This is my first post. I have been visiting this site and soaking up the knowledge for a few months now but have not had any questions that I couldn't find answers for in the search. Well... until now.
I am starting a brand of infant and toddler clothing and accesories. We are screen printing designs on toddler t's and infant onesies. Here is my situation... Will charging too little compared to the competition cheapen the brand and make people scared to purchase from us? Using the double for wholesale and quadruple for retail formula puts us at under $10 retail for onesies and toddler t's. The nearest online competition is around $16. Should we bump up the price to say $12.99 each? Or, utilize the "double, Quadruple" formula and sell overly cheap?
If we sell at $12.99 we are still undercutting the competition. But, will $12.99 versus say $8.99 cut into our sales? Our line is still being printed and our site won't be up for another 6 weeks or so. Has anyone else ever been in this situation? Any input would be greatly appreciated.
I dont know much about baby clothing, but one thing I can tell you, babies grow way too fast and they would only use their clothes once or twice, so parents will be happy to find affordable clothing. Dont go too cheap, remember you need to profit. But if you can stay a little bit under the competitors you might sell a bit more. DOnt ever loose, alaways win.
I wonder if you're really comparing apples to apples here, or if in fact it's apples and oranges. I find it hard to believe that your competitors are out to gauge their customers with super inflated pricing. So are they in fact offering a higher quality product whether it is cloth or printing, or are you making an error when you're calculating your costs? I think customers will be wary of someone who is priced well below the competition and associate it with being a cheaper product, or perhaps something being wrong with it.
__________________ I am not a woman. I am a man. It's just a nickname. Honest.
I wonder if you're really comparing apples to apples here, or if in fact it's apples and oranges. I find it hard to believe that your competitors are out to gauge their customers with super inflated pricing. So are they in fact offering a higher quality product whether it is cloth or printing, or are you making an error when you're calculating your costs? I think customers will be wary of someone who is priced well below the competition and associate it with being a cheaper product, or perhaps something being wrong with it.
Apples to apples. The customers feeling wary is why I am reluctant to stick to the formula. I am able to retail for under $10 and make substantial profits. I just don't know if that's the smartest way to go. Will people take it as "too cheap" or will they embrace it? Should I bump up the price and perhaps cut into sales? Is there a middle ground maybe? Does $12 look like a lot more than $9 to a potential customer?
The whole plan all along was to produce items in our genre that the masses can afford. I think it is unrealistic to sell a onesie for $26. As "Titere Wear" mentioned above, infants don't wear things more than 2 or 3 times. Also the demographic we are aiming at doesn't typically make $100k a year and thus couldn't dress their kids repeatedly in the styles they are after if they have to pay over $20 a piece plus shipping for a single onesie.
My business partner is against raising the price from our initial $8.99 up to $12 where I think it wouldn't look so "cheap". We would still be undercutting the competition. "Too cheap" just scares me. The last thing I want is the brand to come off as "budget" or "Walmartish".
Will charging too little compared to the competition cheapen the brand and make people scared to purchase from us?
Yup. Bargain basement prices are for bargain basements (and Walmart).
Quote:
Originally Posted by 01tjay
Using the double for wholesale and quadruple for retail formula puts us at under $10 retail for onesies and toddler t's.
That's just a guide, it should never be taken as gospel.
Quote:
Originally Posted by 01tjay
The nearest online competition is around $16. Should we bump up the price to say $12.99 each?
I think so. Easier to lower your prices if you're not getting the sales than to raise them if you're not covering your overheads. You'll still be very competitive.
Quote:
Originally Posted by 01tjay
But, will $12.99 versus say $8.99 cut into our sales?
May or may not, depending on the specifics. It may even increase your sales. $4 pure profit is enough to offset a decent number of lost sales though, and a higher price point sets you up much better for expansion.
I spent a while looking through the froogle link posted above. I didn't even find anything comparable until I got into the $20 range. I'm going to push for $12. Like you stated above... I can always come down. It also leaves room for sales on particular designs that don't move well. It would be nice to still make 4x's the cost on a sale item!
Thanks everybody for helping me out with this. I really do appreciate it.
I think that it is important to realize who exactly you are trying to sell to. See you basically have 3 categories of buyers. First, is the "bargain/low priced" group, these are your classic middle to lower income groups who shop at places like Target, Walmart, etc. (me included). Second, is the group that shops at places like Carter's, Macy's, Nordstrom's, etc. (the number of potential customers tend to be lower, but profit margins higher). And finally the people who buy $50-$100 t-shirts for their infants that costs a couple of dollars to produce (the number of potential customers are even lower, but once again the profit margins are even higher). So it's really up to you which group you feel most comfortable working with.
Does too cheap of a price cheapen brand? 
I am not a woman. I am a man. It's just a nickname. Honest.
