7 ms·

Frew, who apprenticed with a Savile Row tailor, can — all by himself, and almost all by hand — create a pattern, cut fabric and expertly construct a suit that,

by patio11 14y ago

Frew, who apprenticed with a Savile Row tailor, can — all by himself, and almost all by hand — create a pattern, cut fabric and expertly construct a suit that, for about $4,000, perfectly molds to its owner’s body. In a city filled with very rich people, he quickly had all the orders he could handle. You don't have to be Wall Street to figure out the bleedingly obvious solution to being a starving artist who has so much work they have to turn work away. Raise the prices. Then raise the prices. Then when you're done with that, raise the prices. At some point you'll be too expensive for the typical businessman, which will make you absolutely crack for a certain type of person common in New York, thus defeating all efforts at being less busy. So it goes. I guess you will have to raise prices.

ovi256 14y ago
As I was reading the article I hoped I'd find a dose of common sense in the comments, and indeed, here it is. Good as always, Patrick. Guys, take notes, this also applies for contracting.
aidenn0 14y ago
Indeed if he makes $50k off of 48 suits a year, he could nearly double his income by raising his price by 25%; if he is turning away customers that seems like a no-brainer.
harryh 14y ago
The real question is why hasn't he done this already? It's a fairly obvious solution. I suspect that there is some other force at work here, though I'm at a loss to guess what it might be. It's too bad that the NYTimes didn't raise this question.
- sopooneo 14y ago
  Absolutely. I hate it when otherwise compelling articles fail to even raise a screamingly obvious question, much less answer it. The cynical me wonders if it is because the writers actually do know the answer, and it somehow weakens or distracts from their point. Or perhaps requires the telling of an impolite truth.
  - rondon1 14y ago
    yes, things are not so simple. This man is not an idiot. He understand that raising the price could bring in more money with the same number of clients.
- kamaal 14y ago
  I am guessing the customer base is already small. And given most of his business would come recommendations and leads. 'He just increased his price'- Is not very nice if you want to get new customers.
  - jbigelow76 14y ago
    'He just increased his price'- Is not very nice if you want to get new customers. Raising prices may actually increase sales. I think some of the problem is a lot of us are seeing this relationship between the tailor and his clients through the lens of software or service providers. For any right thinking business person there is no pride in going into hacker meetup and saying "I just had to upgrade from the 28 dollar a month plan to the 39 dollar a month plan at saas-of-the-month.com". Guys that buy 4000 dollar suits are operating in a different world. They pay 500 bucks for the custom fit, and the other 3500 bucks pays for being able to say they paid 4K for a suit AND you can't get one when it comes time to play "biggest dick on table" at the next board room meeting.
    - harryh 14y ago
      As patio11 often points out you're wrong about software & suits being in different worlds. Any real software business is happy to upgrade from the 28/mo plan to the 39/mo plan if it gets even the tinniest benefit. I routinely approve those sort of expenses without spending more then 2 seconds thinking about them.
      - jbigelow76 14y ago
        > Any real software business is happy to upgrade from the 28/mo plan to the 39/mo plan if it gets even the tinniest benefit. But I'm not referring to benefits, I'm referring to "bragging rights". Say your company was utilizing a SaaS that offered a "Freelancer" tier and an "Agency" tier (where "Freelancer" costs less and offers less than "Agency"). Now if your company's needs could be serviced by the limits of the "Freelancer" tier would you pay more for the "Agency" tier just for the prestige of saying you pay for the "Agency" tier? No, you wouldn't. However that does happen with suits (or watches or luxury cars or other luxury goods), it's signalling. http://en.wikipedia.org/wiki/Signalling_(economics) http://en.wikipedia.org/wiki/Signalling_(economics)
- vidarh 14y ago
  Quit possibly it is ignorance or fear. I know an African woman who used to go to the living room of some lady that charged her 20 pounds for work that she could easily charge 50 for - African hair can take a lot of work. This lady never raises her prices. But she gets booked full 3 months in advance, and everyone who goes there raves about here and thinks she is ridiculously cheap. Now, granted, a lot of those clients would disappear if she charged 30 or 40 or even 50. But she could afford to lose a lot of them, and even at 50 she'd still be cheaper than most similar quality competition in the area. Simple solution to testing the prices? Hold back some time slots and offer a "rush" service to those willing to pay extra. Use a sob story about how this is family time she is giving up for you. Worst case she books slightly fewer slots for a while, and gives up on it. But she is too scared to even try because she is terrified of customers going elsewhere... Despite the fact that people are willing to schedule 3 months in advance to get their hair done in her living room instead of walking into their local salon the same day.
