How To Price Your Product

One of the most common questions we receive is: How should I price my products? 

The short answer is: It’s all up to you. It’s your clothing business. However there are a few common strategies you can use to figure it out. Here we’ll go over three different strategies for pricing your sportswear.

Price = cost + profit

Price – determined by market

Cost – controlled by you

Profit – make sure you always make one.

Pricing strategy 1

This strategy is based on your target cost. The target cost is the price you pay for producing the garment. Then you add your desired margin to that cost to calculate the retail price. The margin should typically cover all your costs, both fixed and variable. If your margin doesn’t cover your costs you will soon be out of business. As a rule of thumb you should aim for at least 50 % margin.

Target cost

To facilitate your product development you should figure out your target cost before you start contacting manufacturers and suppliers. By knowing your target cost you know what fabrics and trims you can afford, as well as how much you can spend on the actual manufacturing cost. To recap the ways the manufacturers give their prices, read Reality Check! The Garment Price. Knowing your target price before contacting suppliers and manufacturers will also give you a more professional impression, which will benefit you in the long run. And you want to build a long-lasting relationship that is based on transparency and honesty.


The margin is what keeps you in business. The margin should give you enough money for you to reinvest in your business and for you and your business partners to live of. It should also cover all your production costs and overhead. Read Piggy Bank Check. Get on the numbers. to get ideas of costs you need to account for. For a more detailed breakdown of the costs, get our Expenses / Budget / Cashflow Spreadsheet Template.


Advantages of strategy 1

  • You don’t need to do much market research.
  • It guarantees the margin you want.


Disadvantages of strategy 1

  • It requires you to know your margin and target price
  • It doesn’t take the market and competitors into account.
  • It could give you a too high market price leading to no sales or an undervalued price.


Price your garment to match the quality and don’t forget to make a profit. If not, this will only be an expensive hobby and not a thriving sportswear business.

Pricing strategy 2

The second pricing strategy is about positioning. One of the first things we recommend you to do when you are starting up your sportswear label is to perform a thorough market scan. You can read more about it in our article Do Something Different – Market Scan. Get to know what’s out there, who the competitors are, who is doing well and who isn’t, what are the prices, and what would make your brand different. By looking at the price of similar products you can set a baseline for you to adjust. You will position yourself in regards to all the other products on the market.


Advantages of pricing strategy 2

  • It is quite simple to find out the prices of your competitors.
  • There is a big chance the prices are validated with the market.


Disadvantages of pricing strategy 2

  • It doesn’t guarantee you the margin you desire.
  • You compare yourself to brands who have a different and possibly unknown business set-up. They can have different production volumes, margins, and strategy.


Pricing strategy 3

Create a premium label. You are setting your price based on premium factors such as quality, exclusivity, customer service, and brand image. You are setting a fairly high price to reach a niche group of people, trying to achieve a certain level of prestige.


Advantages of pricing strategy 3

  • It can give you high margins and larger profitability.
  • Your brand can be perceived as higher quality.


Disadvantages of pricing strategy 3

  • You limit your customer base.
  • It requires a lot of marketing and brand positioning.
  • Sets higher demand on your brand in terms of quality and service.

No matter if you use one of the strategies above or a completely different one, it is important to go back to your numbers regularly. You should at least go over your numbers first when you are making your budget, then when you receive your samples, and once again when the bulk production is done.  Price your garment to match the quality and don’t forget to make a profit. If not, this will only be an expensive hobby and not a thriving sportswear business.