When you don’t know how to price your designs, it can be scary. New fashion designers frequently make the error of underpricing their creations, which limits potential profit and can be costly to the company.
It’s not as much fun and creativity to figure out prices and the business side of things, but it’s critical to know if you want your fashion line to succeed.
Pricing Strategies for Apparel and Accessories
Finding a price plan will make pricing your designs much easier. You can employ a variety of pricing schemes, however the following are the main three:
The Backwards Pricing Approach – The backwards pricing method looks at a product’s recommended retail price (RRP) and divides it by four. You can charge that much if you can make/produce your clothes item at that price. Your supplier or manufacturer may provide the RRP, however you can calculate it by multiplying your wholesale price by 2 or 2.5.
The Keystone Markup Method — In retail, keystone markup is commonly utilised. This method calculates the wholesale price by multiplying the manufacturer’s cost price by 2 or 2.5. To get the retail price, multiply that by two. That will be your total cost.
The Method of Absorption Pricing – All of your fixed and variable costs are factored into the absorption pricing approach. It’s the cost price multiplied by 2, or 2.5, plus your overhead and profit margin.
These are only three of the many possibilities available to you. You’ll need to assess your brand and determine which pricing approach and business structure will work best for you.
Your Target Market’s Pricing
Knowing who your target market is is another crucial component of pricing your fashion creations. There are three different types of pricing:
Budget pricing consists of cheap prices that appeal to customers that choose low prices above high quality. Luxury pricing refers to high-priced items for which purchasers pay a premium for quality and brand recognition. Value pricing is in between budget and premium pricing. Consumers in this category are looking for long-lasting, high-quality things at reasonable pricing.
These distinct cost categories were developed by customer shopping behaviours, thus if something is priced very cheaply, buyers will assume low quality. They will anticipate good quality items if something is priced very high.
Remember who your target market is, how they purchase, and where they fit on the income scale when pricing your clothing. If your prices are too high or too low for your intended market, you will reach fewer people. How you price your designs has an impact on how your brand is regarded. If you want your brand to be associated with quality and prestige, your prices must reflect this.
It’s best to get your pricing right from the start, because switching halfway through can make it difficult for your business to function in its new pricing category.
If Your Best Prices Are More Expensive Than You Expected
Don’t worry if you learn that your initial price strategy was incorrect after executing your pricing approach. It’s critical to value the work you produce, because doing so will attract customers who value your work as well. Setting an accurate pricing for your work is a part of taking pride in your work and what you do. Don’t be scared to raise and put your pricing where they should be if you want to be in business and do something you enjoy.