Written by Kate Danielsen
Consumers often decry ethical and sustainable fashion’s high cost, describing it as “exclusive” or “elite.”
And it’s true: There is something deeply messed up about our globalized fashion industry. Fast fashion has taught us to expect that a t-shirt should cost less than $10, that we can buy a cheap, copy-cat of a celebrity look within the week, and that new collections should be constantly dropping — McKinsey has observed as many as 52 “micro-seasons” in a single year.
So, when an ethical and sustainable brand produces a shirt that costs $30, $50, or even $80, it’s easy to write them off as a label who only cares about affluent customers.
But with just a few notable exceptions, it’s not greed driving the high cost of ethical fashion. It’s actually the opposite.
We spoke to brands and thought leaders in the field to break down the six main cost drivers behind the high cost of ethical and sustainable fashion.
“Labor is the predominant factor” driving costs for sustainable and ethical fashion, says Rebecca Van Bergen, Founder and Executive Director of Nest, a nonprofit increasing global workforce inclusivity across the industry. “The more steps added and the further away the sale of the good is from the person who made it, the more investment the brand must undertake — financially, and in terms of time and education, as well.”
On the Sustainability page for Hope for Flowers, launched by the designer Tracy Reese last year, the brand says, “We know that the workers in that supply chain are not making a living wage, but most consumers aren’t aware of that… they’re not thinking about where it came from, or the people along the supply chain who suffered so they could get that great bargain.”
In Bangladesh, the second-largest exporter of fashion to the U.S. and one of the cheapest places in the world to source fashion, the legal minimum wage for garment workers is 8,000 taka (about $94) a month, far below the estimated living wage of $189, which would provide a family with proper food, shelter, and education. In fact, an estimated 93% of garment workers aren’t paid enough to live on, including in the United States.
Advocates will often point out that it only costs a few cents per garment to pay a cut-and-sew worker in Bangladesh a living wage. But there are many more people across fashion supply chains whose wages — exploitative or fair — contribute to the final cost of the finished garment: tannery employees; workers who transform raw materials into dyed fibers and fabrics; laborers in factories who cut and sew garments to completion, homeworkers who embroider or package clothing; warehouse workers who pack and ship product to consumers; retail workers, and corporate office employees.
The more of this labor that is done in countries with strong labor protections, from the European Union to Canada, the more the costs will be multiplied. While it may seem like the standard 500% markup that goes to the small brand and retailer is just greed, it’s often largely because the federal minimum wage in the U.S. (which is still not adequate to live on) is more than 10 times that of Bangladesh, and more than twice as much as Turkey. And even customer service employees need to be paid at least the minimum wage, if not much more.
Emily Herron, founder and designer of EMLEE, shared an anecdote about a colleague of hers who sourced French terry for a project: it was organic, milled in the United States, “gorgeous to the touch,” and from a distributor who paid its cotton pickers fairly. But it was $30 per yard — “two or three times the going rate for conventional terry fabric.” A dress can use up to six yards of fabric, so the fabric choice alone would add $75 to $120 to the cost of a sustainable dress.
“That cost ultimately trickles down to the consumer,” Herron says. “We’re shooting for the intersection between quality, ethical production and sustainability, and sometimes that drives prices way up.”
For instance, when Vanessa Barboni Hallik, founder and CEO of luxury brand Another Tomorrow, first started out, she says she was naïve in thinking there would be a broad range of high-quality materials that simultaneously met the company’s standards for ethics and sustainability. As a consequence, she went a step further than sourcing pre-loomed fabrics to instead sourcing the raw materials — wool directly from the sheep, cotton buds directly from the farm. While this allowed her more visibility on considerations such as animal welfare and organic farming standards, it also cost the brand a 20 to 35% premium.
There’s also the consideration of cost-per-wear. While the upfront cost for these pieces can often be multiple times higher than the conventional alternative, they’re designed to be timeless and high quality, so that consumers can wear them many, many times over several years before they’re done with them. If the average consumer tried replacing five impulse buys with one well-considered and researched ethical buy, they might be surprised at how it transforms their relationship to their closet.
