← Clotheshorse with Amanda Lee McCarty
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- [00:00]
Amanda
I get depressed in the summer I have since I was a kid. And please tell me that I am not the only person who hated summer break. Because, yes, I missed school. I think I kind of still missed school. I hated being stuck at home and doing housework and being sweaty and lonely and, you know, summer TV was boring, and it just. I felt purposeless and lonely. And while. While summer break was only three months long. I mean, and I'll just say here, before we continue, I would love to have three months off now. I feel like when I was a kid, adults would tell me stuff like that, and I just was like, you don't understand. But now I'm just saying I would love 3 months paid time off right now. But back then, man, three months felt like three years. In July, it would just feel the worst, right? It felt like that month would never end. And maybe, maybe for that reason, it remains my least favorite month. Apologies to all of you who are cancers. I just. July is hard. As an adult, you know, with no summer break, unfair. I still had this really weird feeling about summer that just was always there. It always crept in even when I wasn't thinking consciously about it's summer, right? On one hand, it's like, great summer means warm weather and swimming and picnics, riding my bike without a brutal arctic headwind. In Portland, it means blue skies, sunshine. Everybody just gets wild during the summer in the best possible way. But also, where was I really swimming and picnicking? I was probably working. And instead I was sweating my butt off on those bike rides rather than being cold and wet. And I don't know if that was an improvement because I just felt greasy, smelly, and ew. You know, summer got really hard in my twenties when my partner Ryan died. Now there's this roughly six week long period each summer, which, spoiler alert, I am in it right now. And during that period, I feel like I have to put an extra amount of effort into being an okay, functioning adult. It starts on June 26, which is Ryan's birthday. And I'll tell you, I might have no awareness of the date, but the feeling comes in. It's like my subconscious is always keeping track of the time, even when I'm too busy with work or other things to consciously know that it is June 26th. My brain is like, oh, here we go. Let's start feeling sad. So it starts then, and it carries through past the day he died, which is July 21st. And it continues through my birthday on August 10th. And I'll tell you, my birthday has Always been a pretty terrible time, with a few exceptions. Even growing up, my mom just, like, hated our birthdays. I'm really glad I've gone to therapy. Just gonna say here, but my mom. How much did my mom hate birthdays? I feel like I'm about to deliver a punchline here, but. And it is kind of funny in a dark way, she scheduled a tonsillectomy for me. My tonsils were removed. I also had my adenoids removed and tubes put in my ears.
- [03:44]
Janine
Surgery.
- [03:45]
Amanda
Pretty major surgery on my eighth birthday. So there I was in the hospital getting surgery on my birthday.
- [03:55]
Janine
Not an accident, I swear.
- [03:56]
Amanda
We commemorated my birthday a week later with a Dairy Queen ice cream cake. And I remember feeling so full, full of rage that year. Just like, why? Why? I don't care about this ice cream cake. It doesn't fix things. In fact, it hurts to eat it. I don't even really like ice cream that much then and kind of even now. But I'll tell you this, I do still love a Dairy Queen ice cream cake. And maybe I'll get myself one this year because there's something about the icing on them and the weird crunchy fudge stuff in the middle, which I know is not gluten free, but man, so good.
- [04:31]
Janine
This is not an ad for Dairy Queen.
- [04:33]
Amanda
It is perhaps the silver lining of that tonsillectomy. Yeah, I'm sure there are some health benefits, too. Whatever. We're talking about cake here. Anyway, I'm telling you all of this not because I'm looking to depress you, which probably wouldn't be very hard right now as it is here as I'm recording it. July 4, 2025.
- [04:53]
Janine
I'm not trying to depress you, and.
- [04:55]
Amanda
I'm also not trying to get you.
- [04:56]
Janine
Hyped about Dairy Queen.
- [04:57]
Amanda
But if you do go to Dairy Queen, enjoy. Rather, I want to give you an impression of where I was mentally 5 years ago this week when I was finishing and then releasing the very first episode of Clotheshorse. It was July, so you know where my head was. I would have already been depressed and anxious, working overtime to be cheery for my kid and my husband. But July of 2020, ah. I don't need to tell you that all of my summer despair and anxiety was turned up exponentially. First off, I just made the decision to go no contact with my mother in December of 2019. So that was still fresh in there too, right? It's just like one more thing in the back of my brain. But we were living in Philadelphia and tear Gas was occasionally trickling through our window as the police tried their hardest to. To harm good people taking a stand against racial injustice following the murder of George Floyd. So there's just a lot of helicopters and tear gas and pandemic fear. And the trash was only being picked up sporadically because many of the city's sanitation workers were sick with COVID so everything stank. We closed the windows to try to keep the stink of garbage out, unsuccessfully. Every time I looked out the window, there were just huge rats and insects. I hanging out on the sidewalk, just sort of daring me to chase them away. I did not. Once a day, I would leave the house to take a walk with my friend Jilly. And we always got weird and quiet when we passed the refrigerated trailer that was serving as a mobile morgue outside the hospital. Things were bad. Things were bad for most of us, right? And here I am, I'm already like, oh, it's the summer. Despair is here. And then, like, everything is just piled on top of it. I had no job. This was a very scary place to be for my family because I was and have often been the primary breadwinner. Despite being out of work since the end of March, by July, I still had not received even a single unemployment payment because the system was kind of collapsing in Pennsylvania and just about every other state in the U.S. my cat Mo, was dying. Like, actively dying. Dustin was cheerfully, bless him, trying to sustain us with tedious contract work designing pharmaceutical packaging. We were all trying so hard to just be okay. And every morning I woke up wondering, you know, would I get Covid and die soon? How were we going to be able to afford groceries next month? Were we going to get evicted? Wouldn't movie make it through another day? I had. I tried to stay occupied by making tortillas. I made a lot of tortillas, and they were delicious. The smoke alarm was going off constantly, but worth it. I played the Sims until I kind of resented my Sims for having no autonomy, which, you know, is kind of the point of the game. I cleaned the house over and over again. Although I'll just tell you, that house was so old, there was only such a level of cleanliness it would ever achieve. But I tried my hardest. It was just getting more difficult each day to take a shower and get dressed and do something other than worry. And I, as a person who has been dealing with bipolar disorder most of my life, I am very conscious of that moment, that point where I feel like I can't take a shower and get dressed anymore, because that's a tipping point, usually for me, where I'm about to get into a level of depression that only, like, probably hospitalization is going to be able to help me through. So I. I was like, also worrying, like, oh, is this going to be the summer that I end up in the hospital, but probably can't because it's Covid. Like, it was just so much. I felt so alone. Yes, I was jammed in a tiny, dark, and very stuffy row house with my husband, my kid, and a handful of cats. Fuck. I just felt so alone and desperate and hopeless. And then I started a podcast. I'm not sure what I thought would happen with Clothes Horse, but I felt frustrated that people seemed to worship fashion when what happened behind the scenes wasn't cute at all. And I just wanted people to know that. In mid March, when I still had a job, we were told to cancel everything we had on order, whether it was actively being sewn right then or already at the port here in the United States, ready to head for the warehouse. Vendors and sales reps cried when I spoke with them. It was brutal. They lost their jobs. They lost their businesses. I knew the effects of these cancellations would ripple all the way to the bottom of the supply chain, meaning factory workers would not be paid and might even lose their jobs. It was. It was sickening. It felt so wrong to me because this company, my employer, had the money to pay for these orders, but refused to do so. When I was furloughed a few weeks later, I felt a very complex set of emotions. On one hand, we were about to experience a lot of financial trouble. On the other hand, I didn't have to go to that horrible place again. And I knew I didn't have to be complicit in general shittiness anymore. I could live with myself. And I knew, even though I was on furlough at first, that I would never go back to that office to work again. By July, when I was invited back to the creepily silent office, which was full of dead desk plants that had finally just given up after months of neglect, creepily quiet because everyone was doing remote work, everyone who still had a job, I was there. Invited back there to that office to clean out my desk while a loss prevention employee watched me do it. And I felt sad, like I had failed because they hadn't wanted to keep me. I felt relieved because I didn't have to be a part of it anymore. And I felt angry because this company had just fucked my family. You know, my career was Effectively over in my mind at that point. But on the other hand, I was free. What a strange place to be, right? I had hated that job. I'm going to tell you. I had been interviewing for other jobs and had been hoping to get out of there. I couldn't go until I had another job lined up, right? And it was going to mean another move for my family. All this other stuff, no big deal, right? But I just knew I couldn't do it anymore. I just hated the way the company and many of its leaders operated with just such casual cruelty every single day. My friends, this is the place I worked, where my manager told me that I would be more successful in my career if I cared less about the people who worked for me. And let me tell you, that is par for the course for that company and many, many companies, right? It's not just this one, but it wasn't the right place for me. A person who really does care about the people I work with and who work for me and are around me and who I might never even meet or talk to, right? I care about them all. Not the right fit for me to be in a place that encourages me not to. So I clean my desk out.
- [12:52]
Janine
You know, this.
- [12:53]
Amanda
This era of my life is over. Kind of against my will, but fine. And I had this thought, like, that my career is over, right? Like I'm. I'm at that point where there are no other jobs at this level. They're very few and far between, and they certainly won't be existing until this pandemic is over, whenever that might be. And I was kind of like, okay, well, I've got nothing to lose now, right? I can be real about what's happening in all these companies. And I wanted people to know what I, and so many other rad people I had worked with over my career knew about the industry and just how fucked up, unethical, and very uncute it all was. I didn't even know anything about making a podcast. I had to do a lot of Googling to figure out how podcast hosting worked. I sold a bunch of clothes on Poshmark to make enough money to cover a year of hosting fees for the show. Dustin showed me how to edit. He loaned me his best microphone. He made me re record things that sounded bad, sometimes two, three, four times. But I'm glad he pushed me to do things right, because I think things sounding good made people more willing to listen and open themselves up to what I was saying. And I was, and I am so lucky to have met so many incredible people throughout my career, so who were excited to spend some time talking with me for the show, sharing their experiences with all of you. And all of this in the early days happened at the desk I had pushed into our bedroom In Philadelphia, about 2ft from the foot of our bed. I spent hours sweating with closed windows and no fan or air conditioner because.
- [14:40]
Janine
That affects audio quality.
