Consider different strategies to set a price that’s just right both for your brand and the buyers

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Pricing is crucial for the commercial success of your brand. It has to be competitive, but still protect your profit margins. And it’s all about implementing an efficient structure by evaluating your production costs, the retailers’ potential for gain, and your competition. We’re dissecting some of the most popular pricing strategies to help you decide what works best for you.


Keystone Mark-Up Pricing


The keystone mark-up method involves adding a pre-determined percentage to the cost of manufacturing. This is a tried and tested strategy for a lot of brands, and has a formula of 2-2.5 x production expenses (supplies + labor + overhead).


Although this technique may translate to immediate profit, you still have to provide enough leeway for the retailer’s potential for profit gain. You can’t superimpose a high mark-up right off the bat and have the retailer add an even higher one afterwards. This could result in having overpriced merchandise.


Make sure you account for the stockist's mark-up, so that your pieces don't end up overpriced

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In addition to considering the buyer’s interests, you also have to be familiar with your target market. This knowledge can give you room to be flexible when it comes to adjusting the mark-up percentage depending on whether your consumer is capable of spending in your selected price range.


Competitive Pricing


With competitive pricing, you have to research other brands’ prices before setting your own. Your company could opt to price above the competition, below it, or simply match their price.


Setting a higher rate bodes well for already established and well-known labels because of their deemed exclusivity. But if you happen to have a similar aesthetic to that of your competitors, it’s all a matter of justifying your higher price with special features.


Research your competition to determine whether to beat their price or set a higher one - but always have the final consumer in mind

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On the other hand, though going for a lower price tag might be a challenge, it could spark the buyer’s interest in your collection, because they would recognize your label as one offering affordable alternatives to other designers’ work.


You can also opt to match your competitor’s pricing by keeping your own prices close to the market average. That way your company is guaranteed a share of the market, though most likely an insignificant one.




Categorizing the merchandise could help you attract buyers. A simple example would be having high-end and low-end pieces (and price points) to show retailers that you have many options with regards to items that their target market cares for.


That way, if they are hesitant about picking up your line, they could test the waters with a few simpler and cheaper pieces. And if things go well, they’ll be more inclined to purchase your higher-end merchandise.


Moreover, by dividing your products into groups, you generate excitement and awareness about your brand and the uniqueness of the styles you’re offering.


A mutually beneficial relationship between the brand and the buyer must be reinforced throughout the selling process

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No matter which pricing strategy you choose, remember – what works for other labels might not work for your own. In most cases, it’s a trial-and-error process, which might even lead to your adopting a combination of several techniques.


In any case, keep in mind that your work doesn’t stop once a buyer acquires your collection. By doing your best to maintain cooperative relationships with the retailers and supporting them in selling your pieces, you stand a chance to build lasting, profitable partnerships and fast forward your way to success.