Just where does all the money go when you buy clothes?
There are plenty of people who end up getting their hands on the cash you shell out for a pair of jeans. The trouble is that it’s the very people who make the things that are right at the bottom of the pile. Here’s how it all breaks down…
The government: 17.5% - they call it VAT (Value Added Tax) and it’s one of the main ways that the government raises money
The brand: 25% - their quarter covers their marketing and other overheads, with the rest making up the profit
The shop: 50% - a huge slice goes to the retailers, who more than cover their overheads
The transport: 11% - these companies make money by making sure that the garments get to the shops on time
The materials: 13% - the cloth and other materials will be moved around from the country of origin to the places where the jeans are assembled
The workers: 0.5% - do the maths and you’ll see that on a £30 pair of jeans it’s not much of a wage at all *
The jeans journey
By the time you take them home, your jeans could have travelled further than you think. Here’s an example of how the story goes…
First up, the retailer works out what is going down well on the high street and places an order for a certain number of jeans designed to a particular style. They decide how much the jeans should sell for, and figure out how much they are prepared to pay their suppliers.
A middle man (or ‘buyer’ if you want to sound clever) then puts in an order with a company in, for example, Hong Kong, which imports the cloth from South Korea and cuts it in its hi-tech factories.
These cut pieces then find themselves shipped out to factories nearby where they are stitched together by hand. After this the jeans are shipped to the UK where the buttons are sewn on by women working at home.
Finally the jeans are packaged in a factory in East London then sent off to the retailer who gets them into their stores throughout the UK and Ireland.
*source: Labour Behind the Label