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Wouldn't it be cheaper to only produce 500 items, instead of producing 1k, and throwing half of it away?
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Many years ago I worked in the printing industry. F.ex. a client wants 100 products of something (e.g. posters or flyers), usually it was more cost effective to produce a 1000 (or more) and then throw away 900 the client didn't need. Obviously a huge waste of material.
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Isn't that law exactly trying to avoid that kind of waste?
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Yes. But in some cases the waste will be avoided by not doing a production run at all if the minimum production quantity is too high and the law prohibits destroying the unwanted product.
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I just don't get how it is cheaper in total to produce more units and throw them away.

If you make more units, it's cheaper per unit. But doesn't it mean that waste is always a loss?

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The direct cost of manufacturing the units is only a small percentage of the total costs of the retail product. Logistics is often a bigger cost. You can create substantial economic efficiencies elsewhere in the supply chain by allowing some manufacturing waste.

Production processes that require more production and supply chain customization for each order have significantly higher costs that need to be amortized. It is cheaper to pack and ship identical boxes at the factory than to customize the contents and logistics of each box for every retailer or customer. The more variation and complexity you allow into the supply chain, the more capital infrastructure, equipment, and people you need, all of which must be amortized into the retail unit cost.

The costs of increased supply chain variability and customizability can easily exceed the cost of wasting a few units. You may have wasted hundreds of t-shirts but you also didn't have to invest the millions of dollars in systems and equipment that would have prevented that waste. These are low-margin businesses, everyone is carefully tracking and attributing these costs.

Supply chains in most industries continuously and ruthlessly optimize to squeeze out waste while trying to increase flexibility. The number of items that are produced on demand -- and therefore produce little waste -- has grown dramatically over the last couple decades. However, many goods intrinsically have long, slow supply chains which makes waste all but unavoidable.

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F.ex. in the case of flyers or other smaller print products: You will not print one product for one customer at once, but many at once (e.g. from different customers), that will share a sheet. So, e.g., you print 1000 of everything, aka 1000 sheets. If a customer needs 2000 they get two spots on the sheet. If a customer wants 4000, they get 4 spots. Now, if a customer needs less than 1000, they still need one spot for the 1000. For that customer this still will be way cheaper than doing a separate small series print.
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For printers, the cost is pretty much all in the setup. Printing 1000 copies costs about the same as printing 20.
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1k in this example would be the minimum needed to make it worth the static cost of setting up and tearing down the production run.
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> prefer to sell at full price or not at all

That really only applies to luxury designer brands where selling at a discount can dilute the brand prestige, is Gucci, Versace, etc. really destroying unsold inventory at large volumes vs. standard retailers?

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Yes. The law was motivated by reports of luxury retailers destroying their entire stock every year. Usual stores just discount stuff until it sells.
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But clothes aren't perishable, so why would you only be able to sell 500, rather than it just taking twice as long to sell all 1000?
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Fashionable clothes are perishable. "Nobody" wants to buy clothes from last season or last year.

Storing the clothes until they come back in fashion is expensive... and some materials really won't be useful after sitting for 10 years anyway. (Elastic bands really are perishable)

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> Fashionable clothes are perishable.

False. Not all apparel demand is for street cred, and non-‘season’ clothes can still be fashionable. ‘Last season’ is about wealth signaling and FOMO, and while I do love fashion as an entertainment and my hobby in design of it, the level of flux we have now in everyday clothing shapes and fabrics is openly hostile to the non-wealthy being clothed well. I don’t know if the EU’s regulations will work in full or at all, but I’m cheering them for trying.

A while back someone on Tumblr noted that they would buy and wear a full 360° hue spectrum of 360 t-shirts in spectrum order from 0..359, just to fuck with people’s minds as their shirt is the same color day after day until suddenly “wait, I thought your shirt was green” makes the people around them feel like they’re hallucinating en masse. This joke — well, it’s not a joke, this product with great fit would sell out even at 30° intervals! — T-shirts are shaped the same year after year, and fast fashion has had to resort to mining old brand imagery to try and convince people to buy them. Meanwhile, it’s impossible to find unprinted t-shirts at outlier sizes, because that’s slightly less profitable than waves of shapeless L-XL junk. Yes, I’m fine with Hot Topic collaborations, but they need to stop being the market majority.

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Because it won't take twice as long, but 10x as long. There's typically a large rush on a new design, followed by a slow tick in sales. Meanwhile you have to pay to warehouse it, pay tax on the inventory, etc.
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