fbpx
Get No B.S. Tips For Your Fashion Business >>
Search

Costing and Pricing Your Clothing or Accessories Line – My Big Mistake

costing and pricing your fashion line for profit
The Jane Hamill boutique in Chicago

It was 2 days before my boutique’s grand opening. Every item in my store was designed by me and manufactured in small sewing factories in Chicago. I was thrilled and terrified at the same time.

I never really planned to have a retail store. It was more the designing and selling I was interested in. I opened a boutique based on advice I got from my friend Marcos, a classmate of mine friend from F.I.T. He owned a womenswear line in NYC and mentioned to me one day, “Ya know Jane, if you really want to start a business and have a life, you could open a small store, design whatever you want in the back, and keep it simple. It’d be a lot easier than doing a wholesale line.” Bam!

He had me at EASIER and DESIGN WHATEVER YOU WANT and I started the hustle to have my own shop at the age of 25.

There were definite advantages to starting out this young:

  1. I lived on the cheap since I was willing to live in a rather dingy studio with a view of the police parking lot (which of course was 24/7 and loud as heck)
  2. I didn’t have much to lose and I figured if it didn’t work out I could always waitress
  3. I had loads of workers willing to help paint my store as long as I provided beer and pizza
  4. I thought like a 25 year old – which was GREAT in the sense that I was innovative and willing to try new things

Certainly there were disadvantages:

  1. I had very little experience so I had to make mistakes on my own time and money
  2. I couldn’t get a loan for the business since I had no collateral
  3. I thought like a 25 year old – which was NOT GREAT in the sense that I thought my reality was everyone’s reality

And this 25 year old thinking is what helped me screw up the costing and pricing of my line. You see, when I priced my line I couldn’t imagine that someone would pay more than I would for something. My life-stage had a big impact on what I thought the market would bear in terms of price.

If I wouldn’t pay $250 for a dress and my friends wouldn’t pay it either, I thought no one would. I made the mistake of putting my values about what something is worth on others.  I meet with hundreds of designers in my work and this is a huge issue that holds them back and messes with their heads. for me, there was also the issue that I didn’t have the real, deep-down, in-my-core confidence in my product yet

Therefore I priced so I could give my customers “a good deal”.  On some level, all of us play this same game in our heads. We have this dialogue in our brain that goes something like this…

  • Is my product really worth it?
  • Who would pay the same for mine as they would for (fill in the name of a well-known brand)?
  • I’ll just price it low to start and then raise the prices as I make a name for myself

So back to my big grand opening…

Luckily for me, a fashion industry insider (and my unofficial mentor) visited my store 2 days before I opened my business. She noticed my pricing and told me, “Jane, you are selling these things at wholesale prices! You’ll be out of business in 6 months!” What the whaaaaa? Really? After I stopped panicking, I realized I knew she was right.

I wanted the business to succeed SO BADLY that when it came to costing and pricing my fashion line, I was buckling. But the truth is, why under-price? There’s no way to have “proof of concept” if the prices are too low to make a living. The test of my business would be to price things fairly (not my scared-y cat pricing) and see what happened.

So I doubled the prices on everything the day before my launch. DOUBLED. It was probably the scariest thing I ever did in my life. I mean, the day of the opening I was down to $432 in the bank, I NEEDED things to sell. But I just held my breath that customers would still buy at the new prices. And I figured it was better to put it all out there and take the risk now. Do or die.

Customers did buy (huge sigh of relief, just huuuuuugggeee), my grand opening was a huge success, and my business thrived until I sold it 14 years later.

Even just writing this story brings back the terror of those days. Yes, it felt like terror.

So here’s what you can do to avoid this costing/pricing dilemma.

  1. Use a good cost sheet and trust the numbers
  2. Do some serious research on who your competitors are and make a grid listing each company, their competitive advantages and disadvantages, and pricing
  3. Price your product to make a profit no matter what. If you price low with the intention of raising prices later, you risk having to find a whole new customer base!

I still think about my mentor and how she SAVED my butt! Thank goodness for people who will be truly honest with us.

So whaddaya think? I have 2 questions for you.

