Hi, I’m Syama, CEO of Scaling Retail, and today I want to chat with you about how to raise your prices. Now, many of you brands out there, you’ve launched your businesses and came in at maybe a lower price point because you wanted to be competitive, and now you’ve had maybe a couple selling cycles and you’re really ready to up your game. Let’s talk about how to do that.
So the first thing you really need to assess is what is your branding looking like? How is your website done? What is your social media saying about your brand? These things are extremely important for you to start to address because, ultimately, we want to figure out is your price point that you want to be at in alignment with the image and the assets that you are putting forth? Maybe yes, maybe no. The other thing you want to think about is when it comes to being priced competitively, is your pricing actually getting you further in the marketplace than raising or increasing those prices? So in the advanced, contemporary, and the luxury space, do you really want to be pushing the boundaries of that, or are you happy where you are? And really think about if it makes sense to increase your prices while potentially alienating some of your current customers.
So how do you go about this process without saying adiós to some of your existing customers and then, you know, welcoming a whole new set in with a whole new set of marketing initiatives? This is how I would do it. First of all, I would really figure out what are the bells and whistles and what are the things that I’m going to be selling that I need to be highlighting in order to warrant a higher price point? Do I… am I going to be highlighting things like the technical makeup, the artisanal quality of it? You know, what exactly are the benefits and features, and can I communicate and highlight those benefits and features to my existin customer base so that they come with me on this journey of being able to produce and create high quality products for them while getting paid the amount that that product actually needs to be paid for? So that’s the first thing. That can take place either from surveys, it can take place between a small focus group, getting on the phone, talking to a couple of your existing customers and finding out, were they actually willing to pay a higher price point if they knew all of the work and all the bells and whistles that you’re currently telling them about?
Now, the next thing to consider when raising your prices is you really shouldn’t go above 25% above your retail value, especially if you already have a pretty strong existing consumer base. And you also want to think about are you going to be introducing those prices because you’re introducing a new collection or you’re introducing a new line? Maybe you have your more accessible line and then you have a line that’s a little bit more higher price points. You don’t have to necessarily raise your prices on everything. In fact, more often than not, there are probably a couple items in your collection or in your assortment that you could probably stand to raise those prices on today. You don’t necessarily need to rise it on every single thing that you have in the collection.
Now the last thing to think about when raising your prices are, is that price increase going to translate to my wholesale business or is that really just on the retail level? Now, for your existing retailers that you are working with, I highly suggest giving them the current wholesale price and then encouraging them actually to place larger reorders because you are giving them the preferred wholesale price. For all of the new wholesalers that you do business with, you can then increase your wholesale prices for them and start to transition into a different wholesale market. So preferred pricing for those who really believed in you and were willing to kind of help you with this process as you grew your business. Now, at the end of the day, being able to have a increased retail price with the same wholesale price for you is going to be really beneficial. Your existing retailers are obviously going to welcome the increased margin on their side. And then of course for you on your e-commerce bracket, you’re also going to get so much of a better increase in your margins at the end of the day.
Raising your prices, it can be scary. It’s tough to know exactly what to do, when to do it, and the right landscape. For those of you guys who have not priced your results correctly to begin with, there are ways out of it as a couple of the examples that I mentioned. Those of you who are struggling at this moment with determining your price points and trying to figure out where to price yourself at, I highly suggest starting with the first point that I made, which is what story and what price point is your branding telling about your product? Once you can determine the right branding and the right images, the copy, the look and feel, what you charge is up to you. I’m over at firstname.lastname@example.org. Please subscribe to the YouTube channel and head on over to Instagram, Twitter, and Facebook where you can see more of Scaling Retail. Talk to you soon, thanks. Bye.