The problem with pricing incorrectly
I have seen many designers think they are priced correctly, only to realize (once I go through their pricing structure) that they have been selling to the consumer at their wholesale price. Yikes! No wonder they couldn’t work out how to start a wholesale channel – there is no cut there for a retailer because the price is too low.
The problem with pricing incorrectly is that your audience gets used to your brand sitting in one part of the market, and if you try and double your prices in one fell swoop you will lose current customers.
You will also have problems gaining new customers, who can afford the new price, because they see you as a cheaper brand, since that’s what you have been so far.
Another problem with pricing incorrectly is that you are not making profit. I understand that you are in this business because you love it, and you’re not solely motivated by money, but wouldn’t it nice to be paid for your talent, ideas and time? Wouldn’t it be great to recoup all your costs and have money left to start marketing your line?
This is what profit does, it pays for your business to move forward, it pays for you and it keeps you in your business.
