Show where the money goes - sales jump 22%
Brands that show a cost breakdown (how much goes on materials, production, people) see 22% higher sales. People trust what they can verify, and transparency signals confidence.
Quick Summary
Harvard research found that brands showing a cost breakdown, how much goes on materials, production, labour, and shipping, saw 22% higher sales compared to controls. Transparency works because it is one of the few trust signals that is difficult to fake. It signals confidence in your margins and lets buyers verify that your pricing is fair.
Add a simple cost breakdown to your product page or About page. It does not need to be a detailed spreadsheet. Approximate figures for materials, production, packaging, and shipping alongside your final price are enough. This approach works best for brands competing on quality, ethics, or sustainability, where the production story is part of the product story.
Key Finding
22%
Increase in sales seen by brands that show customers a cost breakdown of their product pricing.
Mohan, Buell & John, 2020
Everlane built a whole brand around it. Many others have dabbled with "cost per item" breakdowns. But most brands still treat their margins as something to protect and hide.
Research from Harvard found that brands showing a cost breakdown - here's what we spend on materials, here's production, here's shipping - saw 22% higher sales compared to controls.
Why transparency sells
People want to trust the brands they buy from. But trust is easy to claim and hard to earn. Showing your costs is one of the few trust signals that's difficult to fake - because it's verifiable. It signals that you're not hiding anything, that your pricing is fair, and that you're confident enough in your margins to make them visible.
The effect is particularly strong for brands that are newer, smaller, or competing on quality rather than price. "Here's what goes into making this" is a more powerful quality signal than almost any badge or certification.
What it looks like in practice
It doesn't have to be a detailed spreadsheet. A simple section on your PDP or About page that breaks down approximate costs works:
- Materials: £18
- Production & labour: £22
- Packaging: £4
- Shipping: £6
- Your price: £80
The implication: we make £30 per unit, and we think that's fair for a brand at this quality level. That's a reasonable margin. That's transparency in action.
Who benefits most
This approach works best for brands competing on quality, ethics, or sustainability - where the production story is the product story. It's less effective for pure commodity plays where no one cares how the product was made.
Research: Mohan, B., Buell, R.W. & John, L.K. (2020). Marketing Science, 39(6). Harvard Business School.
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