04 August 2014

My take on Stitch Fix.

I'm sure that by now, you've heard whisperings, or maybe loud shouts -- about Stitch Fix being "exposed." The short of the long of it, is that it was recently discovered that Stitch Fix is "marking up" their clothing pieces. And this has actually caused quite a backlash social media. People seem to be extremely surprised to hear about this. And I was a little bit surprised with how surprised people were. Wow that was a mouth full. lol

There was actually another element to it, which can be found here. But I won't speculate because it cannot be proved one way or the other so to argue it won't do a bit of good. 

I'm writing a response because A) I love Stitch Fix and have always been happy with their customer service and my experience, and B) I think it's important for people to look at the bigger picture. Plus, I will always advocate for companies I love.

*And please note that this post contains my thoughts and opinions. In no way is anyone asking or paying for me to write this. Not promising that everything I'm saying is completely accurate, I'm just writing based on the conclusions I have drawn.

I'll start by telling you how I found out they were marking up their items. Almost a year ago, I received a box and fell in love with a shirt that was in it. I felt like $48 was a little expensive for that particular shirt, so I looked up the designer online and found their boutique. I saw that the same shirt was sold on their website for about $20 less. At first, I was annoyed. Why on earth would I pay $20 more for a shirt through Stitch Fix, when I could clearly get it cheaper somewhere else? I actually spent a lot of time thinking about it.

And after doing some research, I basically concluded what should have been obvious. This is how businesses make a profit. Being a business owner myself, the overhead to run a company is enormous. And unlike me, they have employees to pay. And at the rate that Stitch Fix is growing, I'm assuming there are a lot more of them in the last year or so then when they started.

Important Points To Remember

  • They cover for shipping the box to you, AND the return shipping.
  • Stitch Fix provides a $25 referral credit to everyone who uses your link to sign up. That's a huge perk if you ask me. But it's also a lot of clothing that they are essentially giving away. 
  • With Stitch Fix, you pay a $20 "styling fee" per box, which goes toward your purchase if you keep anything in your fix. So basically beyond the clothing, they aren't really making any money from you if you end up keeping anything. So.... where the heck are they supposed to make a profit?!

    The clothing "mark ups." That's it. That's pretty much where they make their profit. And I promise you that every single retailer out there, marks up their product. It's a no brainer if you ask me.
  • BUT with that said -- Stitch Fix sells their items at the MSRP. (Manufacturers Suggested Retail Price). They don't mark things up above and beyond that. 

You Are Signing Up For a Service
Aside from everything else, when you sign up for Stitch Fix, you are essentially hiring a personal stylist. You aren't just buying clothes. You are paying for a service! 

Think about it like this. Have you ever hired a house cleaner? Could you clean your house yourself and save money? Absolutely. But you hire a professional house cleaner for the convenience, because you don't have time to do it yourself, and you just want the help. Same with any luxury service really. Can everyone afford to hire a house cleaner? Probably not, it's not going to make sense for everyone. But the same goes for a service like Stitch Fix. There is a Stitch Fix Stylist that is doing their best to get to know you, to find your style, and to help you shop. To pick things out for you that you will like, and to help you expand your horizons a little and try some pieces you might not otherwise try if you were walking around the mall by yourself.

For some, they'd rather just go to Target themselves and buy a cheap shirt.... which is completely understandable. So in this case, a service like Stitch Fix just doesn't make sense for you. But for others, maybe they don't have the time, or don't have the patience to drag their kids in the dressing room with them. Or maybe they need help with fashion and putting together outfits. Or maybe, you have money to waste and you just love getting clothes in the mail. Whatever the reason that someone signs up for this service, they are going to pay extra for the luxury. Period.

This is my opinion, but that "extra" you pay, just happens to trickle down to the clothing. It's really a pretty simple concept.

I'm not writing this post to say that the "mark up" of the clothing isn't high, because it is. I'm just saying that it makes sense when you look at the bigger picture. With any service, think it's important to understand what you are getting, what you are paying for, and how it benefits you. For some, it's worth it, for other's, it isn't.
Some pieces from my last Stitch Fix
And that's it. That's all I have to say about this controversy. Again, these are my thoughts and opinions, and because I've been using, and have loved this service for a year & a half now -- I really felt that I should express my take on the whole thing.

