What is the best product pricing strategy for boutiques?
Product pricing strategies help you grow your small business and increase your customer base. The word ‘price’ is both a noun and a verb. The latter is what you do to an item for sale in the boutique. If you get the pricing wrong, you can lose money. No business owner wants to lose money.
Pricing is something you need to do deliberately and with a specific process. The right strategy will attract and build customer relationships, provide more profit margins and increase revenue.
There are various pricing strategies; you cannot use the same one for every product you sell. Therefore, it is necessary to understand the different methods before making pricing decisions. Below are the five pricing strategies most commonly used by small businesses that involve buying wholesale clothing.
5 Common pricing methods
Some boutique owners price their products based on how much it costs to acquire them. They are also called keystone pricing. They calculate their expenses and double or triple that number for retail. Some use competitive pricing. Some boutique owners price products extremely high in order to promote them through sales and discounts.
You need to decide which strategy to use to achieve your business goals. Here are a few commonly used pricing methods:
1. Value Based Pricing Strategy
Value-based pricing means adjusting the price of a product according to what the customer thinks its value is. For this strategy to work, the customer should expect a higher price for the product. For example, a customer who wants to buy a Prada wallet knows that they will pay much more than non-brand wallets, even if they look identical. Brand loyalty is a very important factor.
Boutiques with established brands can benefit from this strategy. You may want to choose one or two of your best-selling products to represent your brand, such as sunglasses, underwear or jewellery. This allows you to increase the prices of these products.
2. Cost Pricing Strategy
With a cost pricing strategy, boutique owners set a consistent percentage they want to use when pricing certain products. And they apply this percentage to the amount they pay to buy the item. This method is easy, which is why many retailers choose it. However, you should also consider other strategies if they offer higher profits.
What is the best product pricing strategy for boutiques?
3. Economical Pricing Strategy
Economical pricing strategy is used when retailers focus on selling large quantities of a particular product. They charge a lower retail cost, hoping it will increase sales. Retailers with overstocked items may find this useful. If a business owner has 1,000 t-shirts for sale, they can price them at a lower cost. This method is successful when a customer is in a hurry looking for discounted items. It may also run the risk of selling only a few t-shirts, which will yield little profit. Nationwide trending products and economical pricing may yield better results.
4. Package Pricing Strategy
In a bundle pricing strategy, you sell multiple products grouped as one product. It can make your customer feel like they’re getting more for their money. Because they perceive them as discounted. However, you can set significant profit margins for each item within the package. A boutique owner might pack a hat, gloves, lip balm, and a scarf for a winter package. As long as you can organize and keep up with margins for each product, this method can be a win-win for you and your customer.
5. Psychology Pricing Strategy
Emotions are an important factor in influencing people to make purchases. So, make your customers connect their emotions to your products. Major retailers are experts at psychology pricing. They know that consumers automatically round numbers, so they end their prices with “.99.”
Why should you buy in bulk?
Whatever your pricing strategy, you should follow the basic rules when purchasing products. When you buy in bulk, you get a discount based on how many items you purchase. Successful fashion/boutique owners work with wholesale suppliers who offer quality wholesale clothing at low prices when they buy in bulk.
Bulk buying doesn’t always mean you have to buy many of the same item. Instead, you can purchase a wide variety of wholesale items to increase the number of items you purchase. Knowing the basics of wholesale is a must.
How to wholesale
There are certain tips you can follow when purchasing bulk items from a wholesaler:
Check wholesale supplier reviews and reach out to past customers online for references.
Whenever possible, visit the company to make sure they are genuine and compliant.
Build positive relationships with the wholesale supplier’s key personnel.
Don’t be afraid to negotiate price.
Find a wholesaler that offers a wide range of products such as a wide variety of wholesale jewelry,. This way, you can spend less time shopping and more time marketing.
Ask questions about shipping, deadlines, small batch purchasing and returns.
Most importantly, always consider your target customer when deciding on products for your boutique. The best wholesale supplier will want your customers to be as happy as you are.
Source:https://blog.wholesalefashionsquare.com/product-pricing-strategy-boutiques/
