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Wednesday, September 28, 2011

Why the satchel is P3500 and other questions answered

photo by Aileen Siroy Photography

In late July, my partners and I ended the fabulous introductory price of P2,500. The price of our 11" satchel has been P3,500 since then. That already includes packaging and shipping within the Philippines. For an all-leather, handmade bag, that's a really good price, but for some of you, that's astronomical. Girls, astronomical is an Hermes. My satchel, in comparison, is crazy inexpensive.

And so I dedicate this post to all of you who wonder why things cost the way they do. I don't like doing educational posts because my image as a silly, shallow girl gets shattered. Like, totally. But as more and more people deluge my inbox with tawad, I just have to address this topic of cost. I like to imagine you were daydreaming or flirting or napping during your Economics class, you naughty girls! So sit up straight, smooth down your blouse, and pay attention!

Why is my satchel priced at P3,500?

First, it's all about economy of scale. The more items we make, the cheaper the item gets. How is that possible? Well, when Uncle Buck buys leather, he has to go all the way from Batangas to Malabon and back. Let's say one cow hide costs P1,000 and it makes 4 bags, does that mean a bag should cost P250? No. Uncle Buck spent time and money for his trip. And that's a very long trip! So if one trip means he buys a lot of hide, then the cheaper the bag gets.

Same with delivery. Again, that's gas burned to and fro Batangas to Mandaluyong (where I live). So even if Uncle Buck finishes one bag in 2-3 days, we wait for a batch of finished bags before he delivers here. To keep gas costs down, we ask for just one delivery.

But because everything is painstakingly handmade, we can't accommodate huge orders. Believe me, I'd love to sell a thousand bags a month but Uncle Buck can only make a few so there goes my get-rich-quick dream of supplying to SM!

Second, there's the cost of labor and other expenses. Uncle Buck has a very small team of craftsmen making the bags, which are completely cut, tanned, tooled and sewn by hand. No machines at all! Sure it's slower but the bag comes out much better. It's not just their time and talent that you're paying for, however; there's also mine! I spend a few hours each day answering bag inquiries, checking and making payments, wrapping bags, writing thank you notes, sending the bags out. My time isn't free. Neither is my phone bill. Oh and my stationery, my pen, my Scotch tape, etc!

My two partners also devote their time and energy to this business and we don't get a salary from it. My entrepreneurial friends say we should get a salary but we chose not to because that's just going to drive the price way up. What should our salary be? Well, in my case, as a professional writer and editor, I already command a pretty good price for an hour's work. If I charged the bag business my rate, then one satchel will be in the P10,000-15,000 range. That's just my rate; I haven't included the hourly rates of my two other partners!

Third, consider quality. As I keep emphasizing, each bag is handmade. Each bag is the result of backbreaking labor. Those perfectly distanced holes, those perfect stitches, the precision and care that go into each satchel is all human. And the bag is entirely Pinoy--from the cow to the courier! This is Pinoy service at its best!

Fourth, your bag is rare. Because it's completely handmade by only a small group of leather craftsmen, only a few people in the world own that bag! This is not a mass-produced bag. Consider, for example, how a fashion chain orders 500,000 black dresses and 500,000 pairs of black peep-toe heels from China. While you may think you made a unique fashion statement in your cute LBD with matching shoes, so did 499,999 other girls. That doesn't make you very unique!

So you might be thinking (and I actually got this question), "Well then, why don't you just get cheap leather and get machines to cut and stitch the whole damn thing?" Unbelievable.

Because, first, there's no such thing as cheap leather. Unless you're talking about fake leather, which means it isn't leather, right? Second, if we got machines to do the job, then the fabulous craftsmanship of each bag I sell will be lost. Third, if I can produce a million bags (that would be nice!), yes, the bag will be waaaay cheaper but it would have lost its unique appeal. Then what's the point of my bag if it's just going to look like any old fake leather cheapie?

You know, after listing down all my reasons above, I am now convinced that my price is actually incredibly low. As my customers from the United States keep saying: "A genuine leather bag that's handmade and it's only $80?! Are you sure it's only $80?!" Maybe I should raise my price!

My bespoke leather satchel is for the discriminating customer who values hard work, quality and the value of her peso. My customer appreciates style and craftsmanship and is willing to pay for it. If that describes you, then buy my bag!

15 comments:

  1. I am just so happy and proud to be one of the first to buy and own your satchel (at intro price!) It pays to be first :))))
    It never fails to receive compliments and I know it is worth every peso! Being hand-made using genuine leather is what makes it unique, and therefore, the price. Yours is still a very reasonable price.
    Wish you all the success Frances :)

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  2. oh well, for the quality and the design itself I must say that the bag is priced right..but i can't afford it right now so it will definitely be on my wishlist as for the moment as i am saving for it..i hope the price won't raise once i have enough money to buy it na..:)

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  3. For those asking, 'handmade' and 'real leather' should be enough reason why it's 3.5k. I suggest they look around for handmade bags with good quality leather for something less, i doubt they'll find anything. People, this bag can last you a lifetime if you take care of it properly!