“When people spend more money on an ethically- and sustainably-made garment, my hope is that they’ll be wearing it for years to come,” says Herron. “That means it must be ultra-high quality, as well, or the entire point of investing in a piece is null.”
Certifications and Transparency
Paying a fair wage doesn’t just come down to the wage itself, neither does sourcing a sustainable material come down to the cost of the material. There’s also the paperwork and documentation involved to prove it.
Outerknown, a lifestyle brand committed to “radical sustainability,” has laborers across seven countries and four continents. Their suppliers adhere to strict fair labor standards that often align with certifications from the Fair Labor Association, Bluesign, and Fair Trade, which kicks extra money from participating brands toward a pot of money that garment workers can democratically choose to use for various purposes.
While certifications aren’t the only way to ensure just treatment at the base of the fashion supply chain, they do establish standards between brands and their workers; and therefore, trust between brands and consumers. But certifications — and the regular audits that accompany them — can be expensive, increasing a brand’s overhead, which also shows up in the final cost of the garment.
Economies of Scale
One way that conventional fashion keeps its prices low is by producing vast amounts of stock, even when there isn’t a market for these enormous quantities. When production numbers go from 100 to 10,000, fixed costs (such as rent, machinery, and taxes) are spread across all of the units. The expanded scale of production also refines the process and turns it from a handcrafted process done by an expert tailor to a production line in which each worker does one small piece — like a back pocket — thousands of times in a row, reducing costly inefficiencies. For example, Fashion Nova, a fast-fashion, e-comm darling where consumers can purchase a dress for $12.99, produces 600-900 new styles per week, and plans to increase that pace.
Meanwhile, many “slow fashion” brands are made-to-order in the United States, or produce small-batch runs. EMLEE’s Herron employs two seamstresses and produces most of her garments made-to-order. Start-to-finish, a single garment might take between two and four weeks to be delivered. She also offers custom orders and special alterations. This reduces waste by allowing the brand to strategically cut and sew available fabric, as well as by avoiding overproduction and encouraging the customer to view each purchase as a staple, heritage piece. But that time and care cost money.
Ayesha Barenblatt, founder and CEO of Remake, an organization building a conscious consumer movement based on workers’ dignity, says that the economies of scale are always discussed through a “pro-growth” lens. As in, bigger is better, for the economy and workers. But the bigger you get, “the more ill-disciplined your supply chain becomes,” she says. “It’s harder to maintain — and oversee — the factors that contributed to a brand’s founding responsible ethos.”
When a relatively small brand grows enough to move their production to a large garment factory, they end up responsible for just a few machine lines in warehouses that make tens of thousands of units per day under multiple contracts. While this approach to production may cut costs, these brands then have less leverage over the ethical and sustainable practices of its producers.
This production model is inherently unsustainable. But it’s the main thing driving fast fashion’s low prices.
Marketing and Retail Overhead
At the end of this chain of events, the product must make it to the consumer. A major question for sustainable and ethical brands is, “how?”
In the traditional wholesale model, a brand sells their finished garments to a wholesale distributor — Nordstrom, Saks, and REI are just a few examples — who sells the piece to consumers and keeps a cut. This is a good way for new brands to get their product in front of more consumers and focus on making a beautiful product instead of getting caught up in the details of retail.
Direct-to-consumer (DTC) means that the brand sets the price and puts it online or in their own store. All profits go directly to the brand, and some startups say that cutting out the middleman allows them to sell clothes for half the usual price.
While neither wholesale or DTC is inherently more ethical or sustainable, both approaches incur costs that ultimately factor into the price of an item, especially for relatively smaller ethical brands.
While DTC used to seem like an easy way for brands to control their own profit margins — and keep costs lower for consumers — it requires significant infrastructure and investment: either through a brick-and-mortar store or a slick e-commerce site. After these investments, a brand also needs to pay digital marketing, user experience, and customer service professionals to keep everything running smoothly.
