The price of various clothing includes cost and profit.
Cost: material fee, development fee, operation fee, marketing fee, labor fee, manufacturing fee.
Profit: The profit margin is the profit as a percentage of the price. The level of profit margin is related to the company’s price strategy, sales method, and brand added value.
The price of clothing products consists of production costs, development costs (design fees, planning fees, etc.), circulation costs (circulation fees, logistics fees), sales costs, and management costs.
There’re three pricing methods: 1. cost-plus pricing, 2. value pricing, 3.competitive pricing. The three methods are generally used in combination.
For example, the target of the competitive pricing method is the price of the competitor who sells similar clothing products. There are three specific measures:
- Set prices equal to or higher than competitors;
- Take slightly lower prices than competitors;
- Use the average price in the industry.
Basically, clothing companies use the cost of goods as a base, and then multiply by the “markup multiple” to determine the final tag price. First of all, a mature enterprise will have a relatively fixed markup multiple. This number comes from business verification and whether it can guarantee the company’s profitability and cash flow.
To analyze the price rules for branded apparel market . Brand clothing is divided into fast-moving consumer goods, low-end, mid-range, high-end, high-end, and luxury.
Large-scale fast-moving consumer goods brands generally multiplied by 3, the common way of low-end brands is 4-5 times of raw materials + processing, mid-range multiplied by 6-8, high-end multiplied by 9-12, and luxury goods multiplied by over 12.
It’s important to figuring out the prices and value your own brand, and by following the Pricing Strategies , you will attract the customer base who will appreciate your work.