Think about the last time you walked into a department store. The air is fragranced with all sorts of perfumes and colognes. You walk on soft, plush carpet. There’s soft music playing through the store’s speakers. Then, you ask a sales associate where the restroom is. You’re directed to a marble covered bathroom far nicer than anything you’d ever find in a restaurant or coffee shop. It all feels luxurious. It all feels exclusive. It all feels expensive.
But you haven’t paid a dime. Everything you just experienced has been totally free—the fragranced air, the plush carpet, the marble covered bathroom.
Why is everything in the store so expensive?
Think about where that department store was. On the outskirts of town? Hardly. It was either on 5th Avenue in Manhattan, or in Beverly Hills in Los Angeles or in the Galleria in Houston—areas that are highly trafficked by people and thus, areas that command some of the highest real estate prices in those cities.
But again, you’re still just browsing around the department store and haven’t spent a dime yet.
You notice how expensive everything in the store is: shirts that are $225, belts that are $250, shoes that are $400, and leather briefcases that cost literally over $1,000. Can it really cost that much to make a shirt that it has to be sold at $225? “It’s just cotton sewn together in a nice way,” you might think, “does it really need to be so expensive?”
But you continue looking around and maybe you just tell yourself “that’s just how much nice things cost.” Maybe you’re there because your boss told you that the college sweatshirt you’ve been wearing around the office isn’t office appropriate and so you’re looking for a more professional sweater you can wear to work.
So you grab a sweater you found that looks nice enough and approach a register to buy it. You’re told the price by a sales associate. $240. You swipe your card.
Boom, there it is. What just happened?
You Just Paid for Fragranced Air
The fragranced air, the plush carpet, the artistic lighting, the soft music, the marble bathroom, the costly rent the store has to pay in the middle of the city—you just paid for all of it. “But I didn’t ask for any of that,” you might think to yourself, “all I wanted was the sweater.” Too late.
Only a small fraction of the $240 you just handed over to the department store goes to the brand that made the sweater. In fact, the majority of it goes towards covering all the expenses for things you didn’t ask for that the department store provides—a glitzy store on 5th Avenue, hundreds of physical locations across the country, and perfumed air.
That’s why everything in a department store costs so much. You’re not just paying the business that made whatever you’re buying—the shoe company or the watch company or the shirt company or the pants company. You’re also paying the retailer that doesn’t make anything but is just a middleman between you and the brand.
You never interact with the brand and the brand never interacts with you. The brand, instead of selling their briefcases directly to you, sells them to a department store for $200 apiece. Then, the department store turns around and sells that same briefcase it just bought from the brand for $200 to you for $500.
In business-speak, the $200 price that the brand sells to the department store for is called the wholesale price, and the $500 that the department store sells to you for is call the retail price.
There is a Better Way
At Daniel’s, we cut out the middleman by selling directly to you. What does that mean? It means that we’re essentially selling our leather briefcases to you at wholesale prices. It means that even though our briefcases cost us the same amount to make as it costs the brands that sell in a department store for $500, we’re able to sell our briefcases to you for $195.
By engaging directly with our customers, you, we’re able to sell a high-quality leather briefcase at half the price of retail and that’s something we’re proud of. We believe that carrying a leather briefcase to the office is a sign of professionalism and maturity. We also believe that buying a leather briefcase doesn’t need to cost a fortune.
By cutting out middlemen and selling directly to you, we’re finally making a high-quality leather briefcase affordable. That leaves more money in your pocket for that second cocktail at dinner, that new restaurant you’ve been wanting to try, that necklace you’ve been wanting to buy for your girl, or anything else.