asr 14y ago
No offense, but this could be really bad advice. Maybe the customers who'd pay 10k for a suit won't go to some guy's living room for fittings. Or maybe the price of top bespoke tailors in town is comparable, because they make better use of lower-paid assistants. Or maybe, to convince a bank to make the loan he needs to move into a nicer place, he needs to show the bank he has a large backlog of orders. Or maybe he's in the middle of following your advice, just raised his price, and will shortly raise it again because he's still getting enough orders. I'm not saying you're wrong. I'm just saying we don't get nearly enough information to decide! And that's ok, because that's not the point of the article.
- noahc 14y ago
  And maybe it just might work... He doesn't have to jump from $4k to $10k. There's a demand curve and by raising prices from $4k to $5k and up he'll figure out where he can sit. More importantly, he's already at $4k. The person that spends $4k on a suit isn't going to sneeze at $8k. The person who spends $120 for a suit, throws a fit at $240.
  - wisty 14y ago
    > There's a demand curve That's commonly believed by mainstream economists, as an article of faith. That there is a demand curve, and it always goes down. It's not always true, unless a huge number of axioms hold (none of which are true). It's most obviously not true for prestige goods, which go up in demand as price rises (and then go down as no-one is able to afford them). Demand curves can be wacky, even discontinuous ... and don't always go up. But if they don't go up all the time, then 99% of analytic macroeconomics (as it's taught) isn't analytically correct, and the communists might win.
    - noahc 14y ago
      I'm not sure we disagree that much. I would argue that: 1. There is a demand curve, or at least we can plot demand. I would agree it can be wacky. 2. It is very likely that even if we get the exact demand curve wrong, it is probably a net win for him to raise his prices given that he is turning down work.
noahc 14y ago
Patrick, Just wanted to point out that was my first thought as well. Also, wanted to say that I make it a point to read your comment feed on HN. You're one of the 4 folks who I read regularly because of comments like this help me change how I view charging and valuing my work and others.
- fooandbarify 14y ago
  patio11, pg, tptacek... who is the fourth? I'm on the lookout for more very high quality contributors; sticking to their feeds instead of the front page (I still check front and new, just not as often) has greatly increased the value of this site for me. (Thanks Patrick, Thomas, and Paul!)
  - blacksmythe 14y ago
    edw519, cperciva, cletus, jrockway, swombat, mark_l_watson, andrewcooke, ... >> I'm on the lookout for more very high quality contributors; As am I.
    - nopassrecover 14y ago
      Yeah was surprised a few of these names hadn't come out yet.
  - noahc 14y ago
    Patio11, Tptacek, Danso, and SatvikBeri I don't read pg, because a lot of his comments come across as babysitting HN, which is necessary for him to do, but not something I want to spend my time on. I believe that what you put before your eyes, becomes what is in your brain, and you can only think about what you've seen before. What you think about is what gets written on your heart, and our actions are based on our heart. So, I value what I put before my eyes pretty heavily and that's why patio11, tptacek, and SatvikBeri are good reads. Danso is really interesting. patio11 -- Important because he reminds us (me!) about what we're really worth as programmers and beyond that if we want to increase our worth moving bits better isn't the most efficient way to do that. tptacek -- I don't always agree with him, but I think his world view is probably the most accurate of anyone on HN. The reason why this matters to me, is If I'm being honest with my self, hugely reliant on mental models. I use tptacek as a source of mental models about the world. danso -- He has some pretty interesting comments, and I find when he does weigh in, it's usually from personal experience. Photography, Journalism, and data are his big topics of interest. SatvikBeri -- I've never met the guy, but if you can get past his telling of how he saved his employer $2MM in a single year (http://news.ycombinator.com/item?id=4419277 http://news.ycombinator.com/item?id=4419277) over and over again, which I find very easy, he's worth reading. He doesn't post as much as the others, so I usually check in once a week or so. In a lot ways though, I think the $2MM story, is worth reading over and over again. It holds a lot of wisdom in how to approach business for the nerd-sphere. I read HN on cell phone about 95% of the time, and have 127.0.0.1 news.ycombinator.com in my host file, so I just have these guys bookmarked on my cell phone and check in with the top two daily, danso every couple days, and SatvikBeri about once a week. I also read yummyfajitas and mechanical_fish as well, but far less regularly. Usually, when I see a comment they make, I'll click on their username and read through their comments if I have time.
felipemnoa 14y ago
