At this time in Malaysia, many local brands were born and they’re offering different cool concepts. Their quality is also as good as international brands. But still, we hear few people saying, “This local T-shirt is damn expensive, RMXX for just a Logo Tee, better buy one at X&X!”, etc.
Let’s see, why are local products are not cheap?
1. Local products are not mass manufactured
Most of local products are not mass manufactured. If we can see those products in stores and boutiques, selling at less than RM50.00, they might be produced in China which were made in mass production; too many, can be in thousand or million pieces for each model for wider market other than Malaysia. So, no wonder if the cost price for each piece is way much cheaper.
2. Workers are human who has responsibility
From manufacturing, material sourcing, stitching, detailing, finishing, quality control as well as transporation and logistic until the product is finally sold; all were done by human, not machine. They have their a huge responsibility to make a living.
3. Higher cost of material
In Malaysia, most materials are imported. Our beloved country has many natural resources but somehow we can yet to process the resources, so this raw material will be taken by other country to process and sent back to us as material. We buy the materials and make them as our finish products. Therefore, not all materials are easy and cheap to find. ‘
4. Higher cost price, higher sale price
From all the processes we mentioned above, they made the cost price high and make it higher when the brand owner place their products in physical store.Nowadays, to place the products in physical store or even online store, minimum consignment fee is 30% of the sale price. For example, The JAZALO Shoppe or LAZADA, BearinBag, etc. There are some who charge as high as 50% of the sale price. At least, the owner have to triple the cost price so they can earn good profit. Example:
Cost Price = RM30.00
Sale Price = Cost Price x 3 = RM90.00
Consignment Fee = 50% x Sale Price = RM45.00
After Sale = Sale Price – Consignment Fee = RM45.00
Gross Profit = After Sale – Cost Price = RM15.00
Look at the numbers! Sale Price of RM90.00 for a T-shirt, for example will be marked as expensive by consumers, while the brand will only get RM15.00 for its gross profit which will be summed to pay the workers, transportation and logistic cost, utility bills and others.
5. Made with love
Buying a local product means you’re building someone’s big dreams as for what they are doing is their love and passion to the products and work!
A saying says;
“When you buy from a small business, you’re not helping a CEO buy a third vacation home. You’re helping a little girl get dance lessons, a little boy get his team jersey, a mom put food on the table, a dad pay a mortgage or a student pay for college”
So, now you know why local products are not cheap. In case you’re finding great deals on local products and the price is quite the same with the international brands, why not pick the local product? Let’s support the local products of Malaysia!