HOME 2017-12-01T16:03:09+00:00

ricing a product is both an art and science. Juggling between remaining profitable and being competitive at the same time is not an easy balance to achieve.

None the less, pricing should be approached with an experimental attitude coupled with an intuitive feel for how you would like your brand or product to be perceived. Price your product too low and you can get an avalanche of sales but might consider closing up shop because you are making losses after doing the math. Price your product too high, and it gives the impression of luxury and exclusivity which may attract well off-clientele willing to pay a higher price, but you may lack volumes.

You must weigh which direction will lead to profitability, high priced products and low volumes or low priced products and higher volumes. If your store has a different range of products, then your approach can be marking some up while pricing some low to attract both price sensitive customers, as well as wealthier clients who comfortably buy the higher priced range of products.

Let’s explore some pricing strategies that you could use in order stay afloat and a step ahead of your competition.

1. Multiple pricing

You have most probably come across this tactic which is popularly used for electronics and groceries. It is where a retailer bundles up multiple products for one price the goal being to sell more than one product for a single price. For example, buy a TV and a DVD together instead of buying each separately.
It is also applicable in apparel especially for underwear, socks, and t-shirts

This pricing strategy creates a higher perceived value for a lower cost which can ultimately lead to driving higher volume purchases

You might be in danger of creating cognitive dissonance for your consumers when you bundle up products because you will have trouble selling them individually at a higher cost.

2. Discount pricing

There is probably nothing that consumers appreciate more than seasonal pricing, rebates, and any other promotional related mark-downs.
It is a sound pricing strategy if your objective is to;

  • Increase foot/online traffic to your store
  • Off load unsold inventory
  • Entice a more price sensitive group of consumers

Great pricing strategy for increasing store foot fall and for getting rid of out of season inventory

Should not be used too often as it may give consumers the impression that you are a bargain retailer and hinder them from purchasing your products at regular prices

3. Keystone pricing

This is simply the doubling of the wholesale price to come up with the retailing selling price. The challenge with this pricing method is it cannot fit the many different scenarios that are presented by the market landscape. Chances are high you could sell yourself short in cases where the market factors are in your favor. For example, if the product has a slow inventory turnover or is unique and scarce in some way then you could get away with a higher markup. But if your commodities are readily and easily available then keystone pricing would be much harder to pull off. 

Pros Works as an easy and solid benchmark that ensures an ample profitability margin Cons Depending on availability and market competition, it is usually unreasonable for the retailer to markup his products that high. No strategy is right or wrong. Choosing one over the other for your clothing store, whether online or offline should be dependent on whether market factors are favorable for that particular strategy.

 Don’t have a store to sell clothes online? checkout this link for more information!


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