- [14:42]
Amanda
Just sweating my butt off, literally recording these epic conversations. Mo, he sat on my lap as I edited the first series of episodes, occasionally ramming his bony little head into my arm, like right above my elbow just to remind me that he was there. And I still. Sometimes I'll just sit quietly and think about those moments of holding him while I was doing that work and hugging him occasionally and how it would instantly make him purr. And he. He was so old and so unwell. And I'm grateful that I had those moments where we just were sitting together. I think it made us both feel a lot better. That was five years ago and I'm still doing it, which blows my mind. Five years is a long time, and I've been through so many changes in my life in the past five years. About six episodes into clothes, Horse Mo died. It was traumatic and so painful, and I still. I still cry about it sometimes. We moved out of the city to bird in hand in Lancaster County, AKA Amish Country. We lived there for a while there Hutch and Janet joined the family. Later we moved to Austin. Two years later, we moved back to Lancaster County. That's where we are now. So, yeah, multiple cross country moves. A little bit of a career change. Now I make my actual living as a consultant for a variety of small brands and businesses, making all kinds of things, from clothes to accessories to food. And they're all trying to do things in a better way. And I help them with product planning and financial stuff and data analysis, even marketing. I take all the skills that I learned working in fast fashion, like strategy and finance, and I help them make better decisions. And one of my clients just bought a house in San Francisco, which makes me feel really proud of the work we've done together to get them to a point where they could do that. I also teach classes for an organization called Nest for a Makers Fund cohort that they run twice a year. I work with a variety of makers and their small businesses and teach them what I know. And I wouldn't have that job, which brings so much joy into my life if it weren't for Danny of Picnic Wear, who now works for Nest and who introduced us and who I only know thanks to Clotheshores. You know, amazing, amazing how how this journey has changed thanks to deciding to start a podcast back in 2020. Along those five years, my life and my heart has just like grown and grown. I've met so many people who never would have crossed my path without Clotheshorse, and these people became real, actual friends. I very publicly announced via Clotheshorse that I am non binary and I have bipolar disorder. And those are two things that have gnawed away at me my adult life because I was afraid people would judge me, not like me anymore, want to throw me away. I learned that my voice mattered. After a lifetime of being told that I should just be quiet and act dumb, that it was okay to be smart and loud. That's what I learned from Clothes Horse. For the first time, I have to say, I feel as if I have purpose beyond just work. Yeah, there have been very difficult times working on Clothes Horse. I don't want to rehash them all here. You know, some of them. Some of them you'll hopefully never hear about. I'll tell you, the Internet is a cruel place. And over the years, I have received DMs, comments and emails containing every variety of vocabulary one can use to make another person feel terrible. That stuff sucks. I think words are really powerful. That stuff really does hurt. But it is far, far overshadowed by the good things that have happened. The nice messages and comments I receive, the cool stuff that I've been able to do thanks to working on Clothes Horse. Let's see, I met a bunch of you at the Clothes Horse Jamboree last year. I traveled to Tempe, Arizona to speak at Eco Fashion Week. I gave a presentation in front of an audience in Berlin. I've hosted library talks around the United States and a few workshops on my own. I've lobbied at the New York State CA capital. I went to the UN in May. Not too shabby for a childhood cancer survivor who grew up poor in rural Pennsylvania. I'm. I'm pretty proud of what I've been able to do, and hopefully we'll be able to continue to do. And all of these cool things happened because. Because of this work. I've also learned so much alongside all of you over the years, and it ranges from the details of what EPR is to the reality of the global secondhand clothing trade, to how polyester is made. Heck, I learned how to use Photoshop in the midst of all this. And for a person who loves learning, constantly having a reason to sit down and do some more reading and learn new stuff. That's a tremendous gift. So, yeah, my life changed a lot over five years. I'm sure yours has too. But what about the world as a whole? Well, it's a mixture of good and bad things. Like life right in the world of things. Clothes horse covered in the beginning, some major wins. In episode two of the podcast, we discussed the payout movement, essentially the campaign to get companies to pay for all of those orders that they canceled at the beginning of the pandemic, including, you know, I had to do that at my job. And a lot of brands, they did in fact pay up after. After being pressured by all of us to do so. Of course, my previous employer, urbn, which includes Nuuly, where I was working then, and Urban Outfitters, Anthropology, Free People and Terrain also beholden. They never paid. It doesn't surprise me. They get away with it somehow. And to be honest, that's one more reason why I would really prefer if none of you ever gave that company any of your money. Just saying. Episode four of clotheshorse explored the reality of clothing production in the United States, including the unethical working conditions for many garment workers in LA. And on January 1, 2022, the California garment Worker Protection act went into effect in California, making piece rate pay structures illegal. Now, piece rate is when a worker gets paid by the piece sewed rather than the time worked. And investigations into the state of garment work in LA at that point were finding that people were making less than $2 an hour to sew based on this piece rate. So the California Garment Worker Protection act ended that. And now garment workers must be paid at least, at least the minimum wage, which is, I know, not a living wage, but still a massive improvement. And also this is really important. Brands and factories are now both jointly liable for ensuring that workers are paid correctly. Because, and this is stuff we've talked about here on clothes force many times, is that whether explicitly or not, brands and retailers are complicit in the abuse of garment workers and wage theft of garment workers because they demand prices that can only be achieved via wage theft and inhumane working conditions. And it's great that there is a policy in place in California that holds them responsible as well. Now, of course, a lot of those companies have now pulled their production out of California and taken it overseas. And that's a whole other ball of wax. But this is still, this is a win. And now you can buy clothes that are made in the USA and know that they are maybe not made in horrible Working conditions, dangerous working conditions with people who are experiencing, you know, getting paid less than $2 an hour. It's still not completely fixed. There's still sketchy stuff happening. But it's a huge leap forward and it would not have happened without a lot of people working together to do it. Also on the legislative front, the Responsible Textile Recovery act was passed in California in 2024, mandating that textile and apparel producers establish a system for collecting, repairing and recycling their products. That's also known as extended producer responsibility. Epr, something we've talked about a lot here too. Would love to see this legislation spread across the United States. And I do want to just take.
- [23:59]
Janine
A moment here to say that, you.
- [24:01]
Amanda
Know, people ask me this, do I think there can be federal legislation passed here in the United States to end fast fashion, things like the Garment Worker Protection act, things like the Responsible Textile Recovery act, things like the Fashion act that I have been working on. And I'm just going to tell you, and you know, I'm a very optimistic person. I do not believe so anytime soon. There is no way that kind of legislation is going to pass during this administration. But the good news is if we pass it in large states like California, like New York, it changes the landscape for the world because those two states have such huge economies. And if they can get more states on board with passing that policy and it, it will just sweep the nation, even for states who don't care about that kind of stuff. So this is a good thing. And to me, state legislation of this kind of stuff is the future, at least here in the United States. And of course, along the lines of all that, I've been working with a coalition of activists and lobbyists for a couple of years now to pass the Fashion act in California and New York. And I really think that's going to happen next year, which will be huge. On the other hand, it hasn't all been great. And I'm not going to get into all the darkest, worst news of the world outside of fashion. We know what that is. We're all bearing the grief of that every day.
- [25:21]
Janine
Right.
- [25:23]
Amanda
Shein kind of blew up in 2020. Right. We barely really talked about Shein before that. And it was thanks to actually all of those retailers canceling their orders and making Shein low key the only place to shop for people who are at home and. And bored and had money to spend. And while the end of the de minimis loophole, which by the way, knew nothing of the de minimis loophole prior to clothes Horse. So thanks for sending me on a rabbit hole of customs and duty research over the years. I'm not saying I'm an expert, but I know a lot about it thanks to Clotheshorse. Earlier this year, the de minimis loophole was ended here in the United States, along with Trump's stupid tariffs. Those two things actually have been a major blow to Shein, but at the same time, it's now shifting its focus to growing in Asia and Latin America. So I'm sure we'll be talking about Shein for years to come. And oh yeah, Temu, like barely existed in 2020 and now they have super bowl commercials. So yes, we've made progress. Yes, there have also been some setbacks, but I see the results of collective action and I feel so optimistic about what we can do next. We'll talk about that more later. Anyway, that all of that, that's just the tip of the iceberg of world changes over the past five years. And when I was thinking about what I wanted to do to commemorate five years of Clothes Horse, because this is a really big deal to me, I just couldn't decide. A clip show of greatest moments would be an epic amount of work and really like, no one really likes a clip show, right? A summary of the last five years would really turn into like a 10 hour miniseries and it would be antiquated by the time those 10 hours were up because things are changing so fast. Then I just realized, you know what, I just wanted to go back to the beginning, because when people ask me where they should start, clotheshorse, I always say episode one. Listen to at least the first four episodes because it will help you understand why and how everything else has happened. And I stand by that. I'm so grateful that Janine spent hours talking with me for the first two episodes and then came back for a few more episodes, which you should listen to those too. And she did that because she believed so strongly in what I was doing. Sure, I had no experience as a podcaster and there was no telling if anyone would ever listen, but Janine and all of my early guests, they really wanted all of you to know how the industry really works. So if you've never listened to the first episode of Clotheshorse, I want you to listen to it today. It's going to follow this introduction. This episode explains the cost of the things we buy, including the obvious elements, you know, like fabric and sewing and the sneakier things like freight and duties. And most of this remains the same in 2025. The major thing that has changed at least for American companies and customers is tariffs. Now, tariffs and duties aren't exactly synonyms. It's more like tariff refers to a specific import tax, while duties are more broadly all of the import taxes. Now, I've received a lot of emails and DMS this year requesting an episode about tariffs, and I haven't created one because it will be antiquated and out of date as fast as it is released. Because the tariff policy here in the United States has been a moving target all year. Constant, constant changes and confusion. And frankly, I have spent so much time and emotional energy this year helping my clients navigate these constant changes, from spreadsheets and pricing and more analytical things like that to literally, well, okay, maybe virtually holding hands and reassuring very frightened people that their business will get through this. I've spent so much of that time and energy on tariffs that I just don't want to talk about it anymore. I'm kind of burned out on it, even though I kind of have no choice but to continue not being burned out on it. I've also seen a lot of conversation about these tariffs fixing fast fashion, and I don't think that's true either. More like coping, I think. So here I'm going to give you a little rundown about tariffs. Okay? Are you ready? I do not think that Trump's tariffs will fix fast fashion. In fact, I think that if the tariffs continue the way they are, we will see some very bad things happen. One is that the human exploitation currently involved in manufacturing cheap folks profitable products like fast fashion, but not limited to fast fashion, will only get worse. Two, the quality of everything we buy, which is already pretty terrible, will continue to get worse. And three, small businesses who do their best to do things ethically, whether it is overseas or here in the United States, will struggle to stay afloat, paving the way for low quality fast fashion as our only option. That's depressing, right? To understand why I don't think fast fashion will be fixed by these tariffs, you have to know three important facts, which if you're a longtime Clothes Horse listener, you already know. But let's just pretend you're not. Let's just reiterate them, okay? One is that humans make your clothes, not robots. All clothes are made by human hands, even if they are using sewing machines and other equipment to make it happen. So when we talk about clothing, we are talking about an industry that has major human impact. So many people are employed by the apparel industry. Two, manufacturing overseas does not always equal unethical, and there are great brands in the slow fashion world that do use factories where the workers are paid a living wage and work in safe, good conditions overseas. However, many large brands and companies are using factories where workers are paid very little and work in unsafe conditions. And number three, which we talk about in this episode, brands don't really own their factories. They contract with factories to do their manufacturing. And so that means, yes, the same factory might be making stuff for Shein one week, Kohl's the next week, and free people the following week. This is not shocking to anyone who works in the fashion industry, but I know it has been quite shocking to many people on social media this year alone as they learn about tariffs. Everything we buy brand new, no matter where we live, is the result of a product development process. Designs are created, samples are made, and the design is changed and revised until it can hit the predetermined cost for manufacturing that item. The predetermined cost, which we talk a lot about in this episode and many, many episodes of Closed Source in the last five years, is dictated by that company's profitability plan. And buyers are given targets that they must hit in terms of costing and profit margin. So design, buying and production work hard to hit those targets. Materials are changed, details are removed, and the factory is pressed for lower and lower pricing. If the factory says no, then the company will take that order elsewhere and maybe never come back. So the factories usually accommodate these requests for lower and lower prices at the expense of the factory workers who will be paid less and worked faster to hit those targets. Or maybe the factory will outsource to another factory that doesn't mind paying its workers even less. Regardless, factories and the people making the stuff we buy have little power to say no.
- [34:05]
Janine
You know, I was having a conversation.