It seems like the obvious solution. There must be a reason why that has not happened. People will pay hundreds of thousands of dollars for a Ferrari mainly because they are so (artificially) scarce. And still they will have to wait a long time (two years) to get it. Incredibly enough the best advice to get your ferrari a little faster than other people is to suck up to the dealer. Could it be that a big part of his problem is branding and awareness?
sopooneo 14y ago
I agree, and that was the first thought I had. However, I have found that when people act in bizarre ways, it is sometimes because they are crazy, unintelligent, or ignorant. But much more often it is because they know something you don't know.
robomartin 14y ago
Most of the time proponents of price-elasticity make me laugh. And, I do say this with respect. I used to be one of these proponents. I inhaled business book after business book once done with engineering school. And, I played the game. And I got my ass handed to me. In the real world price elasticity works within a very narrow range that is industry and product specific and can --and usually is-- highly dependent on a huge number of external factors. Discounts are one of my favorite. Believe me when I say that I've played that game multiple times. I used to own an electronics manufacturing business that made products for industrial and professional applications. I had to face the reality of product from Korea and China entering the market at half my price and offering 60% of my value. The result, no matter what I did, was the huge sucking sound of sales leaving for the competition. Lower your prices you say? Did that. Multiple times. In multiple creative ways. Eventually matching their prices and accepting lower profits. "We'll make it up in volume". Bullshit! Maybe I sold 1% more product. That's it. OK, how about more value. Did that. Multiple times. Added features. Added mind-numbing technology. No-go. We are talking about products costing thousands of dollars per unit here. The fact was that people, particularly as the economy got worst, wanted Walmart, not Gucci. And so the business went to what they perceived to be the cheapest they could get. Don't get me started on Asian companies dumping to kill-off competition. Nasty. OK, well, how about the high end. I had very high end product as well. $50K per unit and above. High performance. The best of the best. Volume, just like the taylor in the article, sucked. We could make these "Ferrari's" but it was sheer pain and suffering, financially speaking. The general theory was that we'd sell a high-end unit and also sell a lot more lower-end units along with them. Nice dream. So, raise prices? Sure. Why not? The problem is that people are only willing to pay so much for what they are buying. The "how much" is a multivariable problem that is nearly impossible to solve. This is certainly true for a taylor who only makes a few dozen suits per year. He can't experiment with pricing too much as word of mouth would destroy his business. If customer B learns that he paid more for the suit that his friend, customer A bought all hell breaks loose. I know I sound very negative about this. I am just looking at it from the perspective of having experienced failure in price elasticity due to the product I was pushing existing in a very narrow trading margin. Volume couldn't really scale at the bottom or at the top due to different factors and price at the top was limited by what people were willing to pay for the product category. Perhaps he can charge more for additional services that he might not be monetizing. One example might be to extend the delivery time on his standard $4,000 suit and charge a $1,000 fee for faster delivery. In effect he would be raising his actual per-unit price, but it would be in the context of easily communicable value. In the prior example, customers A and B would have on issue with what each paid because the conversation would quickly identify that B got his expedited, which costs money. He could also take in an apprentice and see about offloading some of the work. My family owned several clothing manufacturing plants and so I am also familiar with aspects of this business. There's a lot that can be done by less skilled workers if one is smart enough to setup systems to make this happen. Finally, he might be very well served taking his problem to a local business school to see about getting help from one of their various programs. His business could very easily become the subject of a class and he could have a small army of consultants helping him move it out of the garage.
jacques_chester 14y ago
I believe that is was from you I learned about a book, "The Strategy and Tactics of Pricing", which I think everyone in this thread should read. Why speculate about how to set a price when you can apply some structured, thoughtful analysis to the problem? It turns out that pricing is at once a slightly mysterious art and yet can be grasped in a few hundred pages. And that almost nothing else has as much leverage over profitability. The book was actually overkill for the reason I bought it (settling on prices for a SaaS project); but I've started recommending it to every small business owner I know. It's that good.
mjwalshe 14y ago
But I savil row they have the apretices who do the cutting out and the basic tasks this chap is doping it all him self

