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Margins: EXPOSED

April 14, 2017

How much to spend?

What’s the right amount of money to spend on a necktie? $10 seems too cheap and can’t possibly result in a quality product, right? But to spend $80 - $100 on a single necktie seems insane. For most people, $20-$30 is a good range to get a quality necktie. Ross and TJ Maxx typically have some in this range. If you find a sale you can occasionally get ties at JC Penny or Macy’s in that range too. Or there’s a slew of online retailers that offer ties in the $20’s.

What do they profit?

So how much does the seller make on a Necktie in that price range? Well, it depends. For us, we don’t simply buy ties from China and resell them at a markup. We could, but then we’d be like everyone else and so would our ties. Instead, we intentionally developed our ties from the ground up to make them more functional and durable than anything else on the market. This means we had to hire a designer, spend 3 months sourcing materials, and most importantly develop our own production process which took another 6 months. Oh ya, did we mention we love America and all of our manufacturing takes place on US Soil? Because of these things our costs are typically 3-4 times that of a typical reseller. So when you buy from companies that rhyme with Mazi or Hi-Bar they are likely making 80-90% profit on that sale. When you buy from us we make about half of that. Then we try to put the majority back into the company so we can continually improve our neckties and introduce new patterns and styles.

Why you should care

So why should you care how much a business makes when you buy a product? Because how much the seller makes tells you a lot about the value you’re getting. If it costs a lot to make and you still buy at a good price, that’s a good sign you’re getting a lot of value. If we were to use standard retail pricing models we would have to charge over $60 to achieve the same margins as other necktie companies! But we believe that good products should be affordable for everyone, not just the elite few, so we don’t do that. We created these products for people just like us; hard working people who value what they spend their money on and expect things to last a long time. So next time you need a necktie think about what you’re actually getting for how much you’re spending. If you decide that you want to spend the same amount but get a better product, then check out Thetoughtie.com to peruse all of our beautiful patterns and styles.



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