Why Do Some Competitor Bags Cost 2 to 3 Times More? - Jackson Wayne Leather Goods

Why Do Some Competitor Bags Cost 2 to 3 Times More?


This is an interesting one. Given that we use the highest quality labor and materials possible, there are only two explanations for why a competing bag would be 2 to 3 times more money. 

First, it could use proportionately more labor and materials. The more leather and labor we use, the higher the cost of our bag. But to get to a multiple of 2 to 3 times more money, you would be talking about a very complicated and large bag. That seems unlikely.

The other explanation is Keystone Pricing. Keystone Pricing refers to the typical retail markup that has the effect of quadrupling prices, or at least doubling or tripling them in most cases. In short, the manufacturer has to set a very high retail price so that they can afford to sell the product at wholesale to a retailer for about half the retail price. Below is a chart that explains Keystone Pricing. 

keystone pricing