How to Price Retail Clothing

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Pricing clothing competitively and for a profit can be a tricky endeavor.
Pricing clothing competitively and for a profit can be a tricky endeavor. (Image: Jupiterimages/Pixland/Getty Images)

Running a small retail clothing store or selling clothing can result in a wide range of pricing. Each business owner is looking for the balance between what their customers will pay and what the owner needs to remain profitable. Many outside factors can contribute to the final price of a garment, but a simple calculation will give you a good place to start with your pricing process.

Things You'll Need

  • Calculator
  • Access to financial statements

Calculate original cost. Cost will not always just be the amount you paid for a wholesale item, or the time it cost you to create it yourself. Did you travel to a trade show to find the item? Have you spent hours of your time setting up a relationship with the seller? Have any of your employees spent working hours acquiring the clothing? Take the wholesale cost of each item and add a labor fee. This fee need not be an exact calculation, but an approximation based on the above mentioned labor, divided by the number of items acquired at that show or with that labor.

Multiply the original cost by 56 percent. To stay profitable, most small business retailers mark up their clothing items by at least 56 percent, sometime up to 66 percent or higher. This number should give you a good starting point and minimum price.

Research your pricing at other locations. Check the prices for the same or similar items in other shops and/or online. You do not want to price anything far above what the manufacture is pricing on their website or above the price at other stores.

Follow your instincts. Factor in all of the above calculations and research and come up with a price you feel comfortable with. You are the expert on your customers and will know more than any formula what your customers will pay for an item. Also take lessons from what hasn’t sold, or only sold on sale in the past.

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