We’re often asked why we don’t participate in sales or Black Friday. Our answer: because attractive discounts encourage overconsumption, which has a disastrous impact on the environment. But also because our prices are fair all year round, and when a company already offers fair compensation to suppliers and all workers, along with a low profit margin, its retail price is already adjusted and therefore cannot offer discounts. In this article, we’ll explain all of this to you.
What is a fair price?
A price is truly fair, on the one hand, when the consumer pays a reasonable price relative to the product’s quality. On the other hand, it is fair when all the parties involved in its creation are properly compensated (suppliers of raw materials used in manufacturing, production facilities, etc.).
At Kipli, we go to great lengths to offer customers the best value for their money. The natural latex mattress is about half the price of a mattress of equivalent quality sold in stores—and 30% cheaper than the average price of its online competitors. It is therefore priced to best match the customer’s purchasing power.
A fair price, then, is a matter of values. A fair price is also one that is close to the product’s cost of production.
It ensures a limited profit margin for the retailer. The cost of goods sold includes the cost of raw materials and their processing, as well as fair compensation for everyone involved in the production chain. To arrive at the retail price, we add the gross margin to this production cost; the gross margin covers fixed expenses (compensation for the e-commerce team, office rent, customer service, etc.), all taxes and duties (which we pay in full in France), and the profit made on the sale, also known as the net margin. At Kipli, the net margin on the sale of a mattress is 7%.
Why do we take fair prices for granted?
In the face of new development challenges, we believe it is essential to act responsibly and with commitment to promote better trade. As you are well aware, practices whose ethical integrity is widely questioned persist in global trade. For example, the pursuit of profit leads many companies to disregard working conditions. Furthermore, the wages paid to those involved in the production and/or transportation of their products are sometimes shockingly low.
Kipli is among those who believe that every company, regardless of its size or line of business, has a social and environmental responsibility. Ensuring fair prices is one way Kipli fulfills its responsibilities and provides as many people as possible with access to high-quality, durable, and eco-friendly products. In fact, Kipli takes the opposite approach to the “race to the lowest price.” Companies are constantly driving down their prices through promotions to attract consumers. This results in a whirlwind of crossed-out prices, confusing pricing structures, and implausible discounts that make comparing offers complex and opaque for customers.
What's really behind a price? How do brands manage to sell their products at rock-bottom prices during sales?
Kipli aims to shed light on a business practice that often leads companies to compromise product quality in order to maintain their profit margins.
We hope you enjoyed this article.
Of course,
The Kipli Team