Step 10: Set Your Price

Proudfoot Wearable Art

Judy Proudfoot

"I have almost doubled the prices I charge for my clothing items compared to when I first started out two years ago," says Judy Proudfoot, 45, who designs and sells handpainted sweatshirts, T-shirts and other works of wearable art in and around her town of Alexandria, Minnesota.

"To decide what to charge for my creations when I was starting out," Proudfoot explains, "I first figured out how much I would pay for each type of clothing item when purchasing it from a wholesale clothing catalog. Then, I simply added $15 for my design and painting time, and another $3 to cover the costs of having each item delivered to my home. That's how I ultimately came up with my selling prices. What I soon found out, however, was that I significantly underpriced my offerings by following this approach."

At the crafts show where she first marketed her wares, Proudfoot learned that her prices were significantly lower than those of competitors offering similar products. "Some ladies came up to me, looked at some of my prices and said, `My goodness, how can you even make these items for the low price you're charging?' I instantly became concerned. I did some shopping later that day at other displays selling handcrafted clothing items and was literally embarrassed. For example, dresses comparable to those I was selling for $59 were selling elsewhere for $90 to $95. I learned my lesson, and I immediately increased my prices to fit in a more reasonable range."

After her experience at that first crafts show, Proudfoot decided that she needed to do a bit more legwork and visited several specialized clothing stores in her area to compare prices. Today, she sells her handpainted T-shirts for $28, sweatshirts for $35, and denim dresses and coats for about $100 each. "The funny thing about this whole experience," Proudfoot says, "is that my clothing items have actually sold better since I've significantly raised my prices. I guess it's really true that people assume higher prices translate into higher quality."

Next month: Our entrepreneurs will be back to share their experiences with the eleventh step to start-up: promoting your offerings.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the March 1997 print edition of Entrepreneur with the headline: Step 10: Set Your Price.

Loading the player ...

The One Word That Will Help You Close More Sales

Ads by Google

Share Your Thoughts

Most Shared Stories

1
15 Signs You're an Entrepreneur
2
Richard Branson: 'There's No Shortcut or Magic Recipe to Success'
3
5 Ways to Make Sure Your Emails Get Opened (Infographic)
4
Marketing 101: The Art of Storytelling
5
3 Alternatives for People Who Hate Networking Events