Zara makes 85 percent of the full price on its clothes, while the industry average is 60 to 70 percent. Zara’s total cost is minimized because merchandise that is marked down is reduced dramatically as compared to competitors. Zara’s business strategy allows the company to sell more items at full price because of the sense of scarcity and exclusiveness the company exudes. This then translates to frequent shipments and higher numbers of customer visits to the stores, creating an environment of shortage and opportunity. For example, it operates typically 4.5 days per week around the clock on full capacity, leaving some flexibility for extra shifts and temporary labor to be added when needed. Zara also has extra capacity on hand to respond to demand as it develops and changes. That demand forecasting data is instantly funneled back to Zara’s designers, who begin sketching on the spot. Store managers communicate customer feedback on what shoppers like, what they dislike, and what they’re looking for. Designers churn out the new styles and they're fast-tracked to stores while the trend is still going strong. If a certain style or design becomes the new must-have on the street, Zara gets to work.

And it only locks in 50 to 60 percent of its line by the start of the season, meaning that up to 50 percent of its clothes are designed and manufactured smack in the middle of the season. Zara also commits six months in advance to only 15 to 25 percent of a season’s line.

Seamless zara