I didn't have a price point in mind when starting Freja. I didn't want a number to dictate any design decisions - creating the best product always comes first.
So we sourced the best materials. We found a factory with highly skilled artisans. And we convinced them to work with orders a fraction of the size of their normal quantity. When you're small, and not willing to cut corners, costs can add up very quickly.
But as I've said before, building good things are supposed to take time and money. And if it's not meant to last, it's not worth making.
As part of our commitment to being a responsible brand, I wanted to share exactly how much it costs to make a few of our bestselling styles.
MATERIALS: All of our products use two different types of ultrafiber leather and microfiber lining, made by the same factory that supplies luxury brands. This also includes the cost of our custom hardware.
LABOR: Our factory team is paid a salary, not by piece, but this is the average cost per bag when dividing their salary by the amount of time it requires to make one bag.
PACKAGING: This includes our dustbag, thank you cards, packaging materials (tape, boxes, tags, etc).
TRANSPORT: This includes all costs to transport our materials from the mill to the factory, and shipping for our finished bags to our fulfillment warehouse. Although not heavy, our bags are quite large and delicate, which means we are charged a premium based dimensional weight. As we've grown we've been able to negotiate lower freight costs.
SHIPPING: This includes the last leg of the bag's journey, from our fulfillment warehouse to your doorstep. This covers our pick and pack fees at our 3PL.
We call our final cost the "true cost" of the bag, and multiply it by 3x to cover the costs of operation, such as our team salaries, operations and logistics, marketing and advertising, software fees, photography, accounting, etc.
This leaves about 20-25% profit margin, which we invest towards new product development, building the team, giving back, and growing slowly and sustainably. My factory and I spend many months conducting multiple rounds of product research, samples, and wear testing before it's ready. Many styles never see the light of day, and are either cancelled or shelved for future development. My factory also that we've become one of their biggest, most consistent clients over the past 4 years. It was so rewarding to see how far we've come since our first 300 piece order back in 2020, all thanks to you :)
Creatives hate talking about money, about running a "business". I don’t like referring to Freja as a “business,” because it sounds so corporate and impersonal — the opposite of everything we are. But successful businesses bring happiness. It brings stability and puts food on the table for every pair of hands involved in Freja — our makers, our suppliers, our shippers, our talented creators. Even though we are a tiny business, we represent so many. I want Freja to be a positive impact for everyone involved, and continue to do so.
I strongly believe the most sustainable way to run a brand is to create beautiful items (not too many), price them fairly every day of the year, sell directly to your end customer, give back when you can, and most importantly, be honest every step of the way. I hope you enjoyed this little peek into the financial side of Freja.
