[rfagan2917]

Anyone else notice how cotton prices have literally fallen off a cliff?

Wondering what the community thinks is the implication for pricing from the mills (Gildan, Hanes, Fruit, etc...) in the near-term? Anyone expect pricing to come down as a result?

The last I checked, Gildan was pricing blanks off a $0.95 cotton cost basis, but with cotton prices coming back down to historical average levels, further t-shirt price reductions could be in the cards.

Lastly, does anyone here who regularly buys from Gildan have any plans to hold off on re-ordering until a potential pricing decline occurs?

All opinions/ comments welcomed!

 

[splathead]

Who has the luxury of waiting for a price decline before purchasing? When orders come in, you gotta get them filled.

 

[selanac]

I think the suppliers will only put things on sale instead of dropping prices.

The poster only has one post.

 

[rfagan2917]

How is "on sale" different from "dropping prices" ? Is the former less permanent or something?

Also, if you expect a price cut coming, do you normally just fill orders out of existing inventory, or do you not keep that much stock on hand?

If I were planning to replenish, i would be waiting until end of this summer because with cotton prices the way they are, the mills cant possibly expect to price t-shirts at a level which reflects cotton costs of $0.90 - 1.00/ lb.

Lastly, what does Gildan charge now for a dozen 5000's?

 

[splathead]

Lastly, what does Gildan charge now for a dozen 5000's?

We're not allowed to reveal wholesale pricing on the forum.

 

[aaronc]

GD500

Here we are.

And I don't think cotton prices dropping will have a serious impact on the price of shirts. There are a lot more factors involved than just the price of cotton, and honestly, we're all buying them at the price we're getting now, so why would they drop their price, would they really see that much of a volume increase?

Same thing as oil, I only use as much gas as I need, regardless of the price, but if there is a price drop, I suddenly have a bit more money in my pocket at the end of the day, buying habits don't change, because it's not significant or consistent enough to merit it.

 

[binki]

We have seen white t's come down about 25% on wholesale. Given they went up almost 100% or more in some categories it is welcome.

 

[selanac]

The suppliers also have a pricing structure. Buying one t-shirt or even 12 isn't going to give you much of a discount.

My supplier does more business in the fall than the rest of the year. Even if the price drops, they may have bought the t-shirts a year in advance, and wait for the order to be filled.

You can go to your local Craft store and buy 12 blank Gildans, hanes, or other brands they might carry.

Remember, the cost of the t-shirt is passed to the customer. As another person said, there's other processes that are added on, where we make our money.

 

[rfagan2917]

We have seen white t's come down about 25% on wholesale. Given they went up almost 100% or more in some categories it is welcome.

Thanks for that binki,

Just wondering if by down 25% do you mean down from peak pricing levels (which by my guess would have been around late summer 2011) or simply down 25% year-over-year?

It would seem to me that the mills have a lag with which they pass on lower cotton costs to their customers in the form of lower wholesale t-shirt pricing. This is due most likely to the delay which occurs between their purchases of cotton, and the sale of t-shirts made from that cotton. As a result, when cotton prices decline, mills inventory still reflect higher cotton costs, and therefore pricing cuts tend to lag the actual market price of cotton as mills try to conserve their margins. Therefore, as a supplier, the faster your inventory turns, the more competitive your pricing can be for customers.

If I assume your comment ment down 25% from peak levels, and we know that mills pricing to customers lags the decline in actual cotton market prices, that would imply that costs for the mills for their wholesale blank t-shirts currently reflects a larger decline in cotton prices, lets say around 40% from peak levels. This implies that cotton costs for the mills are currently around $1.10 - $1.25/ lb, and they are pricing their t-shirts to customers based on a cotton price of around $1.40 - $1.60/lb (significantly above cotton futures which are currently around $0.70/ lb).

However, given that cotton prices on the market are now down 65% - 70% from peak levels, then shouldn't wholesale t-shirt pricing from the mills be down around 50% from peak levels instead of 25%?? (that is if we incorporate the lag of passthrough from the mills of course)

Put this another way.... the average market price of cotton since 2004 has been around ~$0.60/lb if we exclude the huge run up in prices that occured during 2010 - 2011. How much further does your pricing need to decline to be back in-line with the average pricing your were paying suppliers between 2004 to 2010??

