell at full price or not at all
That really only applies to luxury designer brands where selling at a discount can dilute the brand prestige, is Gucci, Versace, etc. really destroying unsold inventory at large volumes vs. standard retailers?
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But clothes aren't perishable, so why would you only be able to sell 500, rather than it just taking twice as long to sell all 1000?
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It's really different depending on if the manufacturer has Brand reputation or is just a replaceable good. For no name jeans, they probably just keep making them and donate the leftovers.
For a high-end designer dress, may be better to not manufacture large or small sizes that don't sell frequently.