The Beginner's Guide to Pricing Men's Streetwear Products
You've built your brand, found the perfect name, sourced on-trend menswear manufacturers, produced your product, and just when you thought the "hard work" was over, you stumbled upon the next question - how to make a trend Menswear product pricing. Now, I can totally understand why this can feel like a daunting task - after all, the price of a product can affect not only how a store operates, but also a company's bottom line.
In this blog, I will help you assess the total cost of the product, the strategic approach you choose and explore the factors affecting street wear prices, and then finally determine a rough number, or at least let you know where pricing should end.
Estimate the Actual Cost of the Product:
This is the first and most important stage in pricing your product. The total cost is not what you pay the manufacturer...it is the accumulation of what you pay to the factory, shipping, any customs clearance, VAT, design costs, and any other costs associated with producing that garment.
Many brands and business owners aren't realistic about their true costs. Once you sit down and calculate everything, you'll be very surprised how much it might be a little more than you actually expected.
Some manufacturers may make it more difficult for you to know the actual cost of the garment. For example - if you pay £10 each for a t-shirt, then £2.50 for prints, then there are additional 'surcharges' such as shipping, VAT, individually bagged items, admin fees, file conversion fees, etc, then you'll quickly realize that the £12.50 you thought the product actually cost is actually around £16! Lodyway follows a 'transparent' pricing strategy, ensuring they provide you with the most consistent prices across the board.
Choose a Pricing Strategy:
Once you've sat down and figured out your true cost, it's time to figure out how you want to play the game.
The first is simple; cost-plus pricing. There is a very basic formula to solve this problem:
Cost + Profit Margin = Price.
This is a great way to price if you want to maintain the same margins across all the products in your men's streetwear collection.
The second is; market or competition-oriented pricing. This essentially involves you finding out what your competitors are charging and then doing one of the following:
- Pricing higher than competitors: If you feel your product or service is superior to what is currently on the market, you can do so.
- Pricing in line with the competition: This may be the safer bet if you want to appeal to a larger market but still make a decent profit. One thing to keep in mind is that competitors may have lower costs and therefore may be more profitable for the same price as you.
- Pricing below competitors: Quite simply undercutting your prices, thus offering a more attractive price point and potentially stealing some of your competitors' customers.
The third is; anchor pricing. It’s a must for brands to set a “suggested retail price” and then immediately put the product on sale, announcing huge sales and attracting those who want to feel like they’re getting a good deal.
The last one is; penetration pricing. This is where a brand or business will enter the market with a below-average price point and slowly raise prices as its loyal customer base grows. This works great if you see longevity in your business, but you first have to make sure you're making some profit, and second you're working on giving consumers the reason for your price increases (i.e. improving quality)
Now, let's reverse engineer:
You now know your total costs and hopefully have decided on a pricing strategy, so the final task is to reverse engineer it. Determine where you want to be in the current activewear market, determine your strategy, and subtract your costs.
While this will only give you your gross profit margin (cost of goods - goods sold), to figure out your net profit margin (operating profit) you have to factor in all other operating costs; i.e. salaries, office space, website maintenance, etc.
Factors Affecting Streetwear Costing:
In the streetwear manufacturing industry, the business is entirely dependent on garment costing. But some key factors have a considerable impact on apparel costing. Due to its importance to the apparel business, those factors that affect streetwear costing are described below.
All the above key factors of clothing costing are discussed below:
1. Fabrication and Fabric:
Cloth costs 60% of the retail price. Find out how much it costs per yard before designing a hoodie for your next season's streetwear collection. Every element added to a hoodie adds to the retail price. Control prices by controlling manufacturing. Different fabrics also affect streetwear prices. Lodyway is close to the largest clothing fabric market in China. We can provide you with all kinds of fabrics you want, and even customize the fabrics you want
This is an important point in streetwear costing. After receiving the order, the clothing seller must confirm the correct size specification that the buyer provided in the order. Occasionally see PO sheets with different dimensions, which is not available during costing. Lodyway is a cut-and-sew garment manufacturer that can be custom-made to any size you want. Besides, we have our own database on this production line. You can provide measurements such as bust and length, and we can also grade with any other measurement points you require.
