For 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. How do you do that?
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? Ultimately, you want to figure out your price point, so you are in alignment with the image and the assets that you are putting forth.
The other thing you want to think about is being priced competitively. Be certain your pricing is actually getting you further in the marketplace than if you raised or increased those prices. Do you really want to be pushing the boundaries of competitive pricing, or are you happy where you are? Does it makes sense to increase your prices while potentially alienating some of your current customers? How do you raise prices without saying adiós to some of your existing customers, and still welcome a whole new set, with a whole new set of marketing initiatives?
Start with Research
I would really figure out 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. Can I communicate and highlight those benefits and features to my existing customer base, so that they stay with me while producing high quality products for them? While getting paid the amount that the product actually needs to sell for? That can take place from surveys, it can take place with a small focus group, getting on the phone, even talking to a couple of your existing customers and finding out if they were actually willing to pay a higher price, if they knew all about the bells and whistles that you’re currently telling them about?
Know Your Limits
You really shouldn’t go 25% higher than your retail value, especially if you already have a pretty strong existing consumer base. Also, are you going to be introducing those prices because you’re introducing a new collection, or you’re introducing a new line? You may have your more accessible line, and then you have a line that’s a bit pricier. You don’t have to necessarily raise your prices on everything. Usually there are probably a couple items in your collection or in your assortment that you could probably increase prices on today. But don’t raise the prices on everything.
Retail Prices vs. Wholesale Prices
The last thing to think about when raising your prices is, will the price increase go to my wholesale business, or is that really just on the retail level? For your existing retailers 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 price. For 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, give preferred pricing for those who really believed in you, and were willing to help you grow your business. Being able to have an increased retail price with the same wholesale price, is going to be really beneficial.
Your existing retailers are obviously going to welcome the increased margin on their side. For your e-commerce bracket, you’re also going to get a much better increase in your margins. Raising your prices can be scary; it’s tough to know exactly what to do, when to do it, and the right landscape. If you who are struggling at this moment with determining your price points, and trying to figure out where to price yourself, I highly suggest starting with the first point that I made. 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.