For the last decade, venture capital money allowed fashion startups to price their products artificially low. But the cost of reaching new customers using digital marketing has been going up and up, in some cases surpassing traditional wholesale costs. Pre-pandemic, DTC, brands like Everlane, Cuyana, Reformation, and Rothy’s had all decided to open physical stores and even entered into wholesale relationships with Nordstrom. (The fact that several of these brands have been criticized for greenwashing and unethical practices speaks to the fact that DTC isn’t proving to be the easy money investors were hoping for.)
While handing over 25% of the sale price of a garment to a department store can be painful, the rent on a store in a big city can become one of a DTC’s brand’s biggest costs. During the Pandemic, some brands are refusing to pay millions of dollars in rent. Other brands, both large and tiny, are closing stores permanently.
It’s anyone’s guess whether Pandemic-induced store closings will permanently shrink the rent costs of big brands, but Remake’s Barenblatt hopes that the money saved on rent will be used for good. “The era of brick-and-mortar stores and the American Mall is dead. If the majority of fashion moves to a direct-to-consumer, highly-online model, all of that real estate money becomes savings. Where will that investment go? It could mean investment in R&D for circular materials; improvements in global working conditions or something more.”
Exclusivity vs. Transparency
One bright spot in the cost of ethical fashion is that you know why it costs more.
New ethical and sustainable fashion is more expensive than fast fashion. But the reverse is not necessarily true: Expensive (luxury) fashion isn’t necessarily ethical or high quality.
While Another Tomorrow self-identifies as luxury and targets the intersection between ultra-high quality and responsible production, brands such as Valentino and Michael Kors price around exclusivity instead of value or utility. The lack of transparency is the point.
“A big problem in fashion for the last 20 years is that luxury has been largely — if not exclusively — associated with price,” Barboni Hallik says. “While there’s no way a $7 t-shirt is sustainable, it is most certainly possible that ethically- and sustainably-produced clothing can be more affordable than conventional options, at least in the luxury market.”
That’s because many ethical brands are very transparent about their practices and where the money goes. You can be sure you’re paying for a quality product and not for a logo.
True Fashion Inclusivity
This piece began with the acknowledgment that buying new clothing is a privilege — regardless of how often we do so or how much money we spend to do it. To own this privilege in the world of fashion first requires self-reflection: how and where can I change my habits to lift up the world around me? What are my limitations?
When considering new, ethical and sustainable garments, it’s important to expand our understanding of “inclusive.” The factors contributing to ethical fashion’s higher price points — fair labor, safe workplaces, artisan craft, organic and regenerative materials, local and small-batch production — prioritize the dignity and safety of garment workers and their communities, and the long-term sustainability of the planet, above the ability of American consumers to wear something new and hyper-trendy every time we post on Instagram or go out to a party.
Ethical and sustainable fashion is ultimately about redistributing wealth (from upper and upper-middle class consumers to low-income workers) by taking an investment-oriented, intentional approach to fashion consumption. That’s not always easy to do in an economy like ours where ethics, inclusion and sustainability in fashion are radical positions, and the middle class is increasingly falling behind.
And we don’t support guilt-tripping small ethical fashion designers for the prices, when they are just charging enough to pay artisans a fair wage, keep rivers clean, and keep their business going. That’s just asking for a discount in a different language.
If you have a tiny budget, maybe you can purchase a few secondhand pieces that can serve multiple purposes, or save that money for one or two investment pieces from a label that’s trying to do better. Bigger budget? You have a responsibility to research and find your favorite ethical brands, commit to stop purchasing from those that don’t align with your values, and also just buy fewer things. Also consider second-hand luxury, the fastest-growing market in fashion.
Responsible fashion urges us to spend our money on things we believe in. However we interpret that — wherever our privilege lies — it’s an investment in ourselves, our societies, and our planet.