by patio11 14y ago

ovi256 14y ago

As I was reading the article I hoped I'd find a dose of common sense in the comments, and indeed, here it is. Good as always, Patrick. Guys, take notes, this also applies for contracting.

aidenn0 14y ago

Indeed if he makes $50k off of 48 suits a year, he could nearly double his income by raising his price by 25%; if he is turning away customers that seems like a no-brainer.

harryh 14y ago

The real question is why hasn't he done this already? It's a fairly obvious solution. I suspect that there is some other force at work here, though I'm at a loss to guess what it might be. It's too bad that the NYTimes didn't raise this question.

sopooneo 14y ago
Absolutely. I hate it when otherwise compelling articles fail to even raise a screamingly obvious question, much less answer it. The cynical me wonders if it is because the writers actually do know the answer, and it somehow weakens or distracts from their point. Or perhaps requires the telling of an impolite truth.
- rondon1 14y ago
  yes, things are not so simple. This man is not an idiot. He understand that raising the price could bring in more money with the same number of clients.
kamaal 14y ago
I am guessing the customer base is already small. And given most of his business would come recommendations and leads. 'He just increased his price'- Is not very nice if you want to get new customers.
- jbigelow76 14y ago
  'He just increased his price'- Is not very nice if you want to get new customers. Raising prices may actually increase sales. I think some of the problem is a lot of us are seeing this relationship between the tailor and his clients through the lens of software or service providers. For any right thinking business person there is no pride in going into hacker meetup and saying "I just had to upgrade from the 28 dollar a month plan to the 39 dollar a month plan at saas-of-the-month.com". Guys that buy 4000 dollar suits are operating in a different world. They pay 500 bucks for the custom fit, and the other 3500 bucks pays for being able to say they paid 4K for a suit AND you can't get one when it comes time to play "biggest dick on table" at the next board room meeting.
  - harryh 14y ago
    As patio11 often points out you're wrong about software & suits being in different worlds. Any real software business is happy to upgrade from the 28/mo plan to the 39/mo plan if it gets even the tinniest benefit. I routinely approve those sort of expenses without spending more then 2 seconds thinking about them.
    - jbigelow76 14y ago
      > Any real software business is happy to upgrade from the 28/mo plan to the 39/mo plan if it gets even the tinniest benefit. But I'm not referring to benefits, I'm referring to "bragging rights". Say your company was utilizing a SaaS that offered a "Freelancer" tier and an "Agency" tier (where "Freelancer" costs less and offers less than "Agency"). Now if your company's needs could be serviced by the limits of the "Freelancer" tier would you pay more for the "Agency" tier just for the prestige of saying you pay for the "Agency" tier? No, you wouldn't. However that does happen with suits (or watches or luxury cars or other luxury goods), it's signalling. http://en.wikipedia.org/wiki/Signalling_(economics) http://en.wikipedia.org/wiki/Signalling_(economics)
vidarh 14y ago
Quit possibly it is ignorance or fear. I know an African woman who used to go to the living room of some lady that charged her 20 pounds for work that she could easily charge 50 for - African hair can take a lot of work. This lady never raises her prices. But she gets booked full 3 months in advance, and everyone who goes there raves about here and thinks she is ridiculously cheap. Now, granted, a lot of those clients would disappear if she charged 30 or 40 or even 50. But she could afford to lose a lot of them, and even at 50 she'd still be cheaper than most similar quality competition in the area. Simple solution to testing the prices? Hold back some time slots and offer a "rush" service to those willing to pay extra. Use a sob story about how this is family time she is giving up for you. Worst case she books slightly fewer slots for a while, and gives up on it. But she is too scared to even try because she is terrified of customers going elsewhere... Despite the fact that people are willing to schedule 3 months in advance to get their hair done in her living room instead of walking into their local salon the same day.

