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%.
It's more like if you find one mushroom in the forest, it doesn't make sense to bring it home, get the knife, clean it, get the pan, oil the pan, fry the mushroom, eat it, clean the knife, clean the pan, put things away. It's not worth the effort for just one mushroom. If there are many, a lot of these actions only need to be taken once.
There is no global definition of "less common size". It varies greatly from one locale to another. At the same time, production has relatively high fixed costs and is centralized.
It would be very expensive for the global factory to customize the distribution of sizes manufactured for a retail store in Des Moines, Iowa. The order is tiny and it would require customized logistics, all of which greatly increases cost and complexity.
The missing factor in cheap-fast fashion here is warehousing costs. Companies are shredding shoes and landfilling clothing — and underproducing relative to what they could sell — rather than paying money to store products in a warehouse. One possible outcome the EU sellers can choose is to reinvest in product storage, so that they can raise their production targets to meet demand rather than to minimize product storage — at which point there is a vast demand for outlier sizes that is, today, unmet due to the unwillingness to store anything.
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.
Many years ago I worked in the printing industry. F.ex. a client wants 100 products of something (e.g. posters or flyers), usually it was more cost effective to produce a 1000 (or more) and then throw away 900 the client didn't need. Obviously a huge waste of material.
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?
Fashionable clothes are perishable. "Nobody" wants to buy clothes from last season or last year.
Storing the clothes until they come back in fashion is expensive... and some materials really won't be useful after sitting for 10 years anyway. (Elastic bands really are perishable)
Because it won't take twice as long, but 10x as long. There's typically a large rush on a new design, followed by a slow tick in sales. Meanwhile you have to pay to warehouse it, pay tax on the inventory, etc.
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.
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?
It's more like if you find one mushroom in the forest, it doesn't make sense to bring it home, get the knife, clean it, get the pan, oil the pan, fry the mushroom, eat it, clean the knife, clean the pan, put things away. It's not worth the effort for just one mushroom. If there are many, a lot of these actions only need to be taken once.
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There is no global definition of "less common size". It varies greatly from one locale to another. At the same time, production has relatively high fixed costs and is centralized.
It would be very expensive for the global factory to customize the distribution of sizes manufactured for a retail store in Des Moines, Iowa. The order is tiny and it would require customized logistics, all of which greatly increases cost and complexity.
Companies should have extensive data on how many of what size they can expect to sell.
The missing factor in cheap-fast fashion here is warehousing costs. Companies are shredding shoes and landfilling clothing — and underproducing relative to what they could sell — rather than paying money to store products in a warehouse. One possible outcome the EU sellers can choose is to reinvest in product storage, so that they can raise their production targets to meet demand rather than to minimize product storage — at which point there is a vast demand for outlier sizes that is, today, unmet due to the unwillingness to store anything.
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?
Many years ago I worked in the printing industry. F.ex. a client wants 100 products of something (e.g. posters or flyers), usually it was more cost effective to produce a 1000 (or more) and then throw away 900 the client didn't need. Obviously a huge waste of material.
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1k in this example would be the minimum needed to make it worth the static cost of setting up and tearing down the production run.
> 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?
Yes. The law was motivated by reports of luxury retailers destroying their entire stock every year. Usual stores just discount stuff until it sells.
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?
Fashionable clothes are perishable. "Nobody" wants to buy clothes from last season or last year.
Storing the clothes until they come back in fashion is expensive... and some materials really won't be useful after sitting for 10 years anyway. (Elastic bands really are perishable)
2 replies →
Because it won't take twice as long, but 10x as long. There's typically a large rush on a new design, followed by a slow tick in sales. Meanwhile you have to pay to warehouse it, pay tax on the inventory, etc.
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.