Price Transparency

At LOTTA LUDWIGSON, we believe in transparency and honesty when it comes to our pricing. As a brand, we anticipate that our customers value transparency and want to know the rationale behind our pricing. 

To meet this need, we have developed a page that delves into our price philosophy and explains the factors that influence the prices of our products. So you can see exactly what goes into each price, we have also included a detailed cost breakdown on each product page

An example for our price breakdown for our LOTTA blazer looks as followed:

Production Costs: 213,36€
Logistics: 43,22€
Company Costs: 255,42€
Tax: 121,60€
Social Responsibility: 6,40€

 

Production Costs: Production costs include all costs for materials and labor as we primarily produce within the EU. Material costs include fabrics and further components such as shoulder pads, lining, buttons, interlining, threads and various labels, as well as the production of various sample rounds in collaboration with our production agency. Labor costs reflect the craftsmanship and wages incurred in production, primarily at women-led manufactories and family-run businesses in the EU.

Logistics: Includes all costs for transport along the supply chain, packaging, and the final shipping fee to our customers.

Tax: Includes the sales tax paid to the relevant authorities of the country the product is shipped to. For our cost breakdown, we calculate with a German tax rate of 19%.

Company Costs: Our company costs include all costs for office rent, warehouse rent, salaries, marketing, website and IT services, payment transaction fees, bank account, insurance, tax and legal advice, mandatory membership fees for chambers of commerce and trade associations, photography, models, and our profit. Profit accounts for approximately 1/3 of company costs, depending on the product.

As a small, independent and self-funded company, we currently reinvest this profit entirely into upcoming products and restocks. The reason for this is our cash flow: a large share of production costs must be paid to our suppliers and production facilities several months before the finished goods are sold. Reinvesting our profit allows us to bridge this lead time and continue growing independently.

Social Responsibility: For every product sold, we donate money (approx. 1%) to organizations working toward greater equality, justice and opportunities for girls and women. We currently support the Sparsa Project by Nidisi. As we hope to support various charitable organizations in the future, we are always looking for further organizations in need of support. If you have any recommendations, feel free to write to us at hello@lottaludwigson.com