NEED Help deciding retail price!!!

[F.K.]

Hello all,

I'm FK and I'm starting a clothing line to be launched in April and sold exclusively online.

I'm having a business dilemma. I can't decide what price my tees should go for- £20, or £25. ALL the tees are going to be the same price forever, so it's a big decision!
Basically, I'm trying to portray my brand as an upmarket, high end brand.
Everything from the fabric quality to the website, packaging and ofcourse design screams designer and reflects that image.
But I want to sell at High street prices.i.e an 'affordable luxury (ironic, I know ).
I don't feel anyone does this for casual clothes atm. I mean maybe zara, but they aren't branded as such.
You think fashion when you think of them, not so much luxury.

I think £20 is a good standard competitive price, which will carry well with a lot of people, but I'm afraid it might not allow me to be positioned where I want to be positioned or seen in the way I described above.

Also, all my stuff is going to be the same price, all tees one price, all jackets one price. Just so customers don't have to factor in price in deciding which shirt to buy.
Usually you see a tee first, decide if you like it, then check the price. But with this system, you already know the price. So any customer that's still browsing on the site is either happy with it, or checking to see if we can back it up. All those who aren't happy might just move on.

I think £25 fits the image I'm going for, and I'm sure my tees can back that up in terms of quality and design, but it could be perceived as too expensive and exclude a large number of people even before they decide to look around.

'Cause £20 and £25 have very different psychological effects. 20 is.. 20, but 25 is half of 50.

Plus I'm just starting out, the brand is new. Another thing I'm considering is starting at 20 and then eventually moving up to £25 later on most likely with a new collection.
Problem is.. this might alienate customers who are already familiar with the '£20' a shirt policy. I think the quality can back up £25, but would that make it less value for money?

What do you think?

I look forward to hearing any opinions.

Cheers

 

[BizGurl]

Woaaah slow down!

How much is it going to be to produce/package/post each item? How much profit do you want to make on each tee? I know you want to sell at high street prices, but you still need to cost it all up properly and it looks like you've just plucked numbers out of thin air based on what the high street shops may be charging. Are you able to get them made as cheaply as the high street stores?

 

[F.K.]

Sorry about the information overload. At the moment, with both prices, I'm covering all my costs. Factoring in everysingle cost and dividing by the number of units I'm starting out with, it costs me between £6 and £10 to make one tee. Variations are on number of colours, cut, fabric, etc. I won't have a profit margin as high as high street shops, but I'll be making double or more on each shirt. Plus I've funded it mostly on my own, so I don't have debts. Most of the profit will be put back in.

I wanted to charge a fairly square number since all the prices will be generic. £17 just doesn't have the same effect as £20, or £25. I've done some research, and customers are happy to pay both these prices, so I'm still left with a dilemma.

 

[Consistency]

£20 for a T-shirt!.........

I am tighter than I thought.

 

[Feature]

I have no idea what t-shirts cost these days so I won't comment on the price itself.

Just throwing in a few ideas.

• I see your dilemma of starting with £20 and then going up to £25. Why not reverse it? Start with £25, and if that doesn't work as planned either lower to £20 forever or have a discount of £5 on every t-shirt every now and then
• What about offering t-shirt for £25 as a standard price and £20 for loyal customers
• Offer t-shirts that are 'out of fashion' (e.g. last years shirts, or every pink one because this years' colour is blue) for £20

I personally am not too sure about the fixed price for every t-shirt. It doesn't give me the feeling of some shirts standing out as 'luxury' since they are all priced the same. In every upmarket, high end brand (as far as I know) there are some degrees in pricing. The higher the price of a collection, the more luxury so to speak. But honestly, when it comes to clothing I'm probably not the one to speak to Nonetheless I like your concept and I really hope it turns out the way you want it to be.

 

[JamieM]

Sorry about the information overload. At the moment, with both prices, I'm covering all my costs. Factoring in everysingle cost and dividing by the number of units I'm starting out with, it costs me between £6 and £10 to make one tee. Variations are on number of colours, cut, fabric, etc. I won't have a profit margin as high as high street shops, but I'll be making double or more on each shirt. Plus I've funded it mostly on my own, so I don't have debts. Most of the profit will be put back in.

