Our New Business Model
For several months now, we have been rethinking and evaluating our business model. At first, the idea of radical transparency seemed a little scary, but in order to be completely honest and open, we knew we had to take this step.
Radical transparency has become particularly important to the fashion industry, and consumers are increasingly concerned about brands' supply chains, fair labour, and taking care of the environment. This desire for information has led to more and more brands sharing all aspects of their operations – from the origins of fabrics to cost breakdowns. We believe that this change has created a stronger trust and credibility both internally and externally. Radical transparency should be the norm, because only then can everyone understand how to make every process less harmful to the planet.
Although radical transparency is gaining popularity, there is still a lot of problems. The one that we've been looking into is textile waste. It is our daily mission to solve the problem, but the cold hard truth is that we can't do it alone. Feedback and statistics show that more people would be involved in our mission if we had lower prices. Therefore, as a result, we have decided to change our business model, which will make our prices and environmental calculations 100% transparent.
Our new pricing strategy is now very simple and clear. We want to share cost breakdowns with you as well as environmental calculations, which are supported by the UPMADE® certification. Our brand has an academic background which enables us to deeply understand every process – and it is very important to us to know all of the ins and outs of our business.
Therefore, we believe that, just like we do, our customers have the right to know how much their clothes cost to make, and what impact they have on the planet.
Now onto the important stuff. Traditional retailers mark up their products by more than 6x. As it is not public knowledge and almost kept as a secret, we never really know what profit margins they have. Usually, the true cost of a product is marked up 3x, which then creates the wholesale price. Then it is marked up 3x, which creates the retail price. The change in our business lets us focus on direct sales, enabling us to make the wholesale price our final price.
We want to share two very important calculations: the environmental calculation and cost breakdown. Both are just examples, but every product in the Reet Aus collection follows the same principles.
For the whole fashion industry to become cleaner and more sustainable, we encourage other brands to also share their environmental calculations and cost breakdowns. The only way for the whole industry to become transparent is when everyone is involved.
Unfortunately, the result of making our prices more consumer-friendly is that we cannot continue to work with wholesalers. This is a risky step, but it is crucial in order to lower our prices, to make our products more accessible to more people. As we have said, we need the help of everyone to solve the massive problem of textile waste. In the future we will mainly focus on direct sales through our studio shop at Telliskivi 62, Tallinn and through our online store. But we have not cut all ties with wholesalers. Our products can still be found at Estonian Design House in Tallinn, and in the Siluett design store in Pärnu. In addition, we will continue to work with a sustainable fashion marketplace called Weecos, and our partner Yourmarks inc. in Osaka, Japan.
If you have any questions regarding our environmental calculations, cost breakdowns, or our pricing policy, please don't hesitate to email us at hello@reetaus.com