As allways, all comments very much appreciated!

 

[rfagan2917]

GD500

Here we are.

And I don't think cotton prices dropping will have a serious impact on the price of shirts. There are a lot more factors involved than just the price of cotton, and honestly, we're all buying them at the price we're getting now, so why would they drop their price, would they really see that much of a volume increase?

Same thing as oil, I only use as much gas as I need, regardless of the price, but if there is a price drop, I suddenly have a bit more money in my pocket at the end of the day, buying habits don't change, because it's not significant or consistent enough to merit it.

Yes perhaps the distributors will not have to cut pricing too much, but I can bet that manufacturers (ie: mills) can gain significant volumes by cutting prices, especially when you're dealing with a commodity product like a blank t-shirt. Just my 2 cents

 

[selanac]

When you say Mills, do you mean Cotton or t-shirt manufactures?

The cotton mill pricing may go down, but the t-shirt manufacture and/or distributors don't necessarlily drop the prices for t-shirts.

As stated before, they may put them on sale, and even change the weekly sale price from week to week. However, they don't change the Original Price.

 

[rfagan2917]

When you say Mills, do you mean Cotton or t-shirt manufactures?

The cotton mill pricing may go down, but the t-shirt manufacture and/or distributors don't necessarlily drop the prices for t-shirts.

As stated before, they may put them on sale, and even change the weekly sale price from week to week. However, they don't change the Original Price.

To answer your question, yes by "mills" I am referring to manufacturers such as Fruit, Hanes, Anvil, Gildan, etc...

These guys certainly raised prices to their large distributor customers (Sanmar, Broder, TSC, etc..) when cotton was on the way up, so I'm guessing it would be reasonable to expect that they should take these price increases back, and even lower prices as cotton has declined significantly. Otherwise, they will likely be undersold by Asian manufacturers or someone else. There is no reason in my view for large distributors to pay up on a commodity product such as a t-shirt.

As for the guys who buy blanks from the distributors, basically the screenprinters, they should expect the price cuts given to the distributors by the manufacturers to filter down to them eventually i would assume.

 

[selanac]

Unfortunately the Distributor doesn't see it that way. That's why they only put it on sale. I wish they did, but not always the case.

 

[rfagan2917]

Unfortunately the Distributor doesn't see it that way. That's why they only put it on sale. I wish they did, but not always the case.

What you are saying would imply that prices never go up either from the "original price" which is not possible.

As manufacturers turn over their inventory, they need to buy fresh supplies of cotton, which then are manufactured into new batches of t-shirts. By "original price" do you just mean the price at which these new batches of t-shirts are originally sold to distributors at?

In any case if the "original price" of new batches of t-shirts differ from the "original price" of previous inventory batches - then this represents a pricing increase or decrease from what you used to pay - by definition. If cotton prices never changed, and manufacturing costs stayed flat forever, and inflation was zero % then the "original price" would also never change. However we know this cant be true.

What I am referring to is the "normal historical average" wholesale price of a t-shirt, which would reflect normalized cotton costs for the manufacturers. This is the true "originical price" which I am referring to, the price you would expect to pay for a blank white-t on average over a long period of time and representative of historical average cotton prices (ie: not the levels we have seen recently).

Up until 2010/2011, cotton prices were largely stable in a range and therefore t-shirt pricing should have not fluctuated very much.

Any time you get a departure up or down from this historical average t-shirt price, it represents a pricing increase or decrease from what you would normally expect to pay for a blank white-t, historically, on average.

 

[vil3nr0b]

IMHO, there seems to be a trend of commodity traders from large institutions ruining prices on oil, copper, and cotton. They ran up the prices, manufacturers raised theirs, and I have no choice but to keep paying the prices. I don't believe anyone is honest enough to properly reflect prices when they go down. Worse even is the marketing selling a product for 25 percent off when over the last year it went up 100 percent.

 

[binki]

about 25% down from the highest prices we paid for white 6oz shirts.