Pricing is one of the most important factors that dictate the success of your clothing store. There is a very good reason behind the cost of respective fashion brands and it plays a big role in where the brand stands in the market. There exists a great degree of strategy, and psychology in the pricing process. It contributes to defining the value of the product; in fact, almost everything comes second to pricing. For eCommerce as well as brick-and-mortar stores; the way the products are priced will dictate the levels of profit.
It is not uncommon for one to get the pricing of their clothing line wrong like pricing it at a wholesale price instead of a normal rate. Pricing it too high often means customers seek similar brands or clothes elsewhere and will result in loss of profit. This article goes on to provide vital tips on how to price your products and is a must-read for those who prefer to source wholesale girl’s clothing.
Tips to price your clothing line
- Working out the correct price of an item is not the easiest job; however, using the backward pricing method makes the process simpler.
- The way backward pricing works is once you have set a price for a product, divide it by 4 to establish the cost price. If the figure is something that seems appropriate you have a good place to start for pricing the product.
- Implement the keystone markup method to price your fashion products; this includes multiplying the price by 2 or 2.5. This involves finding the total cost to manufacture the product and then multiplying it by either 2 or 2.5. This is one of the simplest pricing methods around.
- Implementing the 'absorption pricing method' includes adding the cost of production for each product and also adding the overhead cost as well as any additional expenses.
- The absorption price method involves finding the cost price (which will include the cost of material and labor). It also includes calculating the overheads like admin and design expenses. This expense is then divided by the number of items. This process also involves establishing a profit margin to establish the wholesale price. In order to determine the retail rate price simply multiply the figure by 2 or 2.5.
- Since pricing plays a big role in determining the profit it is a good practice to engage in price optimization to increase your profits. This will usually involve dynamic pricing, developing a pricing strategy, etc.
- It is important to first determine where the brand is placed in the market; this is a good place to start when pricing.
- One can add luxury pricing to premium and implement budget pricing for low-end products.
- It is quite common for the manufacturers to suggest the retail price, this is often referred to as the MSRP. This is a good place to start for those who are clueless about how to price it themselves. It also helps save time and effort on this process.
- Incorporating discounts and implementing psychological pricing is a good method of increasing sales and achieving one's goals in terms of sales numbers.
- A little research into the competition is invaluable when setting aggressive price rates.
Pricing fashion products correctly is one of the toughest jobs and requires one to perform some research and calculate a few numbers prior to deriving it. The basic success of a business hangs on the way you price your products. Besides being something one can derive using simple calculating; it is also something that requires one to develop a good strategy for. The key to pricing your products well is to be flexible and also allow for dynamic rates.