- [34:07]
Amanda
Recently with a friend of the pod, Rachel Greenlee, who's been on the show in the past to talk about her experiences working in a large corporate company that is known for not being very good. That's all we'll say about the name of that company. But anyway, Rachel is a writer and we had a little phone chat recently about a piece she's working on, you know, about the impact of tariffs on fast fashion. And Rachel asked me as we were talking about this, she said, like, are you pro or anti globalization? Globalization basically meaning the interdependence of the world's countries and economies and cultures and people on one another. And, you know, when people talk about globalization, they tend to talk about the economic side of it, global trade, having your stuff manufactured overseas but imported into your country to sell there they talk about that. But, you know, ultimately, yes, I am pro globalization, because this planet all shares the same fate, right? We need to take care of one another. Right? We need to collaborate together to care for one another. And unfortunately, a lot of globalization at this point has been more extractive than say, like, supportive or community driven. It has been larger economies like the United States going to other countries, building factories, intentionally creating jobs that are very low paying and therefore drive massive profits back in that company's home country. Right? So very extractive, not at all collaborative. Certainly this is what colonialism is. And I told her, you know, I am pro globalization, as I just said to all of you, but not the way it's happening right now. And nowhere do you see more clearly the negative impact of globalization as it's been happening for the past decades, past century. I guess you don't see it any more clearly than you see it by looking at fast fashion and how it works.
- [36:15]
Janine
Right.
- [36:16]
Amanda
You know, people overseas are paid very little to produce clothing that drives massive profits for companies in other countries. But then also the waste from all of that becomes someone else's problems, perhaps in a third country. Right? A third country where the profit is not driven. And I, I hate it. I hate it so much. There's just no real collaboration or partnership in the relationships between these companies and factories. By now, I hope you know that tariffs are not paid by the country where a product was made. Please, please tell me that you understand that. Because I saw Trump saying otherwise once.
- [37:00]
Janine
Again, even this morning, and I'm like, who believes that at this point?
- [37:04]
Amanda
Rather, the tariffs are paid by the company importing the product into the country. So let's just say Target placed a huge order of T shirts that were made in China, in addition to paying for the production of those shirts, along with the fabric, the printing, and everything else that we talked about in this episode, Target is going to pay the cost to ship it across the ocean to the United States, and it's going to pay the duties and AKA the tariffs to import that shipment of T shirts into the United States. And to be clear, before Trump's tariff policy, companies were already paying duties on everything they imported into the United States. Individuals may not have been, thanks to the de minimis loophole, which we talked about before, but basically every package with a value under $800 came into the United States duty free, which allowed Temu and Shein and many dropshippers on Etsy and Amazon to thrive, especially in the past few years as people became more comfortable with ordering. So called factory direct from China. So companies were already paying duties. These tariffs are in addition to the duties that companies were already paying. And I want to be clear, they are egregious. They are a major, major cost for these companies. I see people periodically like say on Reddit saying like, hey, I ordered something from Lazy Oaf and It was a $200 order and then I got a duties bill for $60. I don't understand. Yeah, $60 sounds about right to me with these new tariffs, which means that like imagine if Lazy Oaf had been able to cover that $60 for you, you still would have been paying at minimum then $260 for that $200 order. Your prices are going up. Someone has to pay for these tariffs.
- [39:08]
Janine
Because they're very high.
- [39:10]
Amanda
As tariffs increase a company like say Target going back to their T shirt.
- [39:15]
Janine
Shipment.
- [39:17]
Amanda
The company has a few options for making the math math. One is to take a hit in profitability due to the tariffs. Very unlikely, especially when shareholders are involved. But once again, these tariffs are so high they can't really absorb it. They could increase prices for customers, which is possible, but then again, we are addicted to cheap clothes. I do think we're going to see some price changes. And on the Target subreddit, I'll just tell you, people post photos of the price changes they're doing in stores. We're talking about Suddenly like a $15 lol surprise toy suddenly being $30. Like the prices changes are happening right now. The last thing that a company can do is decrease the cost of making say those T shirts that Target's importing, make that product cheaper in other ways, lowering the cost of making that item benefits the company's math in two ways. One is that if it costs less to make, then it has a lower duty in the first place because it has a lower value. But more importantly and really more impactfully, lowering the cost of making that item makes it easier to charge the same retail price or pretty close to it and absorb the the cost of that tariff into it. They can use lower quality fabrics, maybe make each tee just a little shorter and narrower to cut fabric costs. They could squeeze the factory on pricing, asking them to accommodate the higher cost of tariffs. They'll probably say like, hey, do you want to partner on these tariffs? Which of course means workers are going to be paid less, right? And I want to be clear that all of my friends who still work in buying and production for big companies are actively right now at this moment doing all of these things all at once, not because they're bad people, but because they need to keep their jobs and they are just as scared and stressed out as all of us. If factories say no, I will not, quote, partner with you on absorbing these tariffs. I will not give you lower pricing. Companies will move to other factories that say yes, or to other countries with a lower minimum wage or less regulation of working conditions or perhaps even a lower tariff rate. Some governments are going to be willing to look the other way on workers rights and wage theft just to have that manufacturing money flowing into their countries. So here we see more of this sort of predatory extractive globalization taking place. Right. Basically, if we don't see retailers increasing.
- [42:01]
Janine
Their prices a lot in the time.
- [42:03]
Amanda
Of tariffs, then that means that they are probably selling us lower quality products and, or probably both. There's nowhere at this point really squeezing factories and workers on costs. It may also mean that retailers are laying off people to accommodate the expense of those tariffs. No matter what. As we know, none of these companies is going to accept lower profits. Well, the other pushback I hear to the tariffs is like, well, couldn't companies just move production to the United States and then everything will be great? Yeah, we'll really be making America great then, won't we? Because no, actually no. Fast fashion is never bringing clothing production back to the United States in a significant way. And we all need to accept it. Okay, For a while, companies like Urban Outfitters, Anthropologie and Fashion Nova were doing some production in LA until they were busted for wage theft and other ethical and legal issues around pay and working conditions. When you want to sell things with an 80% markup and not charge $100 for a T shirt, domestic manufacturing is not an option. For clothing manufacturing to return to the U.S. brands need to get comfortable with a lower profit margin and customers have to get comfortable with paying higher prices. And to be clear, I know the cost of making clothing in the United States because all of my clients manufacture here. And yes, their prices are much higher than what you are paying to go to Target or Shein or the Urban Outfitter sales section or Kohl's. You name it, the prices are much higher. And at the end of the day, there's not much money left when all the business expenses are covered despite those higher prices. Which brings me back to my last point. Take a look at the clothes you're wearing. Make a list of the ingredients of them. Fabric, zipper buttons, grommets, thread, brand labels, screen, printing, ink. Most likely, none of those elements of your clothing were made here in the United States. Although I do have one client who gets all their zippers and grommets and buttons made here in the us but that is very rare. And that means that no matter what, even if clothing is made here in the United States and as ethically and responsibly as possible, we still rely on other countries to produce the components. So those tariffs will have a major impact on clothing cost no matter what. And once again, I'm worried that those cost increases will destroy small businesses who are working hard to create ethical, high quality, size inclusive clothing. Because if the fabric you're buying was $10 a yard before, and that included the duties and the freight for it, now it's $15 a yard. And yes, that $5, that makes an impact. If you're making a shirt and it takes like two yards of fabric right there, the fabric cost went from $20 to $30. That's just that. Imagine dress. Imagine all the other components being more expensive as well. We're talking about some significant price changes. So yeah, I don't believe that tariffs will fix fast fashion. I do believe that Americans will stop buying so much from Shein and Temu if they have to pay duties for it or these companies have to raise prices to absorb the duties. But if everyone out there is raising their prices due to the tariffs, then maybe Shein and Temu remain the most affordable options with their unrealistically low prices and then they continue to thrive. I just don't know. But sometimes I think people being like, well at least the tariffs, they're gonna end fast. Fashion is one, a coping mechanism as I mentioned, but two a way to be like, okay, so our work is done here. We don't have to worry about fast fashion anymore. And I'm here to tell you the work continues. We cannot give up. We cannot quit, even when it feels really, really hard. I'm writing and recording this intro on July 4, 2025 and wow, it is really hard to feel okay today. My social media feed on every platform is filled with panic and doom, resignation and lots of claims that we are cooked. Right now, I'm working on a series of episodes about our relationships with brands. That will be the next series of episodes to come your way this month. And to prep for this, I am reading so many books as part of my research. Once again grateful that speed reading is my superpower. I'm reading about marketing, iconic brands, even cults. And one term I've been reading a lot about this week, specifically is and thinking about a lot too is Something called a thought terminating cliche. So what is a thought terminating cliche? Well, it is a phrase used to shut down critical thinking, debate or further discussion by offering a simplistic, often trite cliche response to a complex issue. Basically designed, sometimes intentionally, sometimes not intentionally, to end a conversation. Like, for example, things happen for a reason. When I lost my job at the beginning of the pandemic and I felt so freaked out, the level of fear and grief was, it's, trust me, overwhelming. People would say to me, well, things happen for a reason. So this will lead to something else. And saying something like things happen for a reason is really something you say to shut down the conversation rather than pursue, like conversations about how the unemployment system is broken, conversations about how difficult it is to find a job, conversations about income inequality and rent and all these other things. Right. It's just like we're ending this conversation. We're moving on to something more pleasant. It is what it is. That's something that my mom liked to throw out after telling me something really fucked up. So. And often related to her job, where I would be like, yeah, but that's not okay for XYZ reasons. That this happened to this worker or you or whatever it is, what it is is sort of like, that's the end of this conversation. We're not going to think about it or talk about it further. Right? Trust the process. I feel like that's something that like MLMs and like CrossFit gyms and I don't know, like CEOs of startups say. And I laugh at it, but it is meant to say, like any disbelief or questioning you have about what I'm saying, we're going to do or is going to happen, just knock it off. Right? You have to trust the process. No deep thinking. And Dustin and I actually say trust the process as a joke, specifically about something that we did in our yard this year, which is plant all these wildflower seeds, local native wildflower seeds, around this, like, jungle gym that is a little dilapidated in our yard. We just planted all these wildflower seeds around it. And we always are saying, trust the process. It just looks like overgrown weeds right now, but some flowers are going to appear. And every time I walk by there and have the urge to whip out the lawnmower, I'm reminded to trust the process of these wildflower seeds. We did it for the butterflies and the pollinating insects, in case you were wondering. So there's one case where maybe trusting the process is. Okay, how about both parties are the same which is a great way to shut down conversations about how voting works and how the system works and how voting is sometimes like all about harm reduction and so much more.
- [50:13]
Janine
Right?
