Reverse Price Engineering from Customer Willingness

“H&M's purchasers are skilled negotiators. While other clothing chains let manufacturing costs dictate the price to customers, H&M has turned the tables and bases their prices on what they believe the customer is willing to pay. If the polo shirt is to cost 159 kronor in the store, it is the buyers’ task to make it possible.[73](private://read/01jas9tvg84jycb27616w1f9k8/#note-73) When H&M's production manager Jörgen Andersson is interviewed by the TV team, he explains that H&M bargains as hard as it can in the poor countries of Asia.”

““When H&M's purchasers come here, they dictate a price. For a simple bra, it might be 2.50 or 3 dollars. If I cannot meet that price, I do not get the order,” says the factory manager. The Saldana factory has had to lower its prices and sometimes even take a loss in order to receive orders from H&M. "We started sewing for them last year, but this year they have reduced the price by 30 percent. The reason is that they can get garments of the same type for lower prices in other parts of the region. In business, it's the one with the lowest price who gets the order," says the factory manager in the SVT documentary.”