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The WSJ has a story on what goes into the price of a shirt that shows why so many of the current batch of hot apparel ecommerce companies (e.g. Shoedazzle*, Bonobos*, J Hilburn, Warby Parker, IndoChino etc) are vertically integrated. The retail value chain has a significant markup built into both the wholesale and retail channel as can be seen here.

Vertically integrated companies can take a lot of the costs out of the system and provide a much more compelling value to the consumer while still making an attractive margin.

* Lightspeed portfolio companies

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