- [50:15]
Amanda
Here's a banger of a thought terminating cliche that I've done a whole episode about, which is there's no ethical consumption under capitalism, which is basically like it's too hard to think about how I could make more ethical choices, how we could shift things. Let's just end the conversation here and go place an order for a Keurig or some Shein clothes. Right? And of course, when people are on social media saying, we're doomed, we're cooked, there'll never be another election again, we're all gonna die. It was nice knowing you, I'm leaving the country. Whatever, whatever. Those are also thought terminating cliches because what they're saying is, I don't want to think about the work and maybe the sacrifice, the discomfort that I'm going to have to experience to make change in this very challenging time. So instead I'm going to just throw out my hands and say, we're doomed. Hopefully you'll agree and then we'll never have to talk about this subject again. Right? Basically, it's like, here's a complex upsetting thing and I just don't want to talk about it. The problem with these thought terminating cliches is that, well, they are very effective at ending the conversation, of getting us to move on to another subject, of preventing any real positive change from happening. Because real change begins with difficult conversations, difficult questions, maybe unanswerable questions, along with some really ugly truths. I do not think that we are doomed. I do not think we are cooked. I'm going to be honest with all of you. My mental health has been hanging on by a thread this year. Just nonstop anxiety and fear about what is going to happen next. Along with my own personal difficult shit. There are days when I am just like, how am I expected to get up and function today and feed the cats and do my job and take a shower and mop the kitchen and take out the trash and weed the garden, whatever else people want and need from me today it has been really hard. I'm sure you feel the same way. The thing is like, progress will never be linear and maybe not even hyper visible while we're making it happen. Four steps forward are often followed by at least one step back. There will be good times, there will be bad times, and neither will last forever. And guess what? We have made positive steps forward on all kinds of terrible things in the past five years, even for all of the horrible stuff that is still happening or began happening. If you know me, irl, or have been following me for a long time, you know I've been through some very difficult times. I just told you about some of them. And what I have learned along the way is that the only way out of darkness is through it. And the good news about the darkness we are collectively experiencing right now is we don't have to get through it alone. We have one another. We can share a flashlight, and we can take turns guiding and reassuring one another. We can get through it together. We can hold hands when it gets really scary. You know, I've told you before, I am not a spiritual person, but I have found hope, faith, and meaning in the people around me. I have found exponentially more hope, faith, and meaning in the last five years of making clothes horse. In our ability to build and create and innovate in the unmatchable power we have when we all work together toward a common purpose. I believe that truly terrible people are a very small minority, far outnumbered by people who just want everyone to be safe, healthy, and happy. And I will tell you where I truly learned that, truly began to believe that is in the last five years. I do believe that the good people ultimately win. And I believe that we can build the world we want, but only if we do it together. I believe in us. I don't think I could have said that five years ago when I felt so alone and sick with worry. Doing this work has opened me up to hope and joy and faith. So thank you for letting me be Clotheshorse for the last five years. You have changed my life, and I'm so grateful for that.
- [55:20]
Janine
Hi, I'm Amanda. I'm your annoying co worker that won't eat a chick Fil A because they support anti LGBTQ organizations. And yeah, I know they allegedly don't do that anymore, but who wants to support a company whose leadership is so homophobic and transphobic that they would still make a big deal of donating to these organizations in the first place? I am also your annoying co worker that won't take a Soul cycle class because that company is such a huge supporter of Trump that I may as well just donate directly to his campaign. Why am I so annoying? Because I believe that in a capitalist society, Hint, we're living in one right now. Our money is as powerful as our vote. When we buy things from brands that make the world a worse place, we are casting a vote in favor of the bad things they are doing, whether it's exploiting marginalized people, creating a culture of fatphobia and racism, or just plain supporting the orange bigot in the White House. When we withhold our money and give it to brands that are doing good things, we not only force the bad companies to rethink their practices, we also help good brands grow their businesses, making ethical practices the standard rather than the exception. That said, it's hard to know where to cast your vote in the world of fashion. The industry is veiled in layers upon layers of mystery and there's so much spin. Inclusive, Sustainable, Ethical conscious, Eco friendly. What do these terms even mean? Do they mean anything? Are they just marketing messages? I'm going to be honest with you. I've been on furlough from my job for more than three months thanks to the coronavirus pandemic. And while I've spent most of my time worrying about my family's future and fretting about money and worrying about all the other things that all of you are worrying about, I have also found myself becoming more and more engaged with Reddit. There I found a sense of community. This is not a commercial for Reddit, by the way. I often find myself answering questions about all kinds of fashion related issues, from inclusive sizing to influencer collab lines to why do you think this brand went out of business? And it feels so good to share my experience. As I've been doing this, I realized if you don't work in the industry, nothing about it makes sense. My mission with Clotheshorse is simple to educate all of you about the fashion and retail industries. By revealing the complex machine underneath the spectacle of trends and buzzwords, you can make better decisions about where to cast your vote. By now you probably want to know why I'm declaring myself the expert in this area. I've been working in the fashion and retail industry for the majority of my adult life. I began as a part time seasonal sales associate for a large retail chain. My first day at work was my birthday and I stood under an air conditioning vent for 10 hours folding t shirts. From there, I moved into buying as the first person to be moved from the stores to the home office in more than a decade. To be honest, I didn't even know that buying was a job. I assumed I would spend my days smoking cigarettes and looking at fashion magazines. Sounds pretty cool, right? In reality, it's lots of spreadsheets, applied mathematics and critical thinking with a splash of shopping. A little tiny splash of shopping. And since then, I've worked for large Corporations, buzzy startups, and you know, like some medium sized e commerce brands. Along the way, I've met so many incredible, intelligent women that I am honored to call my friends. They will be jumping in to discuss their areas of expertise and share their insights on fashion, style and spending your money the right way. In our inaugural episode, we will be starting at the beginning, or what I think of as the beginning. Not promising that we will be answering life's biggest questions because tbh, I'm not even sure what they are. But we will be diving into the cost of the things you buy. Mostly the literal cost with a dash of figurative cost. Our special guest is Janine. She brings a ton of experience in the area of merchandise planning to the table. Don't worry, we'll explain what that means and this is just what we are going to need as we untangle all of the factors that explain why we pay what we pay for what we buy. Try saying that five times fast. Are you ready? Let's get started. I'm really excited today for our first episode and our very first guest to have Janine here to tell us a little bit about the cost of the things we're buying. Like what's happening there? Right. So, Janine, I've known you since way back in the day when I worked at ModCloth and we were sort of like long distance friends because you were in San Francisco and I was in la, but I still thought you were pretty awesome. So why don't you tell us a little bit about your background and you know, like what you do.
- [60:39]
C
Yeah, so I have worked in the retail and fashion industry for about 10 years, a little bit more. I started out my career at Banana Republic and then I moved on to ModCloth. So I have experience working in larger corporations as well as what it's like to be in a smaller startup. And I've definitely seen a lot during my years across both of those companies. And during that time I really worked primarily in merchandise planning, which is the function that manages inventory and profitability.
- [61:12]
Janine
So I'm going to tell you right now that most people do not know what a planner is, much less that that job exists at all. So why don't you tell us a little bit of what a planner is?
- [61:21]
C
Yeah, I did not know that this job existed actually before I applied for it. My background originally was in finance and accounting and I just wanted to use those skills and work in fashion. So I just started browsing jobs at the Gap that I thought had some type of financial function to them. And I found this job. So I definitely didn't know what it was before I started working in this capacity either. So a planner is actually similar to what people think of as. As being a buyer. I sometimes tell people it's like the number side or the finance side of being a buyer. In a lot of fashion and retail companies, there is a role that is a buyer, and that person sources inventory and product and then buys it. But in a lot of other companies, they also split that job into two functions, where someone's just in charge of sourcing the styles and esthetically figuring out what we should buy. And then there's a financial component and an inventory component, which is the merchandise planner that figures out how much to buy and then maximizes the profitability of that inventory. So merchandise planning is really managing the movement and profitability of inventory from when that very first PO is placed until it goes on markdown or sells out. And the main objective of the job is just to try to maximize the profit that's made off of the inventory that the company owns, while also minimizing the risk of owning too much of something that nobody wants to buy, which invariably always happens.
- [63:03]
Janine
Oh, yeah. Oh, yeah. I mean, you're not. You don't pick 100% the right product. 100% of the time.
- [63:09]
C
It is 100%.
- [63:10]
Janine
It's sort of like educated gambling, I guess. I would add, from my perspective as a career buyer, that I always tell people the best advice I can give them is that your planner should be your best friend and you should be collaborating rather than arguing. So, you know, we're like peanut butter and chocolate, you know, better together.
- [63:32]
C
And I would definitely say that I have been really lucky in my relationships over the years to have had super, amazing, collaborative, wonderful, like, arguably loving relationships with the merchandisers or buyers that I've worked with. But oftentimes it can also be a little contentious. And there's meant to be push and pull because the buying side is typically always like, buy everything, buy more at the highest cost ever. Who cares? Whatever, money doesn't matter. And the planner is always like, we have a budget. We have a margin to hit. You know, we need to make money. Do you really need 5,000 of that thing? You know, blah, blah, blah. So there's. There's definitely checks and balances, but that's kind of the nature of the beast.
- [64:23]
Janine
In a good way, in a. Yeah, that's a. It's a great push, pull relationship. And it's so essential. It's like the balance of powers there. So the question I hear most on social media are like, why is this so expensive? Why is this so cheap? Why is there such a wide spectrum of, say, how much a pair of jeans could cost? Like, why is just the pricing of clothes all over the place? So today we're going to dig into that. And actually now you understand why Janine's here because she is an expert and all things cost related. I love a fun fact, I think, fun fact. You know, it's a great way to, you know, to sort of set the context and have some fun. While the consumer price index, which is sort of the average price of all the things we buy, has risen by 70% since the 1990s, the price of apparel has actually decreased by 6%.
- [65:13]
C
Wow, that's. That's wild.
- [65:16]
Janine
It's pretty crazy. That's pretty crazy. So to put that in some context, if you're not as much of a nerd for economics as Janine and I are, in 1990, the average new car price, which is like a mid range, decent car, was about $15,000, which sounds so cheap and exciting. Meanwhile in 2020 that it's more like $26,000. So huge increase, but somehow your jeans actually cost a few dollars less than they did in 1990, which was 30 years ago. I mean, people, yeah, people are making more money now than they were in 1990, just from a purely like dollars and cents. Not talking about like cost of living increases. But it's, it's a disconnect.
- [66:00]
C
Yeah. Because I mean, for inflation alone, you would expect an increase in ticket price or an increase in like the, the number of dollars paid. And it's crazy to think that you're paying less.
- [66:16]
Janine
It's so crazy. So that's what we're going to dig into today. I guess just to start things off. We think we're paying a lot of money for clothes, but we're not. That's going to be the summary of us. We're going to tell you why, like why clothes are so cheap. So the first ingredient in any garment is going to be the fabric. Right. And you probably know this and maybe you don't, but nicer, more natural, sustainable fabrics are more expensive. And you couldn't see me because we're recording this, but I said sustainable in quotation marks because I have a lot of problems with that term. So every time I say that word, just assume it's in quotes. So whereas polyester blends are really cheap. So, Jeanine, I already know how you feel about polyester because we talked about this, but why don't you just lay it out for us?
- [67:01]
C
I say to my friends, whenever anybody talks about polyester is, if you're wearing polyester, you may as well be wearing, like, a plastic trash bag, because polyester is actually plastic. And actually, I was wearing. It was actually just a 5050 cotton poly blend t shirt today when I went out on a bike ride. And I wasn't going that fast. I wasn't going that far. And by the time I got home, I was sweating, and I just had to take it off because it's literally like wearing plastic. It. It literally is plastic. So I hate polyester. I slightly regret wearing, buying and wearing this, like, 50. I didn't really realize it was. I didn't really realize it was a 5050 blend until after I walked away. And to be fair, it was a T shirt I bought at a, like, a craft stand, so I couldn't return it. But, yeah, polyester is disgusting.
