What makes a backpack expensive?

Before diving into the topic, allow me to remind you that ATD Supply bags work better when combined in a true carry system that simplifies the transition between different everyday carry scenarios and travel. In order to let you build or expand your ATD Carry System, we set up some automatic discounts that can be combined for a substantial saving. Find them HERE.

---

There's a question that comes up quite often whenever someone sees or hears of a €300–400 backpack, sometimes even with packs over €200, sometimes even with packs cheaper than that: "How can a backpack possibly cost that much?".

Money is a deeply personal topic and it implies heavy social, geographical, and cultural influences. What is expensive to one person can be fair priced to the next, or even inexpensive to someone else, so the point here is not finding the fair price for a backpack or pushing the concept that paying €200, 300 or 400 for a backpack is right, but to better understand what manufacturing costs are involved and what can make a bag’s final retail price. Where the money actually goes.

Let’s make it simple and start with the finished product itself. For a backpack, you're paying for:

• Raw materials: outer and lining fabrics, mesh and stretch fabrics, foams for padding, webbing, buckles and other hardware, zippers, reinforcement materials, labels and packaging. Costs may vary incredibly, depending on:
  A. what materials the bag features (a 4€/m unknown Poly or a 18€/m laminate from a famous company? A 0,2€ nylon buckle or a 7€ Fidlock? a woven stretch or a knit? a closed cell foam EVA or some basic option?)
  B. how much material does it use (size and construction may bring to squeeze or expand the fabric consumption, same goes for zippers, hardware, etc. The bill of material is heavily impacted by consumption)
  C. how many different parts and materials the product features (the more they are, the less their use can be optimized), 
  D. where they have to be shipped from (each shipping will add cost)
  E. each component’s MOQ (companies might need to overbuy)
• Production setup and organization (is there a lot of materials to be sorted, gathered and stocked? Are specific physical templates needed? Do many machines need to be re-setup or not? Does this production need a lot of space? Add boxes, carts, etc)
• Cutting (Laser? Cutting table? Some components need to be cut manually? Prices can vary a lot)
• Assembly and sewing (Is it big or small? is it simple and fast or intricate and slow? Can it be done with automatic machines or not? Can it be done in series or not? Does it need spending time and labour to reinforce or bartack or not? Cost changes a lot according to the time and workforce required)
• QC (is it done once at the end of production or two, three, even more times during the process to avoid wasting time and materials in case of mistakes? By local workers or by people from the company that have to travel?)

Then, keep in mind that the total cost does not end with the finished product, there are also development costs — both direct, in terms of cash and indirect, in terms of working hours — that aren't visible in the finished product:

• the pattern has to be developed and it takes hours of work on CAD softwares, cardboard mockups and sewing machines
• samples have to be made and it takes raw materials and hours of work too (and iterations). 
• samples must be tested, this takes time, sometimes money.
• Those samples usually aren't right the first time — a component might need to be changed because it is difficult to sew consistently, a seam might need reinforcement, some particular piece of hardware might work well in a prototype but could create a production problem — so the process is usually repeated.
• When you get to the final iteration, some pre-production samples, made with the final materials, have to be made and this takes raw materials and time too — or cash if they are made externally.
• During this development process, shipping to testers or sewers for external validation occurs, sometimes external labour is required.

If you're producing relatively small quantities, none of those development costs are spread over millions of units.

When the product is developed and finally produced, there are other costs to be faced in order to bring it to the customer. Depending on where and how the product is sold, from the final retail price the manufacturer might have to cut:

• VAT (if due)
• shipping (if included)
• retailer margin (if not directly bought from the brand)
• distributor margin (if the retailer buys from a distributor and not directly)
• packaging
• payment fees
• e-commerce platform fees
• photography
• copywriting
• marketing
• warranty
• Insurances 
• storage and utilities
• administration and all the other costs involved in keeping a company running and a product on the market. 

Only then, the brand company starts seeing a margin.

To get to the final price, all these costs are summed up and a markup is then applied to the result, multiplying it. We are not debating here about what is the fair or right markup, this is subjective, what we can say is that out there you can find bags that cost 1/3 of their final prices as well as bags that cost 1/10 of their final price, and they're not necessarily the most expensive ones.

What should be clear is that a high price doesn't prove good design (or construction, or materials) and a low price doesn't prove poor design (or construction, or materials), but good design, good development, good construction and good materials often lead to high costs.

At that point, apart from cost management choices that can help make things better or worse, most comes down to the number of pieces that a company makes: if the number of products to spread those costs across is high, the final price of the single unit will be less impacted. If it is not that high, and for independent companies it usually isn’t, the final price will reflect that scarcity. 

This is one reason why comparing two backpacks by looking only at materials can be misleading, there is a lot more behind and consumers, or potential ones, simply need to decide what they want to pay for and if it is worth it.
Is it Durability? Carry comfort? Load protection? Exclusivity? A certain aesthetic? Versatility (the ability to serve users in many different contexts)? The presence of an ecosystem around it? Build quality? Clever or Innovative design? Brand? Rare materials (fabrics or hardware)? Warranty? After-purchase service? Repairability? Country of origin? Who owns the company? There is obviously no answer that works for everybody.

An expensive backpack isn't automatically expensive because every component is exceptional: sometimes you're paying for exceptionally good design and development, or for expensive materials (and this itself does not necessarily mean they’re great, just expensive), or for some genuinely better construction, while sometimes you're paying for distribution and overhead. Sometimes you're paying for an inefficient development process and sometimes you’re paying for scarcity, or both.
The final question is what are you looking to get and what are you actually getting for the difference?