    - A very Happy satchel owner

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  4. While I wish I bought the satchel during its introductory stage, P3,500 is a pretty good price.

    Remember, you're paying for:
    1) quality (good leather and craftsmanship);
    2) awesome design (Frances didn't just copy the cambridge satchel, she revamped it and made it even better :) - I fell in love with the cambridge satchel the first time I saw it but when I looked at it up close and touched it I no longer wanted it for the same reasons she stated in her previous blog entries);
    3) fair trade - it helps me sleep at night knowing that the craftsmen and the genius behind the idea are getting properly compensated for their hardwork and innovation (it terrifies me to know that big corporations can sell at a cheaper price because they put children in sweatshops)

    And while it may not be in everyone's budget right NOW, I suggest either buying a faux leather one then (a genuine leather bag is usually 5x the price) or working hard and saving up for it :)

    Anyway, thanks for offering these wonderful bags to public.

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  5. I am also saving up for this. I hope the price won't go up yet. *cross fingers*

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  6. I always get compliments for my natural leather FV Satchel! Even my son's pedia made it bati last week (our appointment got sidetracked by our convo abt the bag, harhar!)
    Quality has a price. You pay a premium for well-made goods, and at P3,500, this satchel is still a bargain. Also, I believe in supporting local endeavors, so in buying this bag, I don't just get something for myself, I also influence another person's livelihood. That, for me, is important, and so the price of the bag is worth it for me.

    And it's SO PRETTY, too. Just read my review about it, if you have doubts, ladies ;)

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  7. I thought your satchels would cost me an arm and a leg! that's why i was so hesitant to buy a genuine leather FV satchel! But at 3,500?! I came from the shoe industry and thought it would at least cost 5,000-6,000 pesos. I'm getting myself one.. let me PM you. :)

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  8. At first, I thought the satchels were expensive. But when I saw the price of the satchels from the other brands, it's very budget friendly! A friend told me that genuine leather bags costs around 5,000pesos the least. So this is a very good bargain for a genuine leather bag. I also like the fact that you could pay it at 50% off first, then pay the rest when it later (when it's here). That way, I don't have to worry shelling out "big" moolah right at the start since it takes about a month till it comes here. It's very budget friendly for me. Plus, the design is really pretty too! I already ordered myself one! Thanks Frances!! Can't wait~! :D

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  9. your price of php3.5k for the bag is a bargain. it's leather, handmade and best of all it supports our local industry! on a side note, i hope you don't mind, if you would be incorporating your (and your partners') hourly rate, maybe you should not based it on your rate as a magazine editor, rather to the position relative to what you are doing to the bag business (marketing, management, clerical, logistics?). there, my two cents worth :).

    now, if only shipping to canada wouldnt costs as much as the bag... hehehe :)

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  10. Oh, but, Jolen, a writer is paid way way waaaay lower than a marketing and management person is. So if I actually charged the bag business the prevailing rate of a marketing and management professional, then the bag's price will go waaaaaaaay higher.

    Writers are paid shit in this country. A magazine will pay a maximum of $60 for a 2000-word article. Whereas my US clients pay me $500 for a 500-word essay. That's why I like doing online writing jobs!

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  11. Thanks, everybody!!! Especially those who already bought from me. Thanks for believing in Pinoy =D

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  12. Hi Frances,

    Sending you love from Winnipeg, Canada! I'm one of your regular readers, but have never really posted anything on here until now.

    Couple of questions for you:
    1. I super love your satchel but I'm afraid as to the cost for shipping and handling to Canada. I agree that your bag is well-priced for its quality, and so if you can kindly let me know how much it'll be, I would really appreciate it.:)

    2. What company do you write for online that pays you that much??? I'm a fellow writer too (semi-regular columnist and I do correspondent work, as well, for a local paper), but it pays me peanuts. I have a full-time job, but I would still like to earn a little more for my articles. Would it be possible for you to point me in the right direction? I don't wanna take some of your writing jobs away from you, but if you can share some of them, that would be wonderful:)

    Thank you in advance, Frances, and have a great weekend:)

    Best,

    thebeachbitch
    xx

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  13. I really appreciate this post. 1. because you truly "get" handmade. 2. because you pinpoint the value of handmade. 3. by sticking to your principles you attract the "right" kind of customer.
    Although I switched my main business to loungewear I do still make bespoke bags when someone asks, and it doesn't come cheap!
    I'm not sure which market you are servicing with your satchels, but to get a bag like that for USD80,- is a complete bargain :)
    Just saying...

    happy selling :)

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  14. Hi Beachbitch, well, it'll cost ya. Shipping from here to Canada is PHP 1525 or USD 35. The 11" bag is USD 80 so the total is USD 115. Still a relatively good price for all leather and handmade!

    As for the writing job, it's The Style Glossy, an online magazine based in the US but marketed towards Asians. The fee is anywhere from $150 to $500. They found me and they assign articles every now and then, not regularly.

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  15. Duni, THANKS for thinking the satchel is a GOOD BARGAIN! And since you're a woman in the handmade business, I truly do appreciate that!

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