3. Fabric Consumption:
Fabric consumption is another factor that is very important to garment cost calculations. Here, the clothing salesperson must take inventory of all the fabrics needed to make the garment, such as body fabrics, ribbing, ties, appliqués, and other wasteful fabrics.
4. Fabric Color:
Here, the apparel buyer must determine the fabric color, and how many colors are available for a particular style of garment, and determine the proportion of the order quantity in terms of color by discussing it with the buyer.
5. CM (production cost):
CM or production cost must be determined after discussion with production. It depends on the number of machines and output required.
6. Jewelry and Accessories:
In this case, the streetwear buyer has to calculate the trims and accessories needed to complete the order. Here, the important point is that merchants should calculate the prices of accessories and accessories separately to reduce mistakes.
If the streetwear has been printed, then the clothing salesperson must follow a clear pattern and confirm the quality and size of the prints mentioned. This will help the merchandiser to do accurate costing.
If the streetwear has embroidery, the apparel buyer must discuss it with the supplier to determine the correct quotation. Lodyway can provide washing, embossing, embroidery, printing, flat dyeing, tie dyeing, color blocking, and more for your men's streetwear.
This is another important factor in clothing costing. When running a clothing business, most garments have a washing process. Therefore, the clothing merchandiser here must consult with the washing factory to determine the correct washing price. Lodyway uses different-weight fabrics for different customers. For example, customers of fabrics above 14oz and 16oz usually choose to wash and soften first, and then add the following chemical washing: such as 1. Denim bleaching 2. Enzyme washing 3. Pickling. When customers don't know how to choose their own weight, we can provide inspection service by customers sending photos of what they want, or we can also send physical washing samples to customers.
10. Order Quantity:
You'll see economies of scale come into play here - the higher the quantity of fabric you have, the lower your production costs will be. Buying items in bulk is almost always cheaper than buying them individually. Plan and produce your designs in a cost-effective manner throughout the production process.
11. Test Requirements:
Clothing inspection requirements are an important point of clothing cost accounting. Clothing sellers must confirm through discussions with buyers before providing final costing.
Here, the clothing merchandiser must discuss with the buyer to determine the inspection terms, that is, who will inspect the goods. If a third party checks, then who pays for them?
GSP is an important factor affecting clothing cost accounting. Apparel buyers must confirm GSP by discussing with buyers whether GSP is required.
14. Payment Term of Letter of Credit:
Here, the apparel buyer has to collect a copy of the previous letter of credit from the buyer and discuss all the terms as well as payment with the buying commerce department.
15. Business Costs:
Normally, if the L/C payment term is in sight, the shop will add 3% of the total purchase (fabric cost + accessories cost + another item cost) as a business cost. You can add an additional charge of 7.5% of the total price if the L/C is extended by 60 days, and 15% for L/Cs extended by 90 days.
Usually, in the case of buying a store, the profit is added to 20% of the CM (production cost) cost.
17. Shipping Date:
This is one of the points of discussion with buyers. Here, the apparel buyer must determine the shipping date through discussions with the production department.
No matter how good the quality and design of your men's streetwear collection are, if you don't use the right pricing strategy for your brand, you will get nowhere. It turned out poorly, with no sales, and at worst a discredited one.
Now that we've given you a detailed look at how to estimate the cost of clothing and what factors affect streetwear prices, you can now choose from a variety of pricing strategies for your brand. If you still have doubts, or you are looking for a reliable men's streetwear manufacturer, welcome to contact us.
As a custom fashion man clothing manufacturer, Lodyway cooperates with many fashion designers around the world to create different fashion brand clothing, so that everyone who pursues the trend can find the fashion brand clothing that suits them. We will carry out one-stop customization in terms of design, workmanship, fabrics, sewing, craftsmanship, etc., to meet the needs of more hipsters.