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  Your fashion products are on their marks, ready and set to go into the market, but there is a little problem, you don’t know what price to set. Pricing is undeniably an important aspect of any business, and fashion business is not excluded. Many fashion businesses have closed down because they lack the knowledge needed in setting the right price for their business.
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When the right prices are not set, you will run at loss.

  1. Know the power of your target market

The emphasis on knowing your target market cannot be excessive. Your target market helps you to determine the classification of your product. Products in the market are either luxurious, value-based or budget items. Luxurious items are high-end products, they are for the few rich percent in the society. Luxurious items are always exquisite, produced in limited quantity and are very sophisticated. Value-based items are not too expensive, neither are they affordable. They are made for the middle class. Budget items are price friendly, they can be afforded by anyone. Your pricing should be classified according to these divisions. This way, you can direct your marketing to the group of people who can afford your prices and are your target in your fashion business. 

  1. Cost of Production

Your cost of production includes the total cost, whether direct or indirect, which you incur while manufacturing or producing your products. Before setting your price, make sure you calculate your total production cost. From buying fabrics to the amount spent on transportation and every other thing. Make sure you add everything up to the minute figure. Leave no amount out. No figure is too small or too big to be calculated. You cannot afford to not put this into consideration in deciding the price point to be placed on your product. 
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  1. Profit

The whole point of being a fashion designer or entrepreneur is to make a profit, except you are running a charity clothing organization. Your profit is your gain. It is the difference between what you earn and your cost of production. Without profit, you cannot experience business growth and development. You should determine the profit you want to gain from your sales. Ensure that it is enough to be above breaking even. Make sure your profit is not extremely overboard or underpriced.

  1. Market research

Make sure you do qualitative market research to know the value of your product. It will help you when you are fixing prices for your product. The market research gives you a clear view of how much your potential customers are ready to pay for your product. As much as market research is pertinent and important, it should not be the only criteria for fixing your price. You can do this by asking about the price of similar products in the markets or from people who are in your line of business, then fix your price in that range. If your price is way above the market rate, it may discourage your prospective customers, and if it is way below the market rate, your prospective customers may question the quality of what you are putting out there.  With these tips, you can be sure that you are not going into your fashion business venture less informed or unprepared. You can navigate the business aspect just as you have managed to grasp the creative aspect of fashion. Good luck.  Source: Startup Fashion Featured image source: iStock
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This article was first published on 10th March 2022

agbagba-bukola

My name is Agbagba Bukola. I write about the business and exciting world of fashion.

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