A brutal lesson in marketing: EarthKilt

[Alan H]

I've gotten a serious dose of reality over the past few days, and I think this is the end of the line for the EarthKilt. It's too bad, it was a cool idea, I even had a nifty slogan: A kilt for today, a planet for tomorrow.

Remember that I had three main goals for the project:

1. to help out a sewing cooperative "maquila" in El Salvador that my church has been connected with for a long time, and which has taken huge hits in their orders as the global economic slowdown has arrived. These people are hurting. There is no work.

2. to generate some income to give to causes I really believe in, primarily Rain forest habitat preservation, seeing as rain forests are a huge source of A.) carbon dioxide banking (global climate change) and B.) species diversity.... both are vital issues facing us, today

3. get an affordable, completely environmentally sustainable, contemporary kilt on the market

Interested in what goes into doing such a thing? Read on.

I got a call from the Hemp/recycled PET supplier yesterday, about the project. She turned me on to a lot of details I hadn't thought of yet....for example, you HAVE to have an RN number...meaning that the company importing the kilts must be registered with the Federal Trade Commission. Not that this is a big deal, but it has to be done, and you can't import or sell any stuff, without one. The problem is only a COMPANY can do this. That means I have to either form a company (which I promised the Luminous Joan that I would not do) or find another company to tag along with, to use their RN number.

The three outfits locally...non-profits involved with El Salvadorean issues are not interested in the kilts. I suppose I could contact the Rain Forest Alliance directly, but I have my doubts that they will be interested, it's too much risk/work for them for the likely very small dollars return. So this might kill the project right there.

The President of my fabric supplier also pointed out that you have to have labels and hang tags if you're going to sell a garment in any retail establishment. Now, per unit, 500 sewn labels isn't that expensive...$65 for printed ones, a single color of ink/thread. The killer is that those aren't "sustainable" they're printed on cheap acrylic or "pearlized polyester" or nylon taffeta and if I use them I can't in good conscience call the garment "100% sustainable". Sustainable hang tags and labels are available. The labels are organically grown cotton and the hang tags are recycled board printed with soy inks. But these things cost, almost TEN TIMES what the non-sustainable stuff costs. Per unit it's not much if you make a lot of them, but the minimums needed are really high, and the up-front costs for just the tags and the labels will be over $800. You can't get S/M/L/XL/XXL environmentally sustainable tags, and even the acrylic ones are $12/100, so that's $60 just for those silly little sizing tags that you have to stitch into every garment.

On top of this...and this blows me away....you can't buy sustainable thread. Nobody sells organic cotton thread, or bamboo thread or hemp thread or hemp/recycled polyester thread. You can get tiny little home-size spools of sustainable embroidery thread, but it's not available in commercial quantities. Plain old 40-weight polyester thread is cheap, it's like $15 for 3,000 yards, and that's what I'd have to use, and that compromises the whole thing.

I could live with the polyester thread and the stupid sizing labels if everything else were sustainable, I suppose.

My fabric supplier can't directly ship from China to El Salvador. They can only do that if I order over 2,000 yards. Riiiight...Patagonia and Columbia and REI order that kind of volume, I'd be ordering 50 - 200 yards. 50 yards makes about 22 - 24 kilts, so my first run would be 50 yards. 50 yards of the material is about $500, which is OK, I was prepared for that. What I WASN'T prepared for was the fact that it's going to cost $200 to ship it down to El Salvador, and when it gets there, there's a FORTY PERCENT tariff because the material is made in China. That's another $200.

So to ramp this up, to make the initial 22 kilts will cost me....

$800 for 1,000 hang tags and labels...unbelievable
$500 for the actual fabric
$200 in import tariffs on the fabric
$200 to ship the fabric to El Salvador
$264 in assembly labor in El Salvador ($12 per kilt)
$30 for two spools (two machines would be making the kilts) of thread
$60 for the stupid S/M/L/XL/XXL labels 100 of each.
$20 for 500 buttons, enough for 250 kilts

which totals up to $2074 and I haven't even figured out what it will cost to ship the completed product back up to the USA, yet. That will for sure be at least a couple hundred dollars. Let's say/pretend that it will cost $2,200 to make 22 kilts. That's a nice round number which is probably too low. That means that MY COST of getting 22 kilts up here is $100 per kilt. I could sell them for $108 each, make eight bucks per kilt, break even and reimburse myself for my expenses so far, which have been roughly $150. Mind you, I still haven't sent any money to the Rain Forest Alliance, yet.

Why would anybody buy my low-feature kilt when they can get a more fully-featured product, with pockets, etc. etc from AlphaKilts or AmeriKilts for $35 more?

If I did that, I would sell 22 kilts and be right back where I started, except that there'd be 978 hang tags and labels in a maquila in El Salvador, 96 (of each) S/M/L/XL/XXL tags also in that maquila along with a box with 450-odd buttons, and probably some thread left over.

No, every kilt I sell has to pay for the NEXT kilt that gets made as well, right? Well, I don't have to buy more hang tags and labels for a while, I have 1,000 of them. I don't have to buy more sizing labels or buttons I have tons of those for the next two or three runs. So how much more do I have to add on to the cost of a kilt to buy the NEXT run, which I would hope would be more like 40 - 50 kilts, not 20.

$1,000 for the fabric
$400 in tariffs
$300 to ship the material to El Salvador
$45 in thread (three spools, three machines in production)
$540 in assembly labor

that's $2285 to produce 45 more kilts, or $50.77 per kilt. I have to add that on to the price of producing the first run to keep the whole thing going, so now my overall cost TO ME...this isn't even a retail sales price....is right around $150 per kilt.

I can wholesale them for about 20% more than that, or $180, which means that any retail outlet will have to sell them for $300 and there's no way in hell that these things will sell for $300. If I forget wholesale and just sell them off a website or at Street Faires and RenFaires from a tent manned by volunteers (riiiiight ) I can sell them for $175, send $20 to the Rain Forest Alliance and pay the sales tax ASSUMING that I can find some company around here who will front me knowing that they'll get five bucks per kilt, which is diddly cash for their time/work/risk..

Oh, then there's sales tax.... who on earth is going to buy one of these kilts for $175? That's a lot more than an Amerikilt or an AlphaKilt, which have more features, and even more than some models of Utilikilt.

It just isn't going to work. It would be immensely cheaper to have them made in the USA by workers getting $10 an hour, but then I'm doing nothing for the sewing co-op in El Salvador, which was one of the primary goals of the whole project, to start with.

Unless some miracle happens, I'm afraid reality has put the kibosh on the EarthKilt concept.