What are the costs of making a Nurmi T-shirt?

What are the costs of making a Nurmi T-shirt?

Some may think that 59€ for a men’s T-shirt is way too much. But in fact: it should be even more.

At the moment all our men’s T-shirts are made from GOTS certified organic cotton from Turkey and the are cut & sewn in Finland. The production and material costs are so high that the “real” price for a T-shirt should be over 70€.

Why is our price for one T-shirt then “only” 59€? Because this is still a price people are willing to pay for a T-shirt. If it would be any higher no-one would buy it – that’s a fact.

This means that at the moment our profit per T-shirt is too low. We balance it with having better profits in some other products but still it’s not wise for us to produce a T-shirt with such high costs. So what to do?

nurmi-mens-t-shirt

How to make the profits better? We are not willing to to compromise on quality. We cannot do it less ethically and we won’t do it less environmentally-friendly.

The end result is that we need to get the production volumes up in order to buy fabrics in bigger quantities when the price per meter is smaller. In addition we need to find production places that can produce a bit cheaper – most likely this means that we need to source suppliers abroad. We have already been in contact with few factories located in Estonia and Latvia.

To keep the business running and really make a difference in the way the fashion industry works we need to be profitable. It doesn’t need a big change in the cost structure as you can see from the picture below. On the left side you can see our cost structure at the moment and on the right side the structure we’re aiming for.

Nurmi-cost-structure2

This structure might seem a bit harsh but this the way the industry works. Here’s a simplified version of how the costs are calculated:

Production + Materials + Transportation  x 2 = Wholesale price

Wholesale price x2 + VAT = Price for customers

More about Nurmi cost structures from our previous blog post: Nurmi Garment cots breakdown

More about cost structures from YLE News: T-paidan ompelijalle jää vain luu käteen

// EDIT 14.6.2017: There was missing on x2 from the calculation above. The following is correct: Wholesale price x2 + VAT = Price for customers