Determining a Price Point
I am now in the process of designing and costing my first collection. Originally, I had wanted to offer an upper moderate priced collection of women’s clothing using natural fabrics. Well, I have found the numbers just don’t make sense. I started to question my desire to use fine fabrics such as silk and linen and instead use polyester and other lower cost man made fabrics. However, after extensive reading and personal debate I’ve come across a number of points that favor a higher priced product.
First and foremost, female shoppers that normally buy at the designer price point from the likes of Donna Karen and Ralph Lauren are now trading down to smaller, newer labels that offer lower price points. To be exact 26% of shoppers are turning to retailers other than where they would normally shop according to consulting firm TNS Retail Forward. Note, they are tightening the belt but not closing the wallet as may be the case with purchasers of lower priced apparel. Also, women shopping at higher price points shop more often.
What kinds of retailers will carry moderate priced goods vs. contemporary/better priced goods? Well I’ve been hard pressed to find small stores or boutiques carrying moderate priced goods. I suppose one could sell private label to catalogue companies. However, there are many more boutiques and specialty retailers such as Barney’s New York or Henri Bendel that take a risk on new designers. Of course your product has to be of a certain caliber and price point to sell at those establishments.
Apple just recently released the latest financial numbers for the company and Steve Jobs who is somewhat of an industry guru thinks Apple will be fine. Many thought Apple would lower prices considerably or offer low price alternatives. However, the only concession to a downbeat economy was the lowering of the entry price on a Macbook by a $100. Of course, a startup entrepreneur is not exactly Apple, however if there is still a market for electronic accessories costing hundreds of dollars consumers are not that bad off.
Are you debating what price point you should enter the market at? I would love to hear your thought process…
November 13th, 2008 at 4:34 pm
First of all, I really enjoy reading all yur blogs!
Yes, I am working on creating a fashionable activewear line and I want to provide a moderately priced product. I am still in the preliminary stages of my business, but the idea originated from the fact that activewear apparel is so expensive! Although I love lululemon and the Brazilian fitnesswear lines, I can’t believe workout pants (something you wear 4-5 times a week) cost between $80 to $95.
Being that I am in the age group of my target market, it is much easier to reach out to people in my age group. However, http://www.surveymonkey.com has been a great tool! . I created a survey asking my target market about activewear, price points, disappointments with current products, importance of brand vs. functionality etc. For someone starting their business with minimal financial resources, I have found this to be useful tool. You can create your own questions and the website collects and analyzes the information for you. It has been a great way for me to reach my niche market and ask them about their purchasing decisions.
November 13th, 2008 at 5:30 pm
Stephanie,
I’m glad you enjoy the blogs! I think you have a great concept as I also love lululemon but can’t bring myself to pay $80 for a pair of workout pants. Be sure to get pricing on fabric from the beginning because if you want to use fabric with special wicking properties it may get expensive.
Thanks for the survey monkey suggestion. I have heard of it, but have yet to use it. Good luck with your line!