The moneygoround: a mini essay on prices
Hey Joanna, your prices have gone up! What’s up with that?
Hey thanks for noticing! Yup, my prices have gone up, because I’ve had to add GST to them.
Shouldn’t that have been planned for from the start?
You might think so, but… it didn’t.
When I first met with my accountant over three years ago he told me that I didn’t need to be registered for GST until I had turnover of $60k. I don’t think he thought I’d ever reach that stage, and to be honest neither did I. And so because I wanted to keep my clothes as affordable as possible (and yes, “affordable” is a very relative term here – they’re not affordable compared to Kmart, but if you compare apples to apples – ie to any other ethical clothing company, they are), I didn’t initially include GST.
But here we are, three years later and while I still don’t have a physical shop, I have reached that turnover point. So now I’m registered for GST and consequently prices have risen 10%-ish. I will also add here, because being transparent about all business stuff is very important to me, that turnover is absolutely NOT profit. I believe for the ’19/’20 financial year I made approximately $2000 profit. And was told to be proud of that. So there you go.
Right, but the point is, your clothes aren’t cheap, and you know that statistically fat women make less money than smaller women
You are again very correct here. So let me tell you a bit more about where the money from clothes go, because I’ve just been working on reconciling my bank accounts so I’ve got a good picture of this.
The largest proportion of Boom turnover goes to my production manager Umsiko in Berhampore. That’s where the wonderful Iona makes patterns for me based on my ideas, and then she and her partner cut all the clothes, helped or hindered by the gorgeous cats Banksy and JoJo who I still maintain is named after me. Boom clothes are sewn by seamstresses around Wellington who Umsiko contracts in at more than living wage rates. Last time we talked the knits were sewn in Waikanae and other stuff was sewn in Naenae, but that may have changed as they get busy and have more seamstresses come onboard. The clothes are then pressed by another person in Berhampore where I pick them up, schlep them upstairs to my spare room and then eventually put them on a courier to you.
My next biggest expense is fabric. The majority of what I use is from Frost Textiles in Auckland. They also have a warehouse and an office in Christchurch. Their fabrics are imported. I would love to stock NZ-made fabrics, but that’s not really a thing, especially not when I want to keep the price of my clothes where it is. To me being unaffordable means unethical.
My third highest expense is buying in the Fanny Adams underpants that make your butts happy. They’re another small business based in Feilding.
My accountant would be next. Count on Us is a small business based in Kilbirnie. Peter made me cry the first time we met telling me I couldn’t open a physical shop, but he was right. Darn it! But just as it's very important to have friends who believe you can do anything, it's important to have an accountant who is brutally realistic.
After that, courier costs. I used to joke that I needed to change courier companies because my guy would never stop to pat Sebastian despite him meowing and prostrating himself for rubs, but I get it – couriers are exceedingly busy.
A cluster of costs here would be the really really small businesses that I buy jewellery and accessories from, which are tiny but make me happy to be able to support other creatives.
I guess after that is where my money starts to go overseas, to Shopify which provides the shopping platform I use. I also do a very small amount of Facebook advertising, because that continues to be the best driver for me. It’d be great if there was a more ethical company I could give my advertising budget to that had similar reach but that’s never going to happen. Then there’s packaging costs, office supplies, food & drink for launches and photoshoots…. and now, GST.
What’s the moral of this story?
There isn’t really one. I just thought you might like to know where your money goes when you buy from Boom. Cheers!