At 01:18 AM 12/16/00 -0800, Steve wrote:
>Brian,
>
>I think you miss Jim's point.  I think his point, and Jim can correct me,
>is that the amount of resources that go into the $50.00 coat aren't really
>all that different than the $50,000 coat.  How much of that price
>difference is due simply to the label?  How much of it is due to the fact
>that one lacks the current style and the other reflects it?  Do these
>really mean more resources are consumed with one than the other?

Steve, It would be entirely incorrect to assume that the same resources were
expended. For starters the expensive coat may be a coat made with Canadian
Lynx. If it is, then the resources would entail a vastly more costly amount
of material.

Actually Fischer are the most expensive, but I will illustrate the Lynx here...

The Canadian Lynx or Russian Sable requires a tremendous amount of food to
supply a single pelt. The Canadian Lynx consumes snowshoe hares. During warm
winters the fur of the Lynx is not as marketable since the Lynx needs a very
cold winter to produce a good quality fur.

Many of the animals which are caught in traps turn out to have slight
imperfections as well.

The Lynx is becoming rare in Canada. It is dependent on snowshoe hare as
food, so when the showshoe hare populations die off after each 7 year cycle,
there is a die off of Lynx.

The habitat that Lynx prefer is also being diminished as a result of
clearcut logging. The Lynx prefers dense lodgole and jack pine. Foresters
thin these out and remove the brush if they can with toxic herbicides or
sheep or brush saws.

As a result of the foregoing, the amount of Lynx that are trapped in Canada
have declined over the years. The trapper that traps the Lynx also has costs
that have been increasing substantially. So during  a good year the trapper
may trap 20-40 Lynx during a very short season  of perhaps 2 months. It is
only during the winter months that the Lynx has quality fur.

On the demand side there are more and more persons who want a fur coat.
However because the scarcity of the Lynx is increasing, over the last 50
years the price of a Lynx coat has increased many fold. In the past a Lynx
coat could be purchased for less than $500, but now the cost would be up to
$5000 or beyond.

Not all the furs caught are suitable for $50,000 coats. Only about 1% of the
Lnyx furs would be graded out for the most expensive coats. Demand for
expensive coats is a function of fashion, as Steve points out, and fashion
is a function of psychology. There will always be a market for fashion items
which hold value. A Lynx coat will hold value providing it is well made and
fashionable over a long period of time, much like a Harley Davidson motor cycle.

For a coat to be priced at this amount we have to include designers who work
in Paris, France, or in the US. They earn large wages to make sure that
fashions are current; fashion is based on psychological needs, emotions.
Then there is the marketing and this phase requires the fashion item to be
advertised in glitchy magazines like Vogue, etc., and the cost of marketing
and adverstising for a fur jacket is going to be very high per coat. This
adverstising will be on a single page in a magazine, or newspaper, and this
will require to be done in hundreds of thousands of magazine issues, 12
months of the year. Now there may only be 10,000 Lynx fur coats produced
worldwide each year, and for persons with the high disposable incomes [eg.
there are 30 billionaires with at least 8 billion worldwide], money is 'no
object' to them when it comes to a 'fetish' or fashion.

Then there is the cost of storage, transportation and the cost of sales.
This entails renting of storage and transportation that is suitable for an
expensive coat. This means optimization of temperature and humidity, special
chemicals, and surveillance of the product at all times. The store where the
coats are sold will not be a Walmart where shirts and coats are piled up in
bins, etc., but a very fancy store downtown where there high ceilings,
bricks and very beautiful rock work, etc. The store will not have a lot of
coats, and the coats will not be packed in bins. The other issue of cost and
resources involves the sales person's wages. Maybe only 10-20 coats are sold
in any store each season, but in order to sell one coat it may take the
entire week and the wages of one sales staff would have to be paid. These
stores are almost always staffed with well paid persons who basically watch
and wait. Then once or twice per day a potential customer arrives.The
heating bill, the light bill, rent, amortization, taxes, and all the
security bills, et cetera, are vastly greater than would be the case for a
polyethylene coat sold in Walmart or K-mart.

Then there is the cost of the mark up [potential profits] which is always
100%. The trapper gets for the best Lynx fur may be $800 or more per cat;
however by the time the furs are sewn together [including all the handwork
of the tailors, designers, the marketers, etc.] $50,000 is pretty cheap.
However the most value added does go to the designers and marketers who are
often the firms that sell the coats. This means that there is an efficiency
that prevents a barrier to entry to the market, making high prices possible.

Steve is quite incorrect in his 'preliminary' assumption, and he should have
recognized that there is a reason for the difference in price, and not just
perception [we call this material scarcity]. For starters, if a coat could
sell for $50,000 and it has the 'same resources' used to make it as the $50
coat used, then why is the person buying the $50,000? Surely the person
would simply ask the person making the $50 coat to make the same one that
cost $50,000 to make the same fashion, with the same materials.

Steve, the value and utility of supply and demand curves has completely
evaded your understanding.

Now if the coat was made from snowshoe hare skins, then the cost of the coat
could easily be in the $50 range, since thess are easy to catch and there
are millions of snowshoe hares, and the demand by rich people is practically
nil, and the demand of sensible people is practically nil [wool and down are
much more warm and easy to wear since shoeshoe hares are white].

One final point. The ecological impact of taking the Lynx and devoting that
much human and scarce natural resources to a coat is really what Brian and
Bryan and Micheal are speaking too, not the fetish or the fashion. Brian is
writing that it is the fetish, pscyhological needs of the peer group, the
liquidators, that needs to be addressed through education.

If a person really simply wanted a fur coat, they could easily go to Value
Village in Victoria, there are hundreds of them there that can be bought for $50

chao

john foster

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