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Old 12-30-2010, 09:30 PM
  #5  
e4
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Join Date: Sep 2010
Location: USA
Posts: 110
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The world cotton crop was horrible this year and the price of cotton is increasing. That I understand. However, I don't like the attitude of manufacturers and retailers that its just the price of the cotton. The realities are that increase in the price for cotton in a typical yard of LQS quality fabric is about 14 cents. Because the markup taken by each of the steps in the process generally is at a fixed percentage that takes the price up 50 cents or more per yard. If the yarn producer adds a a 50% markup to his costs that adds another 7 cents based on the cost of the cotton - now that same cotton in yarn costs 21 cents more. If the fabric manufacturer then adds a 50% markup then the same cotton in fabric costs about 32 cents more and if the retailer adds a 100% markup that means the same 14 cents worth of cotton now costs 64 cents - 50 cents more than was paid to the farmer. The actual cost of the fabric (without fixed markup) is actually cost 14 more cents. But the blame for that 64 cent (my example, not a real cost) increase per yard of fabric is placed on the cotton (that really did cost 14 cents more per yard of fabric). Well, it sort of is since the markups are not based on actual costs, but percentages, but at each step along the way people are still making higher profits (assuming they sell the same amount of fabric - which could drop of course).
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