Finding the right price point for your fashion line is one of the most difficult tasks a designer can work on. So many of you fashion designers come to see me to view the collection and help you price your items.
I get it. It’s not an easy task, especially if you’re on your own.
On the one hand, you are afraid that if your price point is too high, no one will ever show up to buy your items at that price. On the other hand if your price point is too low, you’re afraid that people may think that it’s low quality. And on top of that, you might not be able to make enough profit out of your fashion line. I get it! This topic raises so much anxiety. You feel the fear just thinking about it: is it too high? is it too low? Maybe you’ve even gone a step further and you’ve showed your fashion line to some people who showed some interest. Until you mentioned the price…
Yes trying to find a reasonable price point for your fashion line can feel like a real struggle when you’re figuring out how to start a clothing line.
We need to address the main obstacles that appear during the pricing process. I observed three main obstacles that created fear around pricing your fashion line.
#1 – Get Rid Of Your Mental Limiting Beliefs
The usual traditional methods won’t tell you about this although I see it as the main difficulty you will have to overcome when you’re launching your clothing line.
It’s the first issue that holds you from pricing your line properly: you feel that you and your fashion brand are one and the same.
Since you made the collection, it feels very difficult to put a price on your own time and effort. How much is it worth? You can’t say since you find it difficult to separate yourself from your own fashion brand. I understand, it’s like putting a price tag on your own person. If you have this issue, you will probably feel as affected when people give you a Bad review, it hurts personally as if they stumped on your own heart.
To start with, you need to step back and take some distance. What you need to do here is to clear your head and act as if you were hired by your own brand to perform a job.
Second obstacle is actually a consequence of the first obstacle. Since you feel that you and your brand are one and the same, you totally lack of objectivity. So all your personal issues might reflect on your fashion brand. As a result, if you have a low self-esteem you will probably think that you work is not worth paying a certain amount. So you will probably be asking for a ridiculously low price for a beautifully made product.
And if you are, let’s say unrealistic, you will be tempted to follow a high price point although the quality and the value added you deliver do not meet the level required.
You need to get rid of those mental patterns. They usually come in a form of a little voice telling you that you don’t deserve to ask for that kind of money or on the contrary, you feel that you worked so much on your collection that no matter the market reality, your fashion line should be priced like a high end product. When you hear those voices, you have to reason yourself by saying that you cannot rely on an unverified information that is only based on fear or belief.
Once you put aside the mental limiting beliefs, you have to take care of the actual pricing analysis.
#2 – Compare your fashion line to your competitors’, criteria by criteria
If you carried out a proper market research, now is the time to pull it out. Take your analysis of your competitors and position your brand compared to your competitors. If you haven’t performed any market research yet, I’d highly recommend you do one even if it’s only to be aware of the biggest trends and risks you are facing nowadays in the fashion industry. And you absolutely need to know who your competitors are, what makes them strong and what are their potential weaknesses. Concretely what does it look like?
It means that you will have to pick a few of them, analyse their offer and compare it to yours. In the checklist that I share in the Fashion Fix Facebook group, I’ve prepared a little chart to make the comparison easier and more objective. The idea here is to compare your brand to your competitors’, criteria by criteria. When you do this work, it’s important that you don’t lie to yourself. Otherwise you’ll just end up promising a value added that does not exist and disappoint your customers.
Choose a category you will work on (T-shirt, dress, skirt, trousers etc). And be honest with yourself, don’t just evaluate your product blindly. Also to do this exercise, you need to understand and to read the quality of the work.
When you put your product category in the chart, you need to ask yourself: how do you compare to your competitors on each of those criteria? if there are criteria on which you have a low assessment, can you maybe compensate with another criteria? For example if you are not able to make your products available on as many distribution channels as your competitor, which can make your brand less convenient to access to, maybe you can argue, promote rarity and the fact that you make limited series. Maybe you can even add that it’s handmade if it’s the case.
At the end of this exercise, you will get a price range for each product category as well as a more objective assessment.
#3 – Make Sure Your Price Point Covers The Costs
In the last step, you compare the price obtained to your production costs. There are different formulas out there. The most common you will find is
Production costs X 4 = Retail price
However if in your business model, you consider selling wholesale, you need to have some room for potential price discounts and sales promotions that retail stores will ask you to apply. So in the end, that’s why you can find markup levels of 7.
But what does that mean? It means that your retail price cannot be more than 7 times higher than your total production costs.
Do you want to know how to apply this pricing method to your fashion line?
Join the Fashion Fix and download the pricing checklist to guide you through your pricing process
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