- [67:59]
Janine
It is disgusting. So I think when we think of clothing, we think of cotton, right? Like, that's always been the go to, like, natural fabric for the garment industry. But in 2011, prices reached their highest in 140 years. And why? Well, for one 2008, it was the financial crisis. So demand for clothing in general fell pretty substantially. People just didn't have the disposable income. So therefore, the demand for cotton was pretty low. There are three countries in the world that produce more most of our supply of cotton, China, India, and maybe you didn't know this, the United States. So not selling cotton because we're not selling clothes turns into a huge economic crisis for the farmers of the world. I mean, obviously, like the farmers of cotton. So in 2009, China and India decided they were going to help their farmers out. So they began to buy up local stock of cotton just to protect the farmers. So this artificially led to prices rising globally. The US Sort of Followed suit. That drove up the price of clothing immediately. Right. But then weather conditions led to a shortage of cotton in 2011, so prices went up even more. By the end of that year, the cost of cotton clothing increased by about 11%. And that doesn't sound like a lot of money, but designing and buying garments is all about pinching pennies. I mean, you know, it's all about like, can I. Can I take 25 cents off this cost? So what happened? How did retailers adjust to this? Well, they began shifting their assortments into synthetic fibers, AKA our good friend polyester. I mean, for one, they're a lot less expensive. To make. But even more important. And this is kind of the other reason we've been seeing polyester take over. After the financial crisis of 2008, customers had an increased appetite for what I like to call cheap and cheerful clothing. And this is when fast fashion really blew up. Think back to 2008. That was when Forever 21 became more ubiquitous. Everywhere you went, it's just. There's a Forever 21. There's a huge one. They're expanding. They're new. They're new. So at the time, retailers thought customers might not like these synthetics. But maybe in time, after realizing how crappy these fabrics are, or when they regained their financial situation, they would turn back to cottons and other natural fibers. But they were surprised to discover that customers did not care. They were like, this is great. This is even cheaper. It's really bright. It doesn't get wrinkly. I'm so sold.
- [70:34]
C
Yeah. And I can say anecdotally, when I. Back when I was at Banana Republic, during this time, I started working there in June of 2010, and I was there until August of 2013. So I was there, like, in the peak of this cotton crisis. And it was crazy. Everybody was like, how are we going to do this? What are we going to do? Like, how do we maintain our same margin? And we're going to talk about this a little bit later, but maintain the margin and profitability that I originally had on this garment when the cost has gone up. And the. A logical thing to do is to raise the price of that T shirt or that sock or pair of jeans or whatever to say, okay, well, it now cost US$15 to make this thing that it used to cost US$12 to make. So we'll just pass on that price increase to the customer. But as Amanda mentioned, like, in 2008, I mean, the idea of raising, like, prices to customers when you're still dealing with the fallout of the financial crisis was not an attractive option at all. Nobody wanted to raise prices. I mean, if anything, you were just like, that's just going to be death. Like, if I raise the price on this thing, just no one's going to buy it and blah, blah, blah. And so really, the only solution was to mix into synthetics and then hope for the best. And then I can also say, anecdotally, when I talk to all of my friends, when I ask people if they know the difference between a natural fiber and a synthetic fiber, I mean, it's comical. Nobody knows the difference. And so the customer is not also really informed. Even if they were to look at the fiber content on the tag and it says polyester versus viscose versus cotton. I saw one the other day. That was Tencel. I don't even know what Tencel is. There's always things on there that the customer, even if they are maybe a more informed customer, it's hard to even know what they are.
- [72:44]
Janine
Yeah, no, absolutely. I will say Tencel does come from cellulose, but it's also really bad for the environment in a different way because so many trees must be grown and then cut down and there's a lot of processing in between. It's just as problematic. It's. It's not made of plastic, but it's pretty, pretty rough. Polyester itself and synthetics, as Jenny mentioned, are plastic. They are derived from petrochemicals, generally a mixture of oil, water, coal, and air. They are non biodegradable. I mean, they may break down over several hundred or thousand years, but to me, that's non biodegradable for my purposes. So when they go to the landfill, they just stay there forever. Furthermore, and this is almost the scarier part, the production of synthetic fabric sheds microplastics into the water supply. And then even worse, every time the owner of a synthetic garment does a load of laundry, more microplastics are released into the water supply. I read somewhere recently that the average person eats a whole credit card size serving of microplastics in one year. From fish, from water, from agriculture. I mean, it's so gross and disturbing.
- [73:56]
C
That's so gross.
- [73:58]
Janine
So gross. It made my stomach sort of clench up when I said it out loud. So polyester is pretty depressing. And I think we're all agreeing, like, the more we hear about it, the less appealing it sounds. But I'm here to tell you that polyester accounts for 51% of textile production worldwide. So it's huge. And you might think that you don't own a lot of polyester clothing, because, you know when you think of polyester, you're thinking of like the 70s and like leisure suits, and it's really thick and it makes you sweaty and smelly. But the reality is that these synthetics sneak into our lives in a lot of different ways. So Lycra. Lycra is in swimwear and workout clothes. It's in some of your undergarments. Elastin is in any stretch jeans. Your jeggings are problem nylon in your tights and underwear. And as Janine mentioned, poly blend tees are ubiquitous. A Lot of people think they hold their shape better. They are a little less shrink proof, if you will.
- [74:53]
C
They're soft.
- [74:54]
Janine
They're soft.
- [74:54]
C
They're definitely soft.
- [74:55]
Janine
And they take color really well. Like you can see why they're so desirable. Like when you see them on the shelf, you're not disgusted, you know, but it's. It. There's plastic in there. A lot of those cozy synthetic fleeces are also hella synthetic. And my favorite synthetic is vegan leather, AKA same polyurethane leather, which is completely oil basically with some other like razzmatazz thrown in and will melt possibly if exposed to flame. But also, you know, the most inexpensive chiffon clothing is also polyester. And a lot of sweaters now are a mixture of some sort of natural fiber like wool and then an acrylic blend. Acrylic, also plastic.
- [75:42]
C
Yeah, acrylic is definitely plastic. Acrylic. Like acrylic nails. That is the same. That is the same acrylic.
- [75:49]
Janine
Yeah. That's so gross when you say it like that. It's right there. It's like, okay, so so far we have list of gross things we've talked about already. One is the eating a credit card worth of plastic and next to the acrylic nails in your sweater, which is like so visceral. So then you're like, okay, well, you know what, I'm just going to go buy some natural fabrics like cotton or bamboo. And they're nice because they're biodegradable. They aren't perfect because they tend to be grown using a lot of pesticides and a whole lot of water. So the organic versions are a lot more expensive. So we're already starting to talk about, okay, if you want something to be good, if you will, it's going to be a little bit more expensive.
- [76:33]
C
And the other natural fibers I feel like I think of are wool and silk. And I think people also naturally associate, naturally associate those, those fibers with higher price. Right. If you're getting something that has 100% wool, cashmere, alpaca, all of this stuff, silk, for sure, you just know it's going to be more expensive just because the way that it's produced drives a higher price.
- [77:03]
Janine
And if you do see cashmere or alpaca at a smoking hot price, there's. There's something going on there that's not good.
- [77:12]
C
Or it's a blend.
- [77:13]
Janine
Yeah, exactly. Read your tags.
- [77:16]
C
They can say, I forget what the. I even remember this from Banana Republic. We had these socks that were like, we called them cashmere Blend. And I think. I think you only had to have 15% cashmere.
- [77:28]
Janine
Wow, that's like nothing cashmere in it.
- [77:32]
C
In order to call it cashmere blend. Who knows what else it was mixed with? Actually, cotton and wool. But regardless, still. Still not cash. Like, not. It's not 100% cashmere.
- [77:44]
Janine
Yeah, I'm far from it. You know, I always. I don't know. This is something I've done my whole life, but I always think about percentages in terms of how I would feel about them as a grade in school. So when I hear 15%, I'm like, you failed. You failed. This is a bad scene. And now you're gonna have to explain this to your mom, and you're definitely gonna get grounded. So there you go. I hear 15%, and I'm panicked. So, okay, so that's the fabric, right? And don't forget that it also has to be dyed. You know, and often, especially when we're dealing with these synthetics that are, as we've noted, plastic, they need to be washed in chemicals to improve the feel of the fabric. And so both of these actions can be incredibly toxic and polluting. They use up a ton of water, and they add cost into your garment. So just another thing to think about next is print. My closet is full of prints. I think they're. They're fun. Making your own prints is really expensive, and you need a designer who specializes in prints. Or you can buy them from freelance print designers. You're going to have to pay them. So that's just going to add a little bit more onto the cost. And then you also, if you want to do your own print and not buy something that already exists out there in the market, you're also going to need a high minimum quantity of fabric, also known as an moq, for custom design, because they're going to print a whole huge bolt. It's not the size of bolt of fabric that you see at Joanne. Like, we're talking. You need a truck to take it somewhere, right? So lots and lots of. Lots of garments need to be made in order to have a custom print. And there's a lot of fabric waste involved. You know, just cutting out the patterns. I mean, you know, if you've cut anything out, trace your hand on a piece of paper, cut it out, you have this weird scrap of paper left that you can't really do much with. And fabric is pretty similar in that way. Now, factories want to get every last cent out of a roll of fabric. And, you know, fashion is like a is a cents game. It's not just dollars. There's like. It's all about shaving off every cent. And so they often use software to determine the layout of the pattern on the fabric in order to waste the least amount of fabric. But the reality is a lot of fabric is going to the landfill before anything is even sewn or.
- [80:00]
C
Or if they are cheap, the way that you set the. The pattern onto the fabric should go with the grain of the fabric, so either directly up and down or directly perpendicular. And if you're trying to squeeze things in, you could turn things to the side slightly. And if you've ever had a knit shirt that you put it in the wash and then the seams somehow are now going, like, diagonally across the front of your belly and then across. That's because they stretch the fabric to squeeze it in. And then it's just a way. It's just something that's done, like, when they're just being cheap. And then you have this. And it looks fine when you buy it because it's been steamed and pressed to sit the right way. But as soon as you wash it, the seams, like, the fabric returns to its, like, natural shape. And then you just end up with these really wonky seams. I remember I had a pair of jeans where, like, the, like, seam was, like, coming down my leg and then slowly but surely, like, making its way across, like, to the middle of my shin.
- [81:03]
Janine
Oh, I have been there.
- [81:05]
C
It's a telltale sign.
- [81:08]
Janine
Yeah, yeah, yeah. And also matching up the print, you know, making sure that, like, weird. And then it's all even. You know, at Modcloth, I developed a lot of printed dresses, all those novelty prints, and it would cost us a little bit extra. Like, when I say a little, I actually mean a couple dollars in cost to make sure that the images lined up. And you want that because otherwise it looks cheap. Or there's the other thing, which I don't see as often now as I used to, but was. Was just a classic Standard at Forever 21, where maybe the front of the shirt or dress was printed, but the back was solid. Do you remember that? Oh, hate that. You can never turn around. You, like, exit rooms backwards.
- [81:52]
C
Yeah. Or you'd have, like, embroidery or some type of embellishment. Yeah.
- [81:56]
Amanda
On the.
- [81:56]
C
On the. Yeah, the main body, but not on the sleeves.
- [82:00]
Janine
Yeah, yeah. Sequined in the front, Nothing in the back. You know, maybe it'd be a knit T shirt back.
- [82:05]
C
Sure.
