Pricing Strategy for Leather

The answers to your questions about pricing strategy for leather

Pricing Strategy for Leather

Product pricing strategy is a popular topic as many companies distribute their updated price lists for the new year. We are happy to answer your questions about pricing strategy for leather. The world demand for quality leather is at an all-time high. This increased demand is putting a strain on the supply of raw materials used to make leather. In addition to the laws of supply and demand, there are many factors that contribute to product pricing strategy for leather.

One factor that is considered when determining pricing strategy is the region where the raw materials originated. This is important because it plays a major role in the quality of the final product. In South America, for example, the warmer, drier climate causes hides to have more bug bites andother unwanted flaws, resulting in lower cutting yields. Sadly, the demand for lower priced and lower quality South American hides has contributed to the destruction of rain forests in Brazil. European hides, on the other hand, especially those from South Germany and Austria, provide the highest quality leather in the world. In Europe, artificial hormones are not used. Instead, the animals grow at a natural rate, resulting in tighter, stronger hides. In addition, ideal climate conditions reduce the number of bug bites and other flaws to the hide.

Italian Leather

Once the raw materials are ready, where leather is tanned is another important factor in pricing strategy. Leather is tanned in Italy, China and in many parts of the world. However, not all countries have the same human rights concerns, equal pay, or environmental initiatives. Italy leads the world in producing the highest quality leather, while maintaining the highest standards for environmental responsibility.

The type of hide being used for the product is a third important factor. Bull hides are larger and have a stronger fiber structure than cowhide. Therefore, products made from bull hide usually have a higher price point than those made from cowhide.

A fourth factor in pricing strategy is the final product characteristics. Full grain products that maintain the natural grain require the highest grade of raw materials, which increases the price of the leather. Lower grade raw materials may be used in the production of enhanced grain products because the surface is buffed to remove natural flaws. Therefore, enhanced grain products tend to sell at lower prices.

Finally, production time is always an important consideration. Leather production is a lengthy process for all types of leather.  Producing one dyelot of leather may take between eight to 12 weeks.  However, some leather products require more procedures during the tanning process to achieve the characteristics of the end product. For example, a labor-intensive, time-consuming, manual technique is used to produce the unique two-tone effect of hand-tipped leather.

In conclusion, when determining pricing strategy for leather, there are many contributing factors. At Garrett Leather, we understand that price can play an important role when customers are making their final decisions. When specifying high quality leather for your next project, feel free to ask questions to learn more about the leather you purchase. And if you haven’t received your 2015 Net Price List from Garrett Leather, request one today!

 

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