We are often led to believe that cheap is better than costly, but the truth is that cheap can be costly. In the apparel industry, prices are going down because of the post-recession believe that discounting needs to be more aggressive. This has spoiled customers and they expect prices to be cheap now. The problem is that brands and retailers are no longer sourcing out cheaper FOBs.
Every retailer is dealing with this and while prices go down to nab new customers, the costs of making the products is not going down. It is a serious situation because it is heavily cutting into the bottom line of apparel companies. This is why going cheap with costs is not a good idea. The lower prices are putting a huge strain on the supplying of the merchandise, and the margins continue to shrink as a result. This is moving to unsustainable levels and factories are increasing costs to manage the requirements of the price reductions that consumers are demanding.