asr 14y ago

No offense, but this could be really bad advice. Maybe the customers who'd pay 10k for a suit won't go to some guy's living room for fittings. Or maybe the price of top bespoke tailors in town is comparable, because they make better use of lower-paid assistants. Or maybe, to convince a bank to make the loan he needs to move into a nicer place, he needs to show the bank he has a large backlog of orders. Or maybe he's in the middle of following your advice, just raised his price, and will shortly raise it again because he's still getting enough orders. I'm not saying you're wrong. I'm just saying we don't get nearly enough information to decide! And that's ok, because that's not the point of the article.

noahc 14y ago
And maybe it just might work... He doesn't have to jump from $4k to $10k. There's a demand curve and by raising prices from $4k to $5k and up he'll figure out where he can sit. More importantly, he's already at $4k. The person that spends $4k on a suit isn't going to sneeze at $8k. The person who spends $120 for a suit, throws a fit at $240.
- wisty 14y ago
  > There's a demand curve That's commonly believed by mainstream economists, as an article of faith. That there is a demand curve, and it always goes down. It's not always true, unless a huge number of axioms hold (none of which are true). It's most obviously not true for prestige goods, which go up in demand as price rises (and then go down as no-one is able to afford them). Demand curves can be wacky, even discontinuous ... and don't always go up. But if they don't go up all the time, then 99% of analytic macroeconomics (as it's taught) isn't analytically correct, and the communists might win.
  - noahc 14y ago
    I'm not sure we disagree that much. I would argue that: 1. There is a demand curve, or at least we can plot demand. I would agree it can be wacky. 2. It is very likely that even if we get the exact demand curve wrong, it is probably a net win for him to raise his prices given that he is turning down work.

noahc 14y ago

Patrick, Just wanted to point out that was my first thought as well. Also, wanted to say that I make it a point to read your comment feed on HN. You're one of the 4 folks who I read regularly because of comments like this help me change how I view charging and valuing my work and others.

fooandbarify 14y ago
patio11, pg, tptacek... who is the fourth? I'm on the lookout for more very high quality contributors; sticking to their feeds instead of the front page (I still check front and new, just not as often) has greatly increased the value of this site for me. (Thanks Patrick, Thomas, and Paul!)
- blacksmythe 14y ago
  edw519, cperciva, cletus, jrockway, swombat, mark_l_watson, andrewcooke, ... >> I'm on the lookout for more very high quality contributors; As am I.
  - nopassrecover 14y ago
    Yeah was surprised a few of these names hadn't come out yet.
- noahc 14y ago
  Patio11, Tptacek, Danso, and SatvikBeri I don't read pg, because a lot of his comments come across as babysitting HN, which is necessary for him to do, but not something I want to spend my time on. I believe that what you put before your eyes, becomes what is in your brain, and you can only think about what you've seen before. What you think about is what gets written on your heart, and our actions are based on our heart. So, I value what I put before my eyes pretty heavily and that's why patio11, tptacek, and SatvikBeri are good reads. Danso is really interesting. patio11 -- Important because he reminds us (me!) about what we're really worth as programmers and beyond that if we want to increase our worth moving bits better isn't the most efficient way to do that. tptacek -- I don't always agree with him, but I think his world view is probably the most accurate of anyone on HN. The reason why this matters to me, is If I'm being honest with my self, hugely reliant on mental models. I use tptacek as a source of mental models about the world. danso -- He has some pretty interesting comments, and I find when he does weigh in, it's usually from personal experience. Photography, Journalism, and data are his big topics of interest. SatvikBeri -- I've never met the guy, but if you can get past his telling of how he saved his employer $2MM in a single year (http://news.ycombinator.com/item?id=4419277 http://news.ycombinator.com/item?id=4419277) over and over again, which I find very easy, he's worth reading. He doesn't post as much as the others, so I usually check in once a week or so. In a lot ways though, I think the $2MM story, is worth reading over and over again. It holds a lot of wisdom in how to approach business for the nerd-sphere. I read HN on cell phone about 95% of the time, and have 127.0.0.1 news.ycombinator.com in my host file, so I just have these guys bookmarked on my cell phone and check in with the top two daily, danso every couple days, and SatvikBeri about once a week. I also read yummyfajitas and mechanical_fish as well, but far less regularly. Usually, when I see a comment they make, I'll click on their username and read through their comments if I have time.

