Identify the Cost of Clothing Sold
The first step you need to take is to identify the cost of goods that you want to sell. Your direct cost needs to be identified and documented so that you will have an approximate gauge to reflect just how much breathing room you have when it comes to setting a price.
While you do want to make sure your prices are competitive, you also need to avoid basically giving your clothing away for free by undercutting your costs. Never advertise your direct costs to your customers, because this needs to be classified as one of the many confidential points of your business that you don’t disclose to the general public. Otherwise, your customers will strive to purchase the same clothing for the same bottom line price, cutting you out of the picture (image via shutterstock).
Research the Competition
Make sure that you take the time to research the pricing offered by your competition before you set your own product pricing. Keep in mind that the average customer will strive to stay one step ahead by searching for the best competitive pricing and even matching the lowest prices whenever possible.
Therefore, you need to remain two steps ahead of them by continuously researching the same thing to keep your prices competitive. Doing so will minimize the number of customers who feel the need to use a price-matching provision, because your prices will already be too low for your competitors to match (image via shutterstock).
Use Low Introductory Prices
One of the best things to do when introducing new clothing to your inventory is to start off with a relatively low introductory price. This promotional pricing is usually an effective way to spread the word to the rest of the world about your clothing as well as your brand. Over time, as additional goods are produced and then sold, this low price will continue to generate sales and allow your business to become profitable rather quickly.
As mentioned earlier, it is important for you to identify the costs of goods being sold before you set introductory prices. The goal is to make them as low as possible, but you definitely don’t want to just give away your clothing either. While you may not be able to generate a substantial profit margin, you will still be able to convert more sales and gain the trust of more customers while making sure that your company at least breaks even (image via shutterstock).
Don’t Forget about Shipping Costs
When setting competitive prices for your clothing, don’t forget about the expenses and costs associated with shipping items to your customers. The best route to take would be to offer free or flat rate shipping primarily because of how easy that would make order fulfillment and payment processing for you and your customers alike (image via shutterstock).
Instead of forcing customers to use online tools to calculate their fluctuating shipping charges, this will allow you to establish set prices in order to keep your customers engaged throughout the checkout stage. If you can’t afford flat rate pricing or free shipping when you sell clothing online, your online shopping cart should automatically calculate these costs based on the customer’s location, websites like Shopify help you do exactly just that with their robust solutions for ecommerce stores.
Check Your Pricing Periodically
A price that is competitive today can quickly become too expensive or too cheap tomorrow. It all depends on how the consumer demand for that product shifts throughout the year. Therefore, checking your pricing on a regular basis is imperative. Remember that 25 percent of your prospective customers will abandon their shopping carts if they feel as if your clothing is priced too high, so it is important to continuously check and verify that your prices are still competitive.
If you have determined that your prices are no longer competitive, then you should focus on searching for an effective way to save money on the front-end of your clothing purchases. Before deciding to find a brand new supplier, explore all available options that may exist with your current supplier instead. For example, you might be able to save a considerable amount of money by purchasing your clothing in bulk, or your company could qualify for a discounted rate due to your lengthy working relationship with that particular supplier (image via shutterstock).
Stick to Your Prices
Remember, while you want to remain competitive, you also want to stand your ground. Quality customers are willing to pay quality prices for quality clothing.
Therefore, after building rapport and successfully establishing your brand within your respective market, you will no longer have to worry as much about fluctuating your prices accordingly (image via shutterstock).