I wanted to charge a fairly square number since all the prices will be generic. £17 just doesn't have the same effect as £20, or £25. I've done some research, and customers are happy to pay both these prices, so I'm still left with a dilemma.

From what you've said and particularly that it costs you between £6 and £10 to make one tee then I'd definitely go with £25. Like Feature said, it gives you a bit of room for promotions if need be, you could offer discount codes etc but I'd even try to avoid this if you can.

However, I think you need to think really long term about your brand position. £20/£25 a t-shirt is not an upmarket high end brand. If this is your goal you need to have confidence in it.

 

[F.K.]

I see your dilemma of starting with £20 and then going up to £25. Why not reverse it? Start with £25, and if that doesn't work as planned either lower to £20 forever or have a discount of £5 on every t-shirt every now and then

• What about offering t-shirt for £25 as a standard price and £20 for loyal customers
• Offer t-shirts that are 'out of fashion' (e.g. last years shirts, or every pink one because this years' colour is blue) for £20

T-Shirts go from anything between £5 and £60 eek these days! But standard £12-£20.
Thanks for your suggestions! They make sooo much sense! I might now use one or even all of your tips! I especially like the one about having £25 for one tee and then maybe £20 for every subsequent tee, or if you buy more than one. I think that might work.
Genius! I have concerns about the generic pricing as well, but as an advertising tool. From the people we tested, it works!

Cheers,
FK

 

[F.K.]

£20/£25 a t-shirt is not an upmarket high end brand. If this is your goal you need to have confidence in it.

Thanks for that, I agree with what you're saying to some extent. But my goal is to have every single aspect of my brand be upmarket/high end, except the price. A standard average quality tee from production to packaging costs about £3, so I've got the goodstuff to back it up. I definitely need to think more about the way I want to position the brand.

Cheers, FK

 

[deniser]

In the upmarket Greenwich market unique handprinted T-shirts go for £15-20. I think you may struggle to sell above that price.

I would also say do maybe one for £25, two for £40, three for £50. That way you are keeping your higher base price of £25 intact but making people think they are getting a bargain by buying in multiples.

 

[Philip Hoyle]

I'd go for £25. Cheapskates, bargain hunters, Primark shoppers, etc wouldn't pay £20 anyway so you can forget the cost conscious. If someone wants your T shirt, for whatever reason, whether it be quality, brand, image, etc then they'd pay £25 just as likely as £20.

 

[Deleted member 59730]

Think of it like this:-

Cost of production x 4 = wholesale price x 2 plus VAT = retail price.

 

[joiner]

Cheap and high end quality doesn't psychologicaly fit together and there have been psychological experiments conducted that prove this. As for my opinion on price- well I am far from being a trend setter but I'd pay £25 for a T that I like no problem and I wouldn't consider the T-shirt to be a high end product at that price, ironicly if I saw the same T for sale for £1 I'd prob not buy. Do some research on this subject, the brain makes many assumptions of a product quality based on it's price.

 

[TotallySport]

its going to have to be one hell of a t-shirt to get off the ground at £25, or even £20. Or your going to have to spend ALOT of money on marketing and getting the product about.

 

[Allan123]

Depends who your target market it.

I had no issue's at 17/18/19 paying £40/50/60/70 for a Lacoste/Rockport/D&G T-Shirt etc..

Skip forwards 10 years and I won't buy anything except Next & River Island gear which are normally between £7-20.

Going to even more of an extreme I know plenty of friends who don't think twice about a £400 Stone Island Jacket, or a £100-250 Paul & Shark Jumper.

 

[voyage]

Depends who your target market it.

I had no issue's at 17/18/19 paying £40/50/60/70 for a Lacoste/Rockport/D&G T-Shirt etc..

Skip forwards 10 years and I won't buy anything except Next & River Island gear which are normally between £7-20.

Going to even more of an extreme I know plenty of friends who don't think twice about a £400 Stone Island Jacket, or a £100-250 Paul & Shark Jumper.

