How to Price a New Product
Many people ask me for pricing advice when first launching a new product. I can only speak from experience from being in the fashion/ accessory market.
Wholesale mark up for the fashion/ accessory business is usually in the range of : “your cost + 40-50 %”
Then retail prices would be: “wholesale cost + 40-60%”, often referred to as MSRP (manufacturer’s suggested retail price).
I have also been asked about only selling online and how to price your product. Although it is tempting to sell at a low price in hopes of getting the consumer “hooked on” your product, often you can price yourself out of business…
If you intend to eventually sell your product to retail stores (wholesale) , then you should only sell your product to the public at the MSRP (manufacturer’s suggested retail price) .
This strategy will give you actual sales history and proof to retailers that the consumer will pay this amount for your product. Otherwise you can cut yourself off from any future opportunities.
If you do not have retail sales experience, then perhaps you should consider hiring a consultant to help you. Another suggestion would be to hire a sales rep that can sell to retailers for you for a commission.
July 20th, 2008 at 1:01 pm
Like the advice! Very straight forward and to the point! It sure is easier to understand then most published books or seminars…
July 24th, 2008 at 7:50 am
Sound advise!
In addition to the above, without a record of sales (at the retail price), you will struggle to convince large retail stockists or potential investors in your product(s).
If you are intent on marketing the full potential of your product, don’t undercut yourself. If you’re looking to make it quick, go ahead and risk your chances of future glory.
Regards,
Anthony Trollope @ Startup Guidance.
July 24th, 2008 at 1:22 pm
This is great advice! I was wondering though, if this can somehow be applied to advertising on the web. Any ideas on what to charge companies to advertise your site? Coming up with an advertising package seems to be my biggest roadblock these days, as I don’t have a formula on how to price it out. Any ideas out there? Please let me know.
Thanks!
August 11th, 2008 at 3:30 pm
Hi Tina,
Great advice. My partner and I are developing a clothing accessory and are trying to decide if we should do a provisional patent. I know from what I have read you were heartbroken with the copy cats out there. We don’t have a huge budget but wonder if you think this will keep the copy cats at bay until we can brand it? Any help would be much appreciated.
Regards,
Debb
August 11th, 2008 at 8:10 pm
Please read my newest blog, I talk about Patents, Trademarks, and Knock Offs…
Thanks
Tina
August 11th, 2008 at 9:38 pm
Thanks Tina, I read the blog and it really gave me alot to think about. I look forward to your next blog…You are a great inspiration.
Regard,
Debb
September 20th, 2011 at 11:14 pm
Hey would you mind letting me know which hosting company you’re utilizing? I’ve loaded your blog in 3 completely different internet browsers and I must say this blog loads a lot quicker then most. Can you suggest a good hosting provider at a fair price? Cheers, I appreciate it!