Pricing in any business can be a very challenging task, especially in the sewing business. A lot of us are afraid to charge what we’re worth and we end up under charging ourselves. We forget how much we invested in ourselves to acquire this sewing skill and we devalue the skill by pricing ourselves low.
The truth is you can have lots of customers and make lots of sales, but if your pricing is wrong, you won’t be making any profit. Your business will be on a loop, feeding only itself, making you a slave to your own business. Ok… that was a little extreme, but you get what I’m trying to say.
There are a two things to consider when setting your prices for your sewing business. They are;
• Experience and skill set
• Your target customer
Experience and skill set
Your level of experience and your skill, plays an important role in how you price your work. If you’re just an entry level sewer, you can’t charge as much as someone who is very experienced and would have a cleaner and better finishing than you. You’ll have to work hard to perfect your skills so your value can increase.
Note: Even if you’re still an entry level sewer, you still need to be paid for your time and labour.
Target Customer
You have to consider the type of customer you want to serve. You can’t serve everyone. The kind of customers you want to attract can help you set your prices.
There are three categories of customers;
• Low class customers; these are the cheap skates. They value quantity over quality.
• Middle class customers; these customers have strict budgets, they only let money out of their pockets if they believe the products or service you offer is of great need to them or has some form of value.
• High class customers; these are the Affluent people. They love luxury,They buy because they can. Their values are social status, Ego and Power.
Choose the kind of customers you want to attract and organise your business and price around them so you can make a profit.
For the lower class customers; you don’t have to worry about things like packaging, expensive marketing or use of quality materials. This helps keep the cost of your production low, and they can easily afford it.
For the middle class customers; a little class is needed when presenting your business or products to them. Use a nice affordable packaging, good quality pictures, quality materials and paid advertising. Do all these in moderation, so you end up with a reasonable price.
If you’re after the High class customers, you have to go all out. Your business has to portray the kind of lifestyle that they like. The way the pictures of your work are taken should speak class, your packaging should be luxury, and use very high quality materials in your works. Try not to cheat by using fake materials, these people might know, and it would be very bad for your business.
After much research on this pricing issue, I finally came up with a PRICING CALCULATION that works for me.
It is;
Expense+ Material Cost + Labour + 50%Profit = PRICE
In using this method for calculating your prices, You have to work out a monthly expenses calculation, list out the cost of materials used in making your outfits, and work out how much you charge for labour. Add up all these parameters to get your Cost of production . Work out the percentage profit from the Cost of production you got. You can start from 50% upwards. Add your % Profit to your Cost of production to get your Selling price.
For example;
Expenses for the month
Salaries – N30,000
Website domain – N1,080
Rent – N40,000
Electricity bill – N3000
Fuel – N30,000
Office supplies – N5,000
Advertising – N15,000
Transport – N15,000
TOTAL = N139,080
Let say you make 3 dresses a day
3 dresses x 31days = 93 dresses a month
N139,080 / 93 dresses
Expenses Calculation = N1,495.5
Material cost for one dress
Fabric – 3 yards – N3000
Lining- 3 yards – N450
Interfacing – 1yard – N300
Zip – 1 – N100
Thread – 1 – N50
TOTAL=N3900
Labour Cost
Pattern making – N1000
Cutting – N1000
Sewing – N1000
Ironing – N1000
Outside services – N1000
Total = N5000
Cost of Production = N1,495.5 + N3900+ N5000
= N10,395.5
Profit
This depends on you, and your financial goals. But from some research some people make it 50% and upward off the total cost of the production or service.
50% of N10,395.5 (Cost of Production)
0.5 x 10,395.5
Percentage Profit of 50%= N5,197.75
FINAL PRICE = N10,395.5 + N5,197.75
= N15,593.25
I may not use the exact figures, because of all the decimals, I’ll approximate to the nearest whole number, as we all know change is a problem in Nigeria.
If you have your own pricing calculation, that gives you the perfect pricing for profit, please do share.
Thanks for reading and Enjoy!
DISCLAIMER:
This is not the only way or the perfect way of setting your prices. This is how I do it and understand it.
XOXO!