That is insane!!! I will stick to george at asda Thank you

Thats Brand Power for you!

 

[bjg123]

Go with £25 to start and have readily available discounts regularly, will give people the impression they're getting even more of a bargain at £20. If it doesn't work, take the price down. Much easier to go down than up.

 

[joiner]

Go with £25 to start and have readily available discounts regularly, will give people the impression they're getting even more of a bargain at £20. If it doesn't work, take the price down. Much easier to go down than up.

The market that the OP seems to be trying to get into arent looking for a bargain tho.

 

[TotallySport]

Depends who your target market it.

I had no issue's at 17/18/19 paying £40/50/60/70 for a Lacoste/Rockport/D&G T-Shirt etc..

Skip forwards 10 years and I won't buy anything except Next & River Island gear which are normally between £7-20.

Going to even more of an extreme I know plenty of friends who don't think twice about a £400 Stone Island Jacket, or a £100-250 Paul & Shark Jumper.

a bit of an assumtion here, but based on the little information the OP has said, they will be mainly selling it through a new web site, with an unkown brand, with no marketing and no sales rep distributing there items with POS material.

I don't believe any of those brands you mention didn't do a lot of costly leg work before being able to sell a jacket for £400

 

[Keefy]

Go for £25 it's go good opening price for exclusive/unique tees.
It will give you room to manoeuvre. You can introduce or add a cheaper range or incentive(buy 2nd at 20 or 15) plus if you want to introduce higher priced tees, with wrap around print etc. price it will not look odd.
The other thing you need to factor in is the amount of capital you have and cash flow, you could sell out quicker at cheaper, but can you afford it or keep up with demand? You might be better making a higher return on less quantity and building a brand. Think more Henry Holland and less high street.

 

[qul]

if your research shows people are willing to pay £25 then i'd say go for it. you can always compare revenue during a temporary sale period at £20.

people will pay what they think it's worth. if you think it's worth £25 then it's all about marketing to convince your customers so that they share your belief.


I know you mentioned possibly zara, but another way of thinking about it is if your target segment didn't buy from you, which shop/brand do you think would get their money instead? and how much would this substitute charge?

 

[F.K.]

I would also say do maybe one for £25, two for £40, three for £50. That way you are keeping your higher base price of £25 intact but making people think they are getting a bargain by buying in multiples.

Yeah I actually just put that into my business plan. I think it's a great way to encourage people to buy more as well, thanks!

 

[virtuoso design]

i would go with £25, but then add an introductory offer of £5 off, giving you scope to withdraw the offer and remaing in the high end of the market that you wnat to be in.
it will also gain attention under the special offer of your cart.

 

[F.K.]

a bit of an assumtion here, but based on the little information the OP has said, they will be mainly selling it through a new web site, with an unkown brand, with no marketing and no sales rep distributing there items with POS material.

I don't believe any of those brands you mention didn't do a lot of costly leg work before being able to sell a jacket for £400

You did mention that you were assuming, but I'd be mad to think I could start an upmarket brand with no marketing/PR apart from the website. All that will definitely be put in place.

Joiner -Thanks for your comment, I see what you're saying, but the brand is being marketed as high end first and foremost and affordable after. The price comes as a pleasant addition for customers. Our market research show 30% of the people we surveyed would be willing to pay upwards of £25. Ofcourse, these are the people who have this money to spend. The issue with current designers is the level of exclusivity. £25 will be cutting some people off, but a lot less that starting out with anything higher.

I think I will start at £25 and put offers and incentives in place such as free standard delivery which I can afford at the moment. If the brand gains some recognition, then customers should be willing to pay that price. The clothes can definitely back up that price- we've done our homework

 

[patientlady]

£20 for a T-shirt!.........

I am tighter than I thought.

What the heck do I know it took till this to explain what a tee was! I thought t shirts were items given away by drinks co's!
What does it matter whether its £20 or £25 its where it fits in with the rest of the range. A £20 t shirt does not ring up market to me. If all tees are £20 and shirts are £ 30 and trousers £80 that doesnt ring up market either it just says Chinese conveyor belt to me! Sorry FK but not sure this is an idea, good luck tho

 

[alexlowe]

hugo boss, armani etc start around £35 and as you say can go up to £60 maybe higher.

