Mask makers raise prices as material, labour costs rise amid pandemic
June 15, 2020
June 15, 2020
Kevin Vuong started to sell face masks through a newly founded company just two weeks after the World Health Organization declared the outbreak of COVID-19 a pandemic.
“We didn’t have any business plan,” said Vuong, who co-founded Toronto-based TakeCare Supply alongside a fashion designer and another entrepreneur. “We jumped in because we wanted to help.”
In March, customers who ordered a single face mask paid $9.50, but the company now sells three-packs for $37.50 – a nearly 32-per-cent increase per mask. The unit price per mask decreases slightly for the 12- and 24-packs, but it no longer sells individual masks.
TakeCare Supply is one of several Canadian mask makers that’s raised prices since the early days of the pandemic, as manufacturers adjust their business models in a relatively new space and pass growing material and labour costs on to consumers.
“A month ago, everybody and your dog started making masks, and so there was a scarcity of materials,” said Vuong, which put fabric in high demand. Before the demand spike, TakeCare Supply had been able to purchase leftover fabric from its factory partner at a lower cost.
At one point, Vuong said he paid up to 10 times more for elastic than he did in the beginning, and had to meet people in parking lots to buy elastic out of car trunks.
Adding to the cost, TakeCare Supply also switched to a 100 per cent cotton fabric recommended by new research, which proved to be more expensive.
Labour wasn’t cheap either.
In the factory where most of the company’s masks are made, they had to distance individual sewing stations, he said, meaning fewer people could work at any given time.
Despite the roughly 32-per-cent increase in price, TakeCare Supply is doing what it can to keep costs down, said Vuong. That includes bundling the minimum order into packs of three masks to save on labour costs at the warehouse and delivery level, and operating on small margins.
Kingi Carpenter, who owns Peach Berserk in Toronto, didn’t anticipate much demand for her silkscreened face masks when she launched her online shop in early April.
“Because I didn’t think about it, I priced them way too cheap” she said of her initial $12 price for a ready-made or custom-print mask.
Orders were pouring in. She’s received more than 4,000 orders online since the shop launched April 2.
“I was making them at a loss,” she said.
Her cotton masks now sell for $18 for customers who don’t want to pick their pattern and $20 for those that do. For bamboo masks, the price jumps to $25 for a random pattern and $29 for customers who want to choose one. Custom prints now sell for $39.
The new prices reflect the cost of the fabric, elastic and high-quality textile ink she uses, as well as the labour cost.
Both Carpenter and Vuong insist on paying their sewers well above minimum wage.
“I think it’s very important that you’re not just paying people a living wage, but more, beyond that,” said Vuong. His dad lost his job due to COVID-19, he said, which made offering well-paid jobs to people amid a pandemic feel more personal.
Larger retailers have also adjusted their pricing.
Roots Canada first launched a cotton face mask for $18 and a salt-and-pepper pattern for $22. It donated medical-grade masks to local facilities as part of the sales.
After the first round, the company offered both types of masks for $22 as both cost the same to produce, wrote Kristen Davies, the investor contact for Roots, in an email, and donates a portion of the proceeds for every mask sold to The Frontline Fund, a charity representing Canadian hospital foundations fighting the pandemic.
“Aligning pricing to $22 each for all our mask styles facilitates this donation,” she wrote. The masks are sold out online, but the company is working to produce more.
Carpenter does not plan to raise prices again, but noted it wouldn’t be unreasonable for a small business to take a couple months to determine a price point on a new item.
“(There) was no market testing. No nothing. Absolutely nothing. We didn’t know what we were doing,” she said.
“And, honestly, we’ve only been doing this two months.”