I really hesitated to publish this post because there has been a lot of drama surrounding this and if you know me, you know I can't stand contention. So if you have a differing opinion, I totally welcome it, but please be respectful to me, and to others! :)


24 comments:

Kate from Life as I know it said...

I completely understand the $20 fee, but then to mark up from there seems crazy to me. I had wanted to try Stitch Fix for a while after seeing them around but after seeing the maxi skirt you got a few weeks ago I signed up, requested the skirt and got it. I loved it until I saw the price tag! What a joke! While I did purchase it, it was a big deal to me considering I've never paid that much for an item of clothing, much less a skirt. And I had just MADE my own maxi skirt that turned out awesome for about $8! ($50 less than the Stitch Fix one!) I know this service works for a lot of people, and that's awesome, but I'm just not cut out for it!

Mandy@ a sorta fairytale said...

Kate, yah that was my point in writing this. Was to sort of say that you aren't REALLY paying for the clothing. You are paying for a service. To some, it's not worth the money. To others, it is. It's just personal preference. But I think that what surprised me about this entire thing, is that people seem to not understand how businesses work. Stitch Fix simply prices their items at MSRP. Granted you can get those same things on sale or for cheaper somewhere else. But again, you are paying for a personal stylist to do your shopping for you. I think it's important for people to understand that.

Stephanie Doyle said...

Totally agree, Mandy. I don't expect to find the bargain finds that I would if I dig through the racks at TJ Maxx or Nordstrom Rack. It's a service, not just a product.

Logan Cantrell said...

I totally get it. I was a bit price-shocked when I tried Stitch fix a few monts ago, but I get why they charge more. It's a no-brainer. I'm actually surprised that people are so surprised. How do they think they can afford to run the business if there is no mark-up? I loved the items I received from them, but I am definitely more of a thrifty shopper.

Logan Cantrell said...

I totally get it. I was a bit price-shocked when I tried Stitch fix a few monts ago, but I get why they charge more. It's a no-brainer. I'm actually surprised that people are so surprised. How do they think they can afford to run the business if there is no mark-up? I loved the items I received from them, but I am definitely more of a thrifty shopper.

gillian claire said...

I actually love what you are saying here. II totally agree with what you are saying - the prices are high because it is a service. It is how they make money and honestly the Stitch Fix company is an amazing idea so kudos to them! The way that people don't understand services boggles my mind. I have done professional photography and it is a HUGE pet peeve of mine when people do not understand why photographers charge so much. I don't get it. People really expect that photographers with gorgeous "pinteresty" photos will meet them at a location of choice, spend time photographing and then hours edited and packaging for the same price of a Walmart portrait studio. It just baffles my mind. Loved reading your thoughts!

Life with Amberly said...

I think you said that so well! I haven't used Stitch Fix yet, but all of that makes total sense to me! (And when I do finally get a chance to use Stitch Fix, I'll definitely be using your link because you get some great stuff and have my dying to try it).

Jordan said...

I'm actually really glad to hear your thoughts Mandy. I've been dying to try Stitch Fix but really wants to know price ranges. I think $40-50 is ridiculous for a shirt or skirt but like you said, most stores mark their prices up. Look at Kohl's, when they have huge sales they always mark their prices up. I will definitely try it, if not for just a month to see what I think.

katie said...

The only people who benefit from the referral fee are bloggers, who have thousands of followers and post about stitch fix every month. Regular people probably only get it once or twice.

Mandy@ a sorta fairytale said...

Katie, that's very true. That's why I kinda consider it a "perk" of Stitch Fix

Mercedes Lyne said...

I really like that first shirt!

JMS said...

While I completely understand the business model and the pricing I am shocked that the items cost so much. I've been following your monthly boxes & there is no way Id pay that much for any of the items. I'm not their target audience be a use I love the mall but I'd much rather drop $58 on shorts at Banana Republic or JCrew & own them for 10 years. Or dare I say, even Nordstrom, whom you get a stylist... For free !

Fran said...

You already know this from our conversation on twitter but I totally agree with you. You're not just paying for the clothes, you're paying a service. It's strange for me how people don't understand this - with StitchFix and other services too. I run my own business and sometimes it's so hard because people don't realized they're paying for a service much more than they're paying for a product

Laura @ The Everyday Joys said...