I would say £25 in season and £20 out of season I dont think you will see the same demand all year round for obvious reasons.

 

[glossymagcompany]

I would certainly promote link selling rather than one-off's.

So sell the first for £27 (have 7 not 5 as, online, it's proven that a price ending with a seven sells more than ending with a five ... psychological, I'm told, but it works) and offer others at a lower price when they've purchased the first.

Capture the name and email address of every person who visits your website and send them regular newsletters all about your tees. But don't sell to them in every email newsletter, only send them to a sales letter every fourth or fifth time.

As your subscriber list grows, send out your latest tees offers to this list and you'll be guaranteed sales as you know that they are already interested in your niche.

To get them to join your newsletter, offer them a discount or free useful informational, downloadable, report based on fashion or something that involves wearing clothes. People don't normally sign up to newsletters unless you give them a reason to do so.

I have a list of 1000 subscribers in one of my niches and a good percentage will buy when I offer them something .. with the price ending in a 7, of course.

 

[psyche]

Think about perceived price also if it is cheap people can believe that is not very good quality, if is expensive people believe is good quality. generally. if it is good quality and it looks 'quality' higher price is better.

 

[JamesHall174]

How good is the quality, where are they produced for example?

Just out of curiousity how are you planning to establish your brand, the price is almost irrelevant unless you drive a desire in the consumer to want the product?

I am not being negative, I think you have a good idea and you may have all of this boxed up, I just wonder how you intend to compete with the big established brands, without a big marketing spend. It is obviously possible because new brands come to the market all the time so how do you intend to do it?

 

[Chris Ashdown]

Marketing is the whole answer, you get nought for nought, to make a name for your products you need to tell your market about it and why they should buy them

You could get a obscure pop group to wear your goods and get a few fans buy them, but hardly big sales

Most Designer clothing companies also sell to the correct type of retailer who promotes the name, The retailer is interested in a good range as long as they get good promotional backup from the designer and stock

You will find it very hard to get your goods into a higher priced retailer and also find it hard to make a web site into a famous name without massive publicity

Don't forget that as soon as you start to make it work, then the copy cats will move in, how many designer labels are originals

The price is not important be it £20 or £25 it's going to take you years to sell enough at those prices to earn a living, if you wait that long it might be a great living, but very risky

Could you not start at say 50% markup and then move gentley upmarket as your business grows and you can afford to test new things out

 

[F.K.]

So sell the first for £27 (have 7 not 5 as, online, it's proven that a price ending with a seven sells more than ending with a five ... psychological, I'm told, but it works) and offer others at a lower price when they've purchased the first.

I have a list of 1000 subscribers in one of my niches and a good percentage will buy when I offer them something .. with the price ending in a 7, of course.

I've heard about this price ending in 7 over 5 advantage, does it really work? Cause your 1000 subscribers would still buy if the price ends in 8, won't they?
Also, cause I'm selling all my tees at one price, won't £27 be less effective than £25? Or do you reckon it won't matter?

 

[F.K.]

How good is the quality, where are they produced for example?

Just out of curiousity how are you planning to establish your brand, the price is almost irrelevant unless you drive a desire in the consumer to want the product?

I am not being negative, I think you have a good idea and you may have all of this boxed up, I just wonder how you intend to compete with the big established brands, without a big marketing spend. It is obviously possible because new brands come to the market all the time so how do you intend to do it?

Yeah you make a great point. I'm sourcing the tees from here in the UK, the US and Australia through companes that have manufacturing links. Then they'll be printed here and enzyme washed and then printed in the US. In terms of quality they are top of the line- my production costs are ridiculous for a start up, but I'm not going to compromise quality for cost.

I'm having a launch event, top blogs are going to do reviews, I'm going to have ads on trgeed sites, etc. And I'm in talks with places like selfridges. So hopefully it wil grow.