- [82:06]
Janine
Just. Just a night. Just a nightmare. And those things when you Wash them. They twist and are even crazier because they're often two different fabrics, not the same content. Things get weird. They get wobbly. I mean, there's just so many things that can happen there. But that's how, you know, that's got. How you make that margin, which we're going to get to in a few. So next, okay, we've got our fabric. That's, like, the main ingredient. Right? But now we gotta, like, make it happen. And the sewing part of the process is called the make. So that's, you know, sewing it together for one, but also details. Every detail you add on is a little bit more cost, so. Oh, you like pockets in your dresses? There's. There's a dollar. You like a nice hidden zipper that's ykk and metal and gonna last the test of time. Okay, there's a couple dollars. Do you want your seams to be, you know, reinforced and hidden and lay flat? No raw edges. I hate raw edge T shirts. Raw edge knits in general, like, make me so angry. Actually, I hate raw edge wovens too. Raj is when it's just cut and then it just frays as you wear it. Drives me up the wall. So basically, what we're saying is the better it fits and feels and looks, the more expensive it was to make. So going back to this idea of, like, the front of the shirt has embroidery, but the sleeves in the back don't, you know, like, that's how you keep prices low. Right. So, Janine, what is the detail that just makes or breaks a grammar for you? Like, something you just will not buy or will drive you up the wall?
- [83:40]
C
I will say, even though I already said I did this, but the fabric is the most important to me, so I have to feel something. It has to be natural fiber. As I said, my aversion to polyester is. Is real and strong. And that also is really annoying to me because I get it. We're in 2020, but I hate. I hate shopping online because I want to touch everything. And so, actually, for the COVID crisis that we're in right now, this is really great for my wallet because I'm just not buying anything because I can't touch anything. So fabric is the number one, and then the other. The other thing that just really I cannot deal with is elastic around my waist. Like you've ever bought a romper. Like a cheap. A cheaply made romper. Yeah, that has an elastic waist on it to, like, cinch it in in the middle. Like, the cheap way to do that is just put elastic in versus and then sell it in a small, medium, large. Instead of actually, like bringing the waist in with darts or like some other construction method to make it actually fit someone. And then you would have to sell it in more sizes. You'd have to sell it in like a 4, 6, 8, 10, 12, or something like that. You couldn't sell it in small, medium, large. But the cheap way to do it is with a. A zipper. And just the idea. That's where the food goes. Like, I don't want any elastic.
- [85:06]
Janine
Yeah.
- [85:06]
C
On my belly, you know, and of course, like, I wear pants that have a waist and stuff like that. But I hate the idea of like a stretchy piece of elastic, like, like just constricting itself around my stomach. It's same. Same with any elastic sleeve. Like anything elastic on the sleeve that would, like, touch my arm in that way. Like.
- [85:27]
Janine
No, absolutely not the sleeve or the leg. The elastic is so gross. When you just, like, shift your shirt and you can see the line digging into your flesh. I just. It makes me feel so gross. Yeah. And sweaty. It's just. It's just not good. So.
- [85:43]
C
Not good.
- [85:44]
Janine
Trims and embellishments are the next thing. We've kind of touched on this. But, you know, things like sequins and embroidery, those are embellishment. But also think about snaps, buttons, buttonholes, appliques, the zippers. I would say the trim that I cannot handle are cheap plastic side zippers. Like, I. If you've had a dress like this, you know, my pain. A couple wears in. It gets stuck at a certain point and you're stuck in the garment. I was on a date one time. This was in the early aughts, and I was wearing a romper from H and M. It didn't have elastic waist, but it did have a side zipper that was plastic under my arm. And I went to the bathroom and took care of business. Went to put my. Pull my romper back up, zipped it halfway, and it wouldn't sit the rest of the way. And I was, like, trying everything I could. I had some hand lotion in my purse. I'm trying to, like, lube it up. And ultimately.
- [86:45]
Amanda
Oh, my God.
- [86:46]
Janine
A woman came in the bathroom and, like, helped me. It took both of us, and we were both like, if we pull too hard, this is it. Yeah. And this was a really important date to me, so I couldn't go out there and like, in a broken zipper, I would have had to just, like, immediately leave and go home. I wouldn't have been able to even say goodbye, but fortunately it all worked out. But I was in the bathroom for 35 minutes. No.
- [87:13]
C
Yeah, 35 minutes. Oh, my God. I bet he thought you had food poisoning or something.
- [87:18]
Amanda
I know, I know.
- [87:19]
Janine
And I should just be like, oh, oh, there was someone else in the bathroom, was having problems with her clothes. I need to help her, but actually me. So I hate a crappy plastic side zipper. Like, I just can't. I mean, the interesting thing about these bad zippers is that they're not just a fast fashion thing either. I've bought more expensive brands and had a similar experience. And I think zippers are really expensive to both inside stall and just to buy, you know, and so they're also, like, really challenging. Like, not every sewer can do it well. And so there's still a lot of different margins of error. And if you have larger chests, it's a little bit more challenging.
- [88:01]
C
It's. It's.
- [88:02]
Janine
Zippers are rough business still. Not as bad though, I guess as a. An elastic waist and a romper. And like now I'm fixating on that.
- [88:10]
C
I am imagining, though, like, what could you do if you didn't have a zipper? And I just had an idea of you being Velcroed into the.
- [88:19]
Janine
Like, I carry Velcro. I will tell you that this was the beginning of me carrying safety pins, like a whole tin of safety pins with me everywhere. Because theoretically I could have safety pinned it a whole bunch of times and it would have been not the most attractive thing, but if I had kept my one arm down the whole time, I really thought it through. So embellishments, trims, they generate cost. Next, this is something you're probably not thinking about, but the labels that are sewn inside, you know, there's the brand and size label. If you've ever gone down into the lower part of like a dress or a romper or your pants, you've probably seen additional tags that talk about country of origin and care instructions, and those are actually required by law. So got to get those printed. Someone has to design them. They have to be printed, and they also have to be sewn in and then hang tags for brands. I, I hate hang tags because everywhere I've worked, we took them off before we put the product on the floor. So, like, if we were selling Levi's, we would remove all of the shenanigans that came on there before we hung it and added it to the sales floor. So it's just like more garbage. And it's like Instant garbage, you know?
- [89:35]
C
Well, and on the flip side, when I was at Modcloth and we had stores before we had physical retail, we didn't have hang tags because why? It didn't matter. Like, there's nothing. I mean, just coming in a poly bag and whatever, you know, it came from ModCloth. But when we had the store, there was this, like, I don't even know, like, feeling that we needed to have hang tags so that, like, these things had more like ModCloth products branding on them so that, like, the customer really knew this is Moncloth branded product, blah, blah, blah. And so we had to not only design and purchase hand tags or hang tags, but then because our product was produced without them, someone had to manually safety pin them onto the garments.
- [90:31]
Janine
I hate that.
- [90:32]
C
I'm pretty sure they had the store associates do it, because I don't think they. I think they were like, oh, we're not gonna buy enough for like, it wasn't like, oh, we're gonna add this into the cost of the product for everything. Because it was expensive. Because I think they were like, I'm gonna say not quite a dollar, but like a dollar because they were really nice.
- [90:50]
Janine
Yeah, no, that sounds about right to me. I worked for a startup that had a similar practice, and the hang tags were really expensive. There was special string and then special.
- [90:58]
C
There was special string, there was special.
- [91:01]
Janine
Strings and special safety pins that were like, at this place. Yeah. And so they were like matte black. They were not the kind of safety pins I was carrying around in case I had a romper emergency. Right.
- [91:11]
C
No.
- [91:12]
Janine
So this, like, infuriates me because so much.
- [91:15]
C
You just take it off. I know.
- [91:16]
Janine
And it goes in the trash.
- [91:17]
C
It's just trash.
- [91:18]
Janine
It goes in the trash. It's just so gross. And it doesn't make me feel more connected to the brand. It's so stupid.
- [91:26]
C
If anything, when I see it, especially the ones that are safety pinned on, I just get annoyed because I'm like, this is trash.
- [91:33]
Janine
I know.
- [91:34]
C
And I literally, and I feel somehow obligated to save the safety pin because I'm like, maybe I could reuse the safety pin. But then it's like you literally just put it in the trash.
- [91:45]
Janine
Yeah. Well, the strange thing about the safety pins is that they are fine for holding on a tag, but they won't do anything else.
- [91:57]
C
No, they won't do anything.
- [91:57]
Janine
And I will say that they're not strong. When I see that kind of like, hang tag, safety pin combo, special string on a garment, I immediately lose respect for the retailer or brand associated with it. I'm like, they. They don't care about sustainability. They care about some random marketing blobbity block goobly gok that, like, tells them that they should be doing this to have, like, brand recognition that they don't need. You know, like, it's just so, so silly. It's like giveaways at conventions, you know, it's like, so silly. It does. It doesn't. It doesn't do anything, right? And think about. It doesn't do anything about how many hang tags and little special safety pins are in landfills right now because there's nothing you can do with them. So, yeah. So labels, tags, more cost. And as you know, some. It turns out, some of these tags can cost a dollar, which is my experience as well, too. We're talking, like, fancy cardstock. So next, if you want these garments to fit well and make sense from a design perspective, you have to pay specialized designers and technicians to perfect the fit, to do the technical design. If you've ever bought something that had a zipper that was just a little too short or long for the garment, I see this a lot with really cheap dresses where the zippers may be only, like, 4 or 6 inches long at the back. And you're like, what this means? Probably they didn't have the right technical design or they didn't have one at all. You know, that they sent a photo to the factory and were like, can you just try to mock this up somehow so there's some more expense? And in this situation, the more you spend on something to make it right, the more the garment's gonna cost. But in my feeling, this is my opinion, the more likely it's worth a greater cost to the customer. Right? It's gonna be a better experience. So next. This is. This is now. Things are getting really dry, right? You probably thought we were done. You were like, okay, I see. I can picture the garment. I see the hang tag. I see the little safety pin. But transportation, getting it from the factory to the retailer's warehouse or fulfillment center, I mean, that. That costs some money, right? So during the 60s, a long time ago, 95% of all clothing worn in the US was made in America.
- [94:23]
C
That's wild. Today.
- [94:25]
Janine
I know it's crazy to think about working in the industry now today. A mirror. This is so depressing. Are you guys ready? Thinking about this. If you got this grade on a test, are you ready? Brace yourself. 2% of Americans clothes are made within domestic borders, as in here in the United States. So we're talking about a lot of shipping and we're going to talk about how fast fashion has impacted that shipping in just a moment. But we're not just talking about fast fashion here. Luxury brands, you know them like Gucci, Comme des Garcon, Louis Vuitton. I'm so not a luxury person. I have to like hesitate to think of them. They actually do the bulk of their manufacturing in Asia as well with just finishing happening domestically. So just enough to say something is made in Italy, it's still a lot of transportation. All of all the stuff that we associate with fast fashion.
- [95:21]
C
I will also say though, just because something is made overseas and especially in China, does not mean that it was made poorly. And we're going to talk a little bit about the different kinds of factories later. But you can, you can get something made in China that is extremely, extremely, extremely well constructed and well produced and expensive and high quality. And you can get something that is, you know, that you would get from Alibaba or Amazon or whatever that would be cheap and is made of plastic. But I think it's important to clarify that there's. Just because it was made overseas doesn't mean that it's shit. And then. And just because it was made in America doesn't necessarily mean that it's quality. It's certainly going to cost more to have the production done here because we, the minimum wage that we have to pay people here is certainly much higher than in China or in India. But there's a whole gamut of, of quality of production overseas.