All good points! I agree with what you're saying, and I love me some Stitch Fix, as you know. :-)

Karly Gomez said...

What many people seem to be missing here is that StitchFix is TINY compared to the high-end department stores like Nordstrom, Macy's, Chicos, etc. Those stores are based all over the country and roll through millions of units of clothing in a single month, compared to StitchFix, which services a mere several thousand.

You may THINK you are getting a free stylist when you shop at Nordstrom, but you aren't. The cost of his or her services is wrapped right on up in that pretty dress you ended up buying there. The only reason that the cost is lower is simply because of how high-volume the business is. It's common knowledge that the more of something you buy, the bigger the discount, and the same applies to business: the more units of product they buy, the less it costs per unit, which in turns equals a lower cost to the customer.

In reality, high-end department stores have even greater markup, because their margin of profit from the bulk discount to their retail price is much larger. So while you may think you're getting an amazing deal, chances are, you aren't. Nothing comes free, ladies, not even that helpful stylist in the mall.

JMS said...

I guess my point was from looking at the photos & guessing at the quality from the way the clothing lies on the body I would have assumed everything was in the $20 range. I'm happy to pay more for a service, free shipping & returns, awesome customer service & styling. But I want quality clothing that will last to go along with it. Maybe it's that the clothes don't fit my personal style ( I've yet to understand the appeal of the maxi skirt outside of maternity wear) so I can't see it. Like I said, I'm not ever going to be their target audience & have no issue with the business model or markups.

Autumn said...

My husband and I had this conversation after my first stitch fix. The whole thing with stitch fix is you are paying someone to pick out clothes for us, in the regular world, consultants cost a lot of money too! I really enjoyed my stitch fix a lot, but I decided it was too expensive for me right now.

Karri said...

Yep. You're paying for the convenience of not having to go to the mall or whatever, shuffle through the racks, waste your personal time, etc. Its a great service for busy moms or people who hate stores. As for the items being expensive, eh. Many of the brands i've recieved (Splendid, Kenzie, etc) are higher end brands and well, its not Target. If you want Old Navy and Target prices, then Stitch Fix is not for you. But its also better quality. That's all there is to it.

Karri said...

Oh yeah - my husband and I talked about the "free" personal shoppers at Macy's that he wanted to use. At a personal shopping level, you aren't buying $30 shirts and $50 pants. You're in the $200+ jeans level. Its all built in.

Kenzie @ Life According to Kenz said...

I MISSED THIS POST! AH! I literally agree with EVERYTHING you said! The price for the convenience isn't always ideal for me, either, but when I have extra money lying around, I LOVE to splurge! I literally just love the idea of clothes, handpicked for me, showing up at my doorstep. HA! And don't even get me started on the referrals program! Talk about amazing!

Brenda D Priddy said...

I agree with you. I never felt the quality of the clothing is bad either. All of my pieces have held up really well (unlike similarly priced Modcloth) and I don't think their prices are that much more than most places. Every box I got had a range of prices that would have fit with most budgets, I think. I consider the $20 the price of shipping/styling, and the fact that you get $20 off and 25% if you pick everything seems extremely fair. I would buy the entire box if everything fit.

Rj and Jessie said...

I completely agree!

Whitney H said...

Yes yes yes! I totally agree with you!! I love StitchFix and it's perfect for people like you and other moms that love to have clothing delivered to your door. For me (not a mom), it's exciting to see what they picked for me! I know its a little more expensive than usual clothing, but I'm okay with it. I knew all of this when I signed up. That being said, I think this month is going to be my last box, just because I feel like I DO have the time to go shopping and find bargains, so I can save a little moolah!

Beth Mayberry said...

Hello! I never heard anything about this but I totally agree with you 100%! I tell people all the time that Stitch Fix is boutique prices not sale prices. I shop there because they are small and I love supporting small business even if it means some things are more pricey!

I worked at the GAP for years and I know that ANY store marks up their clothes mega! You get a bunch of people to buy it full price and then drop it half to sell the rest with "inventory sales" but you are still making cash on all those that you selling! It is a company. It is part of running a business.

Oh well. Too bad for the haters - more Stick Fix for the rest of us ;)