Why Teeny Bikinis Have Such Big Price Tags

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The world's most expensive bikini costs $30 million. It's made entirely of diamonds and platinum, and came to prominence in 2006, when model Molly Sims lit up that year's Sports Illustrated swimsuit issue, beckoning from the centerfold in ribbons of shimmering jewels.


While I've never wanted to buy an eight-figure bikini, I do tend to like ones that are a bit out of my price range, which led me to wonder: How is it that two-pieces can be so expensive when they're so tiny?

Turns out, swimwear is surprisingly costly to make when compared to other garments. "The labor is the same as a shirt," explains Marshal Cohen, chief industry analyst at the NDP Group, "and there's only slightly less material -- a yard instead of two for a shirt -- so that's not enough of a difference to offset the price. It's the lack of ability to commoditize it or to use economies of scale."

That is, because swimsuits are a specialized item that people tend to buy seasonally -- as opposed to jeans, for example -- manufacturers don't produce as many. And because they make fewer bikinis, they can't take as much advantage of the cost savings that come from mass production, such as discounts for buying materials in bulk. As a result, it costs the manufacturers more to produce each suit.

Because the traditional swimwear season is so short, retailers quickly begin reducing their prices to keep consumers buying. But to afford those reductions, manufacturers have to set their original prices relatively high. "You have to mark it up to be able to mark it down," says Cohen.

The Well-Traveled Two-Piece


Another factor contributing to the price is what Cohen calls "the transit lifestyle of the product," that is, the series of stores that a suit moves through as the summer season ends. An example: Let's say a suit retails for $250 at a department store. No one buys it, even once it has been marked down. So the store sends it back to the manufacturer.
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The manufacturer then turns around and resells that same suit to a discount store at a lower price. That store prices it at $100. If it still doesn't sell, that retailer may also send it back to the manufacturer.

For round three, the manufacturer sells the same suit to a jobber, "someone who buys bulk, pays 10 cents on the dollar, and sells in little shops all around the world," says Cohen. Each time the manufacturer has to deal with the returned merchandise, they not only have to resell the suit at a lower price they also have to absorb the transport costs of reshipping the merchandise around the country or even the world.

But the business model only tells half the story. The other reason a bikini can be expensive is because of what the consumer expects it to do -- fit well, flatter the body, and keep us from falling out of our tops.

'When You Find a Bathing Suit That Really Fits, That's Worth It'


Most women "have a specific need," says Jen Resnick, owner of Great Shapes, a small, boutique swimwear chain in New York and New Jersey. "We just need to work with your body. It's the same as jeans: Where should it hit you? Where should it fall to make your body look the best it possibly can?"

Resnick, whose stores sell bikinis ranging from $100 to $400, believes that it all comes down to fit.

"Coming in here to shop for bathing suits is the hardest thing and the most dreaded thing by most women ... it's that important that you put something on that fits you perfectly and that you feel good in. And it's true that the quality suits definitely give you that. It's like the perfect white T-shirt, the perfect pair of jeans, it's really something you're putting on that if it doesn't fit you like a glove, you're not going to feel like it fits you like a glove."

Bathing suit manufacturers understand that. "When you find a bathing suit that really fits, that's worth it," says Kalani Miller, one half of the sister-duo behind Mikoh Swimwear, a swimwear company that burst onto the scene last year with $200 bikinis for what she calls the "high end of the middle market." "You pay for it, you put it on, and you feel that confidence that you should feel when wearing a bathing suit."

The Top and Bottom of the Market


But is that confidence worth $200, $300, $400? Depends on the individual. For the 12-month period ending March 31, 2011, the average price for a two-piece bathing suit was $22.55, which makes sense given that a whopping 25% of the market is held by Walmart (WMT), while other discount retailers like Target (TGT), T.J. Maxx and Marshall's (TJX) account for another 20% to 30% of sales.

Those shoppers, as well as the women buying H&M's $4.99 bikini tops, have clearly decided it's not.

Resnick, though, asserts that many people change their mind once they put on a high-quality suit. "A lot of times, people come in and they will totally balk at the price ... and then they put one on and leave with three .... When fit and bodies are honestly in the mix, really, as long as people leave happy and it works, there isn't really a formula you can use for price."

I disagree. I have a plan: Wait until those beautiful, expensive bikinis go through their inevitable, significant markdowns, then grab one that suits both my wallet and my body. That way, I can have my cake and eat it too. Or maybe not, if I want the thing to fit.

Loren Berlin is a columnist at DailyFinance.com. She can be reached at loren.berlin@teamaol.com. You can follow her on Twitter @LorenBerlin, and become her fan on Facebook.


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