- [96:23]
Janine
I mean, and I would, I would just to tag on there, say made in the USA does not mean better. We at Nasty Gal we actually did a lot of knits like T shirts, bodysuits, underwear here in the USA and they were abysmal. And as Jenny mentioned, the, the hourly wages hires were paying more for the help. Well, that the Nasty Gal customer didn't want to pay 20 extra dollars for a bodysuit because it was made in the usa. So we had to cut the cost out somewhere and it was generally the fabric that suffered and the sewing was just not good, you know, because the teams here might be being paid more to sew, which is also not always true, but they're being rushed through it and working under also tough conditions like no air conditioning in downtown la. We are going to have a future episode about Made in America and I will tell you that the person who I'm working on it with said something that I've been thinking about ever since, which is Made in the USA was the greenwashing before. Greenwashing.
- [97:22]
C
Oh, my God, it's so true.
- [97:24]
Janine
So true. Right? It's. It's a marketing message. So anyway, moving on. So here's the deal. Shipping via ocean is cheaper, but it takes about a month to get to the retailer. Right. So the boats are slow. I mean, they're actually moving really fast, but they're covering a lot of space. Air shipping takes just a few days, but it's also really expensive. And it's about 12 to 16 times the cost of shipping via boat. I mean, it's really expensive. So the cost of shipping is added to the cost of the garment for accounting purposes. And since retailers don't want to raise the price the customer pays for the garment, as we've already talked about, they have to cut costs in other places if they want to ship via air. So it's cheaper fabrics, trims less, One less fit session, maybe changing up the dye. Zara, I thought, okay, so I'm going to tell you, I thought I was going to dig into this and find out that Zara shipped 100% of their product via air, but it's actually only 40%, which is still a lot. But they have these crazy ships where they put the mostly finished product, they load it on, and then in the month it takes to ship to the US they do the finishing. So they sew on the tags, they add the dumb hang tag. Yeah, yeah, they do all the finishing.
- [98:45]
C
That is wild.
- [98:47]
Janine
So wild. I mean, they are geniuses of cutting out all the costs.
- [98:54]
C
That's innovative, to say the least, actually. Cool.
- [98:57]
Janine
I think it's very cool. So when Janine and I were prepping for this episode, we talked sort of anecdotally about how we felt that there had been a huge shift from ocean to air shipping in our careers. I couldn't find any data for the entire industry, but I will say that in the early aughts when I began my buying career, shipping via air was very rare. And you often had to request special permission from upper management to do it. You had to make a really good case. We're going to run out. This is our number one style. Losing four weeks of sales would mean that we would lose this amount of money. You really had to come to the table with a compelling argument, and then maybe upper management would sign off on it. But now, in the past few years of my career, I have found that air is more often what's happening. And Ocean is almost the exception.
- [99:49]
C
Yeah. And I can attest to this Too. Like when I was at Banana Republic, everything was by boat. And I worked in non apparel. So like socks and jewelry and whatever. And so jewelry is basically the lightest, smallest, most expensive thing that you could. Air doesn't take up space, isn't heavy, and you can still sell it for 25 or $30 or something like that. And maybe, maybe once or twice a year, maybe you would get approved to air in jewelry, maybe. But everything, I mean everything, everything was by boat. And then when I was at Moncloth, I don't think we ever, I don't think we, I was gonna say boated anything. I don't think we ever, I don't think we ever received anything by boat. And I think during there was kind of an initiative sort of towards the end that was like this cost saving initiative where they were trying to figure out could we receive things by boat. But you have to build that additional month into your timeline. And by that point in our production like go to market calendar, we just didn't have the month. And so maybe we could, we could maybe boat reorders of like basic T shirts or basic sweaters or things like that. That it was just, we were just reordering something that we already had. But we certainly were never putting anything by boat that was brand new product because we didn't have the time. And so that really, that incentive to get things to market as fast as possible is also kind of indicative of this whole fast fashion trend where it's really about getting the product to the customer in as little turnaround time as possible.
- [101:39]
Janine
Absolutely. And I have noticed a trend also in terms of buying, you know, in the beginning of my career, we would place our orders almost six months out for certain categories because we want to accommodate for boat, we wanted to accommodate for extra fittings, quality assurance, et cetera. And so we would, without getting too granular about retail math. Every month you get a number of receipts which are, are your budget for how much you can buy that month. And often we would fill almost all of those receipts in advance. Maybe we would let a little tiny open in case we needed to chase into a reorder of a surprise bestseller. But in the past five or six years of my career, I have noticed a shifting into only spending about half of that until the month before that delivery so that we can react fast, chase into trends that we may have missed. There's also a lot of fearfulness about buying the wrong thing. I mean, you heard Janine mention that one of her jobs is to make sure we deal with Stuff that no.
- [102:37]
Amanda
One wants to buy.
- [102:38]
Janine
And so we all are fearful of the things no one wants to buy. And so chasing at the very last minute and shipping stuff via Air gives us a little extra reassurance that it's the right trend. So that's the air. That's why Air is more popular. And I think it's also important to mention that we, we think of this like as a fast fashion thing. We think of it as like, you know, Forever 21 or Boohoo or Nasty Gal. But the reality is that the entire fashion industry has, has adapted or adopted, I'm sorry, adopted this approach to buying. Right. So they are all earring stuff in. So, you know, we could have a long conversation about semantics of fast fashion is Gap. Fast fashion is J. Crew is Urban Outfitters. That's a whole other episode. But what I will say is that all brands have kind of become fast fashion because of this. That fast fashion is not what you think it is.
- [103:35]
C
And I would also love to know, and I would highly doubt this data exists, but I would love to know if by placing these bets closer in, are you actually, are you making up the money that you're spending on the air? Right? Because the whole point is like, oh, like we can react to trend more and blah blah, blah. And so we'll be able to make a more informed decision about the product that we're buying, that it's right for the customer. But because you are spending, just because you are spending this money and you're making the decision closer in doesn't necessarily mean that you actually picked a winner. You can still, you can still be wrong.
- [104:13]
Janine
Yeah, I definitely worked places that are follow this fast fashion model of shipping and ordering whatnot and they're buying, they have bought plenty of the wrong things. I mean, right?
- [104:26]
C
I mean, because it's just, it's an impossible job no matter what. But I would, I would love, as a data driven person myself, I would love to see, to actually know is there the return on investment there. And you would have to have a lot of data over time for a lot of products. And you would have to have the success rate of the shipped product versus the aired product. But I would be really curious and maybe it is, and maybe that ROI is there, but it certainly is something that adds a significant, significant amount to the final cost of the product for sure.
- [105:05]
Janine
Yeah. The wheels are turning in my brain. I'm like, who would give us 10 or 15 years of data so we could just look at it? It sounds so fun to me. I want to get to the bottom of it.
- [105:14]
C
I have some ideas, but I won't name names.
- [105:17]
Janine
Okay, we'll talk about it later. So I will say that not only is air shipping more expensive and then impacting kind of the quality of our product when we finally receive it, it's also estimated that moving just 1% of garment transportation from ship to air cargo could result in a 35% increase in carbon emissions. That is rough. We're talking just 1%. So even just knowing. Janine and I haven't been able to give you any firm statistics here on the shift from ocean to air in length of our career, but we know anecdotally it was pretty extreme. I just want you to think about the impact on carbon emissions that that shift has created and try not to get too depressed. Yeah, so. So that's transportation. Next. I don't want to go too hard into this, but this is part of the cost in some places you work and that is design and production loads. So basically what this is, someone in finance adds up all the salaries and operating budgets for the production and design departments. They'll model out how many units in in house design product the brand is going to buy that year. They sort of divide the total budget by the number of units. This is a really simplified version, but they come to a cost per unit that's called the load and that gets added onto the cost. So in a huge company where almost all the product is in house designed, that load can be pretty small, generally less than a dollar, a very small percentage of the. Of the total cost of the garment. But to name names here, because this company doesn't exist anymore. At Nasty Gal, our load was five to ten dollars, which is insane. Which is insane.
- [107:00]
C
I mean, we haven't talked numbers yet, but the average cost for. I would, I mean, let's say just a. A knit top would probably be like $5 and then like a dress could be 15 or $20. So adding 5 to $10 is like adding at a minimum an additional 25% to the cost, which is crazy.
- [107:24]
Janine
Insane. Insane. Yeah. So it meant in a lot of categories, it didn't make financial sense for us to buy in house product, which is bad news. Right? Basically what it means, if your load has to be 5 to $10 a garment as opposed to maybe a buck or less, what are you even doing? It means that you're. I know. It means that your company is spending way too much on design and production in proportion to the size of the business. And I can say at Nasty Gal, we had more designers and production people than we had buyers. Like it was huge. And in house product was an initiative, but we could just never get it right, like from a price point perspective. And on our site, the most expensive stuff we sold.
- [108:07]
C
Right.
- [108:08]
Janine
Was the in house design product. And it was all really, really cool. But it was the least profitable. Yeah, it was very niche and it was the least profitable part of our business. Absolutely. And I do, like, when people ask me like, what do you think happened at Nasty Gal? I usually give them a list, about four or five things, but that's one of them. Like it just was drowning us financially.
- [108:28]
C
I will say though, kudos to them for doing the fully loaded cost because during my time at Modcloth and when I first started working there, our in house production, so products, clothing and products that we produced ourselves was probably only about 15% of sales. And then there was an increasing effort over the years to drive larger and larger contribution of sales from in house production for a variety of reasons. Reasons one of them being that it was proprietary. So this was product you couldn't get anywhere else. And so that was a reason to come to the site. And then also in theory, it has a better margin because you, because you're not paying a middleman for it.
- [109:18]
Janine
Right, right.
- [109:20]
C
But we were never able to, to get to and agree on what this fully loaded cost was. And I don't, to be honest, because I wasn't. It's a cost accounting catastrophe, I will say, and just like a huge work driver. But to Amanda's point, it's relatively simple. Like take, take all of the salaries of all the people that work on this stuff and sort of figure it out. I venture to guess it's because any given year the amount of products that we produced in house varied widely. So like one year maybe we were producing, I don't know, 30, 30 garments per month. And then maybe another, maybe that went up to 150 at some point. Right? Well, probably not that high, but like, probably like 120.
- [110:11]
Janine
Yeah.
- [110:12]
C
And so, but you're still paying those people the same thing. So that cost per product is going to really vary quite widely. And then also our quantities that we were buying were also going all over the place too. So I think at some point they're just like, forget it. Like this is too, this is too complicated and we're just going to manage to our bottom line anyways and we're not going to worry about this. So I am actually, I have to give like credit where credit's due. From a cost accounting perspective and say, kudos on them that they figured it out and. And. And also had a real number like that five to $10. I'm surprised that somebody didn't see that number and just torpedo the entire project because that number would have said, this isn't a business that we should be in.
- [110:56]
Janine
I.
- [110:56]
C
So I'm actually surprised that, like, somebody figured out what the number was, realized it was astronomical, and then chose to proceed with, like, waving this flag that, like, I mean, maybe it was just some, like, you know, really, really honest accounting person that was just like, this is a number and this is the hill I'm dying on. Because that should have been. That metric and data point alone should have been enough reason for them to either stop doing that entirely or to significantly change the way that they were doing it. So, yeah, that's probably a reason. That's probably a reason why they went.