  1. Are you playing mental games with yourself about your pricing like I was? What issues are you struggling with?
  2. Do you want me to create a detailed mini-course for costing and pricing your fashion line? If the answer is YES, leave it in the comments below. If I get enough votes in the comments for the costing course I’ll do it. If not, I won’t.

UPDATE: “Costing and Pricing Your Work” online workshop recording is available now ($47). Learn the “pricing formula”, markups, wholesale vs. retail, what goes in a cost sheet, etc. You’ll also get a downloadable Cost Sheet Template with different formulas and markups pre-loaded for you to use.

Click here to check out the pricing workshop: 

https://fashionbrainacademy.com/live-training-costing-and-pricing-your-work-for-profit/

Thanks for reading!

Jane

Share:

Facebook
Twitter
Pinterest
LinkedIn

39 Responses

  6. Yes, please! Pricing is such a tough topic and I have underpriced myself for the exact reasons you listed above. Thanks!!

    Reply

  8. Please!!!!! There are so many different practices out there! Hanging in- NEED THIS INFO – THANKS,JANE

    Reply

  10. I started with wholesale items at my boutique and when I marked up the items at triple the wholesale (which is what I was taught at school to do) it would be outrageous. So I doubled and even that seemed too expensive. My business definitely went down quick. It seems like wholesalers are already selling at retail prices. And with the reduced sizing I would sell the larger sizes but the smaller ones I would have to reduce sometimes even below wholesale price because it would fit a 12 year old which no parent would spend $52 on a top for a bearly teenager. Pricing is everything because I wish I would of had a mentor back them to guide me thru those questions but unfortunately I ran out of money before being abler to adjust the areas that I needed.

    Reply

  12. Yes! I really need this. Think I am playing mental games with myself when it comes to pricing.

    Reply

  15. Jane,

    Great post, but I’m an accountant so I did this to my product pretty early on. My problem is one that you mentioned… I know what I need to price my product in order to make a profit, but my immediate family (who are WalMart shoppers) think my prices are ridiculously high. They always compare my work with fast fashion prices. When I explain how I arrived at my price, they understand it, but I have more in materials than they want to pay. So my customers are none of my friends or family! My question is… How do you combat this cheap, throw away mentality? Or do you just ignore it and focus on your target audience, who are people you don’t know?

    Reply

    1. JoJo
      I’m so glad for your post
      I find myself in the same situation all the time. We just launched our new swim wear line. As designers we know all the steps that we have to take to get a finished product . it’s not just the money we spend on material getting patterns and samples done and going to production. Its time consuming . it’s hours and days communicating with others that are involved in getting things done. People just don’t get it. And yes family and friends are the worst!! We don’t even talk about our business anymore . when they ask we just say . keeping busy doing ok!!
      What’s drives me crazy they love our swimwear styles we tell the price ,then we hear things like Oh NO I would not spend more then. $ 30.00 dollars . my answer has been that our swimwear is not for you.
      What’s important is finding our target market. Those who can appreciate a one of a kind product.

      Reply

      1. I don’t sell fashions, but I do sell fashion fabric and teach sewing, I get it! People only want to pay for cheap crap out of a bin. They come in my boutique and expect great fabric to be $2-3 a yard! Come on! I went into business because I was tired of trying to make my own great fitting clothes out awful big-box store fabric but all folks want to do any more is “craft”. The ones who do want to learn to sew want to learn it off a youtube video. Or they want to go to community college where its subsidized in a room with 25 other people and one teacher, maybe 4 working machines. An uphill battle.
        I would love to have this class on pricing, it is one area that isn’t taught in business school. They just discuss marketing your products and services. When you break down for people what goes into your pricing so many just get glassy-eyed.

        Reply

  22. Yes, I’m not even sure that I can afford to attend it, but you’ve always covered the BEST information for all of those like my self who need GOOD answers. Also, as you can see above – so many of us are in such need and would so appreciate any and all information about pricing. It’s one of my brick walls right now.

    Reply

  26. Jane,

    YES!!! I need, we need more advice on how to rock pricing!

    Your material is so valuable, I can’t wait to take a few courses from you!

    Amanda Jane

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

On Key

Related Posts