Total cost, in USD, of a tee shirt or a pair of shorts including door-to-door shipping purchased from a factory in Cambodia: 1.75-2.00. Each can sell in the US for $20-$50. This is way oversimplifying the situation, but when I hear that any US clothing retailers are having financial problems, I am shocked. These companies must be run by either the completely corrupt or the completely incompetent. Yes, I am sure it is tough to run a company on a 1,000% to 2,000% percent gross profit margin, but I think a small troupe of well-trained chimps could handle it.
It has long been that case that jewelry stores have a scandalous markup of 100-300 percent on pieces that they got cheaply, but they had to work for their profits. Expensive pieces could sit unsold in inventory for many months. Repairs, customizations, adjustments, cleanings etc. had to fill in the gaps when the people couldn't afford to buy the new stuff.
In the clothing biz, unsold stuff could be marked down to a mere 200 percent profit and sold in a sidewalk sale. Or, in the worst of cases, clothes could be donated by the bale as a tax write-off totaling more than the company paid for it.
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