It's no news that pricing your product right will have a big impact on your sales.
But what is pricing it right means?
This question can be even harder to answer if you are just starting your fashion brand.
There are few ways to determine the right prices of your fashion products even at that stage. It requires some research, but It all comes down to defining your market positioning, your specific target customer and the value of your product for that customer.
I hear many designers who tell me: "I can't sell my product for that price, it's too high." But when I ask them why do they think its too high? A common answer that I get is: "because I wouldn't spend that", or "it just sounds very high, no?"
Unfortunately, when pricing their products many young fashion designers judge the price as a number on its own, rather than in the context of their product and target market.
And this is usually where things start to go wrong for them.
Let me share something with you that I learned in all my years in the industry: Price is a result of product value!
Once you know what is the value of your product for your customer then the price becomes just a number, and whether that number has 1 of 3 zeros behind it, doesn't matter!
In other words, people will pay according to what they think the product is WORTH FOR THEM at the time that they buy it.
Obviously, everyone has different priorities and different needs, therefore, the value is different for everyone. This is why you really need to know everything about the person who is going to buy your product and be clear about the following:
- Why are they buying it (what problem is it solving for them)?
- How, when and where will they use it?
- What other products are currently in the market that they are buying? How much they are spending on them, and what do you offer in your product that these other products don't?
- What do they care for in their products? Do they care for brand names? Do they care for what its made out off? Do they care for how and where it's made? And how much they care for these things (re: how much will they be willing to spend to have those things?).
If you can answer these above questions clearly, you will have a very good idea of what is the value of your product from your customer's perspective which is what will guide you when determining your prices.
Here are a couple of examples:
You are walking in the desert for 2 days, you ran out of water 5 hours ago and you are obviously very thirsty and starting to worry if you'll survive. All of a sudden you see someone who sells cold water bottles for $50 a bottle, would you by it? My guess is that you'll buy more than one bottle and more so, you'll hug and kiss that person and thank him for saving your life, right?
But if you are walking in the city and can find a place to buy water every half a block, I would say you'll be willing to pay $1.5 (max) for that same bottle of water and will most likely think to yourself: what a rip off!
Ok, I know, that is an extream example so let's take it back to our industry:
If your customer lives in a small town, she is in her mid 30's, married with 4 kids and holds a mid-level job that pays 45k a year, she will most likely be willing to pay $60-80 for a dress, and this dress will be her special occasion dress.
But if that same person was single, lived in NY city, held an executive position with a salary of 200k a year she will mostly like be ok to spend $500 (and maybe more) for a dress, knowing that she can wear it to work and even after work when socializing etc. More so, if she really likes the dress she might even buy one in each color.
I think you get the point, right?
Pricing your product right is NOT about the number but about its VALUE to the customer!
Need help deciding on your brand's pricing strategy? Sign up to my costing and pricing workshop.
P.S Understanding the value of your product will help you be more effective when selling it because it will help you:
- know who is your customer which will make you focused on talking to the right customers.
- know how to communicate the value to your customers and make them see it from their perspective and why they need it.
- Feel confident naming your price.