Advantages and disadvantages
Posted: Mon Jan 06, 2025 7:04 am
A Mud Jeans costs €99.95. If you lease the pants, you pay an initial fee (€20) and €5 per month for 12 months. After 12 months, you return the pants and can choose a new model that you lease again for 12 months.
So in fact you spend 60 + 20 deposit = 80 euros in a year. After that you can lease a new pair of jeans. But you can keep the jeans as long as you want. Then you pay 4 x 5 euros 'deposit'. All in all you spend just as much as you would have bought them.
Why lease?
bert van sonSo what is the reason that Mud came up with this new business model? According to Bert van Son , the boss of Mud, it is a logical continuation of the sustainability concept. They are already trying to develop as many sustainable jeans as possible by using less water, and having the fabric and trousers made locally as much as possible (Turkey and Italy).
With leasing they try to give trousers a second or maybe even third life and at the real end of the lifespan (economic or technical) to reuse the raw materials for a new pair of trousers. In this way less cotton is needed and therefore less environmental impact (water, manufacturing, transport etc.).
Sustainability
Many jeans come from the Far East (for example Bangladesh). To get your jeans here, a considerable journey has already been made (I am not considering working conditions for the moment). Making jeans is quite harmful to the environment. Approximately 8000 liters of water are used to grow one kilo of cotton (NRC checked ) . Cotton is of course the most important component of our jeans. Mud's pants are made in Italy with cotton from Turkey. According to Mud, 100% sustainable cotton is used.
Circular economy
The idea of a circular economy is not new. What is it? I will use a definition from MVO Nederland :
The circular economy is an economic system designed to maximize the reusability of products and raw materials and minimize value destruction.
The lease model of Mud jeans fits in the concept of a circular economy. But the business model of Mud is clearly different. The transaction is not one-off and anonymous, you buy the pants and pay €5 per month. Mud knows who you are, something that other suppliers do not necessarily (need to) know.
If you compare the two business models, the differences are mainly in the revenue side, the value proposition and the consumer. The traditional business model is based on a supplier who manufactures jeans himself and sells them via retail (online and stores). Mud Jeans outsources the manufacturing and ensures that stocks remain at the right level with 'just in time distribution'.
By the way, leasing jeans runs both via the philippines phone data website and via selected stores (which also sell regular Mud Jeans). These are not large chains, but rather small stores that sell sustainable clothing. In addition, less money comes in at once at Mud. If you buy a pair of jeans, a portion goes to the retailer and the rest goes to the manufacturer or distributor.
However, the clothing industry is known for 'price overshoot'. The cost price of a €100 pair of jeans is much lower, perhaps somewhere between €40 and €50. This means that for Mud, at least, the costs are covered in a reasonably short period of time (within half a year, for example). This is of course different from when the store purchases clothing and the supplier receives his money immediately. If the amount were higher (both the purchase price and the margin), a financing model would soon have to be sought if an entrepreneur does not have sufficient capital. Incidentally, the business model is not limited to jeans alone. Other items of clothing can also be leased in the same way.
Lease a jeans has advantages and disadvantages, in some cases these are very personal.
So in fact you spend 60 + 20 deposit = 80 euros in a year. After that you can lease a new pair of jeans. But you can keep the jeans as long as you want. Then you pay 4 x 5 euros 'deposit'. All in all you spend just as much as you would have bought them.
Why lease?
bert van sonSo what is the reason that Mud came up with this new business model? According to Bert van Son , the boss of Mud, it is a logical continuation of the sustainability concept. They are already trying to develop as many sustainable jeans as possible by using less water, and having the fabric and trousers made locally as much as possible (Turkey and Italy).
With leasing they try to give trousers a second or maybe even third life and at the real end of the lifespan (economic or technical) to reuse the raw materials for a new pair of trousers. In this way less cotton is needed and therefore less environmental impact (water, manufacturing, transport etc.).
Sustainability
Many jeans come from the Far East (for example Bangladesh). To get your jeans here, a considerable journey has already been made (I am not considering working conditions for the moment). Making jeans is quite harmful to the environment. Approximately 8000 liters of water are used to grow one kilo of cotton (NRC checked ) . Cotton is of course the most important component of our jeans. Mud's pants are made in Italy with cotton from Turkey. According to Mud, 100% sustainable cotton is used.
Circular economy
The idea of a circular economy is not new. What is it? I will use a definition from MVO Nederland :
The circular economy is an economic system designed to maximize the reusability of products and raw materials and minimize value destruction.
The lease model of Mud jeans fits in the concept of a circular economy. But the business model of Mud is clearly different. The transaction is not one-off and anonymous, you buy the pants and pay €5 per month. Mud knows who you are, something that other suppliers do not necessarily (need to) know.
If you compare the two business models, the differences are mainly in the revenue side, the value proposition and the consumer. The traditional business model is based on a supplier who manufactures jeans himself and sells them via retail (online and stores). Mud Jeans outsources the manufacturing and ensures that stocks remain at the right level with 'just in time distribution'.
By the way, leasing jeans runs both via the philippines phone data website and via selected stores (which also sell regular Mud Jeans). These are not large chains, but rather small stores that sell sustainable clothing. In addition, less money comes in at once at Mud. If you buy a pair of jeans, a portion goes to the retailer and the rest goes to the manufacturer or distributor.
However, the clothing industry is known for 'price overshoot'. The cost price of a €100 pair of jeans is much lower, perhaps somewhere between €40 and €50. This means that for Mud, at least, the costs are covered in a reasonably short period of time (within half a year, for example). This is of course different from when the store purchases clothing and the supplier receives his money immediately. If the amount were higher (both the purchase price and the margin), a financing model would soon have to be sought if an entrepreneur does not have sufficient capital. Incidentally, the business model is not limited to jeans alone. Other items of clothing can also be leased in the same way.
Lease a jeans has advantages and disadvantages, in some cases these are very personal.