- [111:34]
Janine
I mean, it's so. Because I can't stop laughing because I have to tell you, first off, any of my friends from Nasty that are listening to this are also laughing, but in that, like, in that way that's both evil and angry sad at the same time. Because, yeah, it would. It would make sense that you'd be like, okay, something doesn't add up here. Right. But ultimately, and I could talk about this for hours. I've learned so much about the mistakes you can make in business from that job alone. The idea was that came from upper, from the top was that, hey, let's just take up the retail prices. I mean, Nasty House Premium anyway. And it turned out our customer was like, no, no. So then it was just like, even more than we're marking this stuff down, we've already paid this crazy load. I mean, no matter what, we're paying that load. Because the operation cost for the company are this huge design and production team. And I will say not to insult them, because all of the people who worked in design and production there were some of the most talented people I've ever met. Like, they were worth it, the money. And it's sad that they couldn't execute all the product they were able to because everything was such a mess financially. It had nothing to do with them.
- [112:48]
C
Yeah. I mean, it's really a game of economies of scale.
- [112:51]
Janine
Yeah.
- [112:51]
C
And you can make it work if you have the scale. And this was also like the a. I'll just say mistake that ModCloth made or just something that, like, we had to contend with was as a growing emerging brand, we couldn't possibly justify the Quantities that we needed to buy in order to get the economies of scale to make the costing work so that we didn't have that five to $10 load that we had like a lower, a low, like a two dollar load or a $50 load or something like that. And so over time we were able to get there. But you can't just, it's really difficult to just start a business and start a brand where you're selling 2500 units of like a single piece. Yeah, it's just really hard to do that. And so like when I first started at Modcloth, we were buying anywhere from like 80, probably on the low end. 80 units of a product. 80, 80 to 150, I would say in private label. 80 to 120 was like an average buy on the, you know, sort of lower end. And then 300 was absolutely a max. And so you're just not going to get economies of scale with that type of, with those quantities. And so we worked our way towards buying thousands of units of things. 2,500, 3,000. I think we bought 5,000 of a beret. I don't even want to talk, long story.
- [114:27]
Janine
Oh, it's a dark place.
- [114:33]
C
But I mean that's how you get, that's how you can justify. Okay, if I, if I have to pay 10 people's salary or whatever. When you split it over 5,5000 units of something, it becomes, it becomes less like less of a cost versus when you're buying 120 units or 80 units of something, it just becomes ridiculous.
- [114:56]
Janine
Yeah, so, and I will say this is not on our pre discussed outline of what we discuss, but now that we're talking about it, last night my good friend Kim texted me very late at night to tell me that Need Supply and Toda Kylo were closing. And immediately our conversation was they went way too hard into private label. Like making your own product is so expensive and it's not. Yeah, it's so hard. It's not just the designers and the tech support and the graphic designers making the labels. It's also the minimums that you need to place in order to have a style made. And it's just so expensive, it eats up a lot of cash flow. It's very risky because in that situation when your average buy for a product is 80 units and you even have to write 300 units in order to have something made, if that's the wrong product, the repercussions are horrible.
- [115:59]
C
Yeah, so we're going to get to that soon.
- [116:02]
Janine
We're going to get to that. So one last thing in the cost. I feel like we're like baking a cake here. And now we're just like the last ingredient we're going to add is like the vanilla extract extract. Right. And that is the factory. Like, yes, we're paying people to sew the stuff at the factory, but we also. The factory needs a cut, too. Right. And the factory partnership, or lack thereof, is very complicated. So one thing that I see people discussing the most on the Internet when they talk about garment production is this misconception that most retailers own their facts factories. Reality is, they do not. It's actually risky to own your own factory because as we'll talk about in future episodes, different regions of different countries do different things as their strongest suit, and they can't do other things and they don't have access to other materials. And to have just one factory that you own would be a grave mistake. So often retailers work via agents who find the factories and they transmit the information back and forth. The agents take a cut as well. So let's talk about that a little bit based on your experience, Janine, what do you think is one of the biggest drawbacks of working with these agents?
- [117:21]
C
I mean, just complete lack of transparency. You just have no idea what's going on and that. So if you can imagine if you were any brand starting to be a new brand right now, how would you even go find a factory in China or in India or in Indonesia or something like. And how would you even know where to go? I think I remember correctly that, like, a lot of Victoria's Secret underwear is made in Indonesia. And I don't know why I remember that, but how would you even know? Oh, if I want a factory that makes good underwear or at least mediocre underwear, I should go to Indonesia. Like, you wouldn't. You don't. Like if you're starting out, you don't. Without doing a ton of research. And then even if you were to go there, how would you get an introduction to somebody who's going to take a meeting with you? I actually don't know what language they speak in Indonesia. So how are you going to communicate with this person? How are you going to know that you're not going to get taken advantage of? What's a good deal versus what's not a good deal? Say you met with this person and maybe their quality was good, but they were giving you an astronomical price. How would you negotiate it? Or would you just leave because you weren't going to get a good deal? Like you just, you, in fact, you don't have a lot of agency in this situation, so you need someone who does, who can help you source a factory. And finding a good factory is a huge part of getting a well made product in the end. And there's naturally needs to be a lot of trust there. And so just trying to get a fact, just trying to find a factory is a monumental task. Trying to find a good factory for a fair price is also a monumental task. Also you can imagine that like I was at a farmer's market last weekend and there was like, there was all these produce stands, but then there was like the one produce stand that apparently was the good produce stand and there was like a huge line for it and then no lines at any of the other stands. And so I'm like, oh, that must be the good produce stand. And so similarly with factories, they, the ones that are the good factories with that are doing good work for good prices, they have a long line or they're like, you need to work with us. And so when I was at Modcloth and we were doing this 120 units, 300 units like thing, no one would even work with us even if we paid them like an absurd price per piece because they're like, it's not worth our time. Like, where's your 1500 units? Like you're not worth it to us. And so especially when you're starting out, you don't have the negotiating power or anything like that. So it's really important to even have. It's not important, but it's an amazing resource to even have an agent as an option. Because if you're just out there on your own, I mean, I think you would get taken advantage of not only in price and quality and everything, you would just get totally screwed. But when you have an agent, because there's this middleman you really don't know. They may, I mean they probably would let you go visit some factory, but would you even know that this factory is actually producing your goods versus the one next door versus the one that's 40 miles inland that you've never even seen. And so you, you may think that you know what you're getting, but you really don't and even maybe say they like run a line for you so you come and visit when they're producing your red T shirt or whatever. Okay, Just because like these hundred or so units of this red T shirt were produced here doesn't mean that they haven't subcontracted out the other 400 units and like all of the white T shirts are being made someplace else. And so you just lose a lot of that transparency when you're working with an agent. But I would also just say retailers claim to have an understanding of what's going on with their factories. And just as someone who's worked in the business, and this is completely anecdotal, this is my opinion, this is not necessarily based on facts. I just don't really know how you can unless you really have a really good, strong working relationship and you're constantly visiting and checking in and even then you don't really know. And people will try to pull a fast one on you because they can. And so yes, you could in theory own your own factories, but that's just so unlikely. I mean, as, as you were saying about, everybody has their own specialty, too. There's a denim factory, there's a knit factory, there's a shoe factory, there's a belt factory, there's a this, that, whatever, underwear, all these different things that any, any retailer would produce has their own specialty. Like a woven shirt, especially like a nice men's woven shirt. You know, every factory is going to have their own specialty of what they're good at. And so you would, you, you not, you naturally need to be in business with a lot of different factories to produce everything to get a good quality product. And you would just never own innumerable factories like that. Unless maybe you were a Walmart when I was at old, maybe Old Navy. But even then I actually don't think they own their factories. I'm not sure. Like, and even if we remember like the really sad incident in Bangladesh, like, I forget, like, that was probably 10 years ago or so now maybe a little bit less, where that factory collapsed and it was like called out that like H and M and Gap and all these people like had business in this factory. Those were giant retailers. If H and M can't own their own factory, if Gap can't own their own factory, because it doesn't make sense, then, like, the tiny people are not going to do it either. And so like, all that's to say is that, like, it logically makes sense that you work with a ton of different factories and when the more factories you work with, the harder it is to know what's going on with each individual one. And I think the giant companies like Gap, like H and M, because they're so big a Gap, they have a whole, I don't even know what they're called but like factory management, sustainability, ethics department of people that work in San Francisco in the HQ and then also have on the ground people in China and in the other places to manage these, like, factories and make sure things are going, are being done ethically. But can a tiny company have that? Could ModCloth have that? Absolutely not. Absolutely not. Like, there's no way and no way when ModCloth was making, doing, you know, $150 million in revenue per year, there was no way that we could have ever liked, could have ever had that kind of team. It just was cost prohibitive. And so you, you have. I'm just saying, like, I guess you don't have to, but there, there is some element of a lack of transparency and a lack of knowing really what's how your clothes are being produced in any type of retailer. You just really. I personally just think that you really can't have complete transparency and complete knowledge unless you're really watching where every single unit was produced. And that's just not possible.
- [125:03]
Janine
Absolutely. And I think that's why, like, I always think of this as an example. Everlane.
- [125:07]
C
I was just thinking that too.
- [125:09]
Janine
Yeah. For all of the ethical and sustainable issues that Everlane speaks to, they never address the manufacturing. And I think that's because my hope is they know that that would be. That could just be a whole can of bees waiting to get the lid ripped off. Like, because they just don't know. It's probably okay, but it might not be okay. Right, but it might not be. And so it would be really, really bad. Look for them to promise that and then one of their factories to collapse in like a year. One of the factories they're working with.
- [125:44]
C
It'S like, oh, that's what you built your whole brand on.
- [125:47]
Janine
Yeah, yeah. So also just important to add that these agents who connect you with factories and kind of manage that relationship, they also take a fee.
- [125:55]
C
Oh, yeah.
- [125:55]
Janine
So, you know, it's a percentage. They're very expensive. But as Jeanine said, they're doing so much stuff that the brands can't do on their own. I mean, they're building those relationships. They're on the ground, they're the experts, and they keep it going. You know, they hold the factories accountable when things don't go right. And the last piece of the puzzle, which I'm barely going to talk about because it's so complicated and it's really boring, are duties and tariffs. And like, I. Maybe someday we'll talk about duties and tariffs in length, but it's basically like, you know, you got to pay to import stuff. Into the United States. And I'm sure you've heard all kinds of wackadoo stuff going on with our current President and raising duties against China, making imports more challenging for us in this very foolish attempt to bring manufacturing back into the United States. That's all I'm going to say about that, because I could go down a really big rabbit hole. But it can really be expensive. I mean, it can add a few dollars onto the cost, which once again, this is like a sense game. So a dollar is like a hundred cents. Astronomical.
- [127:04]
Amanda
It's a lot.
- [127:05]
Janine
It's a lot. Hi, it's me, Amanda again. Janine and I had seen such a blast talking that what was meant to be an hour long episode turned into almost three hours of talking shop. So surprise this episode is ending with Stay tuned next week for the conclusion of this week's episode. Next week we will be continuing the conversation by talking about margin and well, WTF is margin? Along with why ethically manufactured products should should be more expensive and then the disappointing truth about why they are actually more expensive. We will also touch on the payup controversy ripped from the headlines, Questions, comments, corrections or maybe just something you would like to hear in a future episode of clotheshorse. You can reach us the semi old fashioned way, otherwise known as email@clotheshorsepodcast. Or you can find us on the Gram Close Horsepodcast Extra Super Special thanks to Dustin Travis White for creating our amazing music while also acting as an incredibly patient and audio engineer and one man AV crew. Thank you so much for listening. Please come back next week.
- [128:36]
Amanda
Sam.