felipemnoa 14y ago

It seems like the obvious solution. There must be a reason why that has not happened. People will pay hundreds of thousands of dollars for a Ferrari mainly because they are so (artificially) scarce. And still they will have to wait a long time (two years) to get it. Incredibly enough the best advice to get your ferrari a little faster than other people is to suck up to the dealer. Could it be that a big part of his problem is branding and awareness?

sopooneo 14y ago

I agree, and that was the first thought I had. However, I have found that when people act in bizarre ways, it is sometimes because they are crazy, unintelligent, or ignorant. But much more often it is because they know something you don't know.

robomartin 14y ago

Most of the time proponents of price-elasticity make me laugh. And, I do say this with respect. I used to be one of these proponents. I inhaled business book after business book once done with engineering school. And, I played the game. And I got my ass handed to me. In the real world price elasticity works within a very narrow range that is industry and product specific and can --and usually is-- highly dependent on a huge number of external factors. Discounts are one of my favorite. Believe me when I say that I've played that game multiple times. I used to own an electronics manufacturing business that made products for industrial and professional applications. I had to face the reality of product from Korea and China entering the market at half my price and offering 60% of my value. The result, no matter what I did, was the huge sucking sound of sales leaving for the competition. Lower your prices you say? Did that. Multiple times. In multiple creative ways. Eventually matching their prices and accepting lower profits. "We'll make it up in volume". Bullshit! Maybe I sold 1% more product. That's it. OK, how about more value. Did that. Multiple times. Added features. Added mind-numbing technology. No-go. We are talking about products costing thousands of dollars per unit here. The fact was that people, particularly as the economy got worst, wanted Walmart, not Gucci. And so the business went to what they perceived to be the cheapest they could get. Don't get me started on Asian companies dumping to kill-off competition. Nasty. OK, well, how about the high end. I had very high end product as well. $50K per unit and above. High performance. The best of the best. Volume, just like the taylor in the article, sucked. We could make these "Ferrari's" but it was sheer pain and suffering, financially speaking. The general theory was that we'd sell a high-end unit and also sell a lot more lower-end units along with them. Nice dream. So, raise prices? Sure. Why not? The problem is that people are only willing to pay so much for what they are buying. The "how much" is a multivariable problem that is nearly impossible to solve. This is certainly true for a taylor who only makes a few dozen suits per year. He can't experiment with pricing too much as word of mouth would destroy his business. If customer B learns that he paid more for the suit that his friend, customer A bought all hell breaks loose. I know I sound very negative about this. I am just looking at it from the perspective of having experienced failure in price elasticity due to the product I was pushing existing in a very narrow trading margin. Volume couldn't really scale at the bottom or at the top due to different factors and price at the top was limited by what people were willing to pay for the product category. Perhaps he can charge more for additional services that he might not be monetizing. One example might be to extend the delivery time on his standard $4,000 suit and charge a $1,000 fee for faster delivery. In effect he would be raising his actual per-unit price, but it would be in the context of easily communicable value. In the prior example, customers A and B would have on issue with what each paid because the conversation would quickly identify that B got his expedited, which costs money. He could also take in an apprentice and see about offloading some of the work. My family owned several clothing manufacturing plants and so I am also familiar with aspects of this business. There's a lot that can be done by less skilled workers if one is smart enough to setup systems to make this happen. Finally, he might be very well served taking his problem to a local business school to see about getting help from one of their various programs. His business could very easily become the subject of a class and he could have a small army of consultants helping him move it out of the garage.

jacques_chester 14y ago

I believe that is was from you I learned about a book, "The Strategy and Tactics of Pricing", which I think everyone in this thread should read. Why speculate about how to set a price when you can apply some structured, thoughtful analysis to the problem? It turns out that pricing is at once a slightly mysterious art and yet can be grasped in a few hundred pages. And that almost nothing else has as much leverage over profitability. The book was actually overkill for the reason I bought it (settling on prices for a SaaS project); but I've started recommending it to every small business owner I know. It's that good.

mjwalshe 14y ago

But I savil row they have the apretices who do the cutting out and the basic tasks this chap is doping it all him self