HOW TO RUN A SUCCESSFUL FASHION BUSINESS IN NIGERIA; PRICING (PART 3)
I woke up with a nagging headache.
It was 4.30am. It was a miracle that I had slept at all following the events of the previous day.
I had barely 24 hours to complete my rent or be thrown out of my shop; my landlady had said so.
I was frustrated and angry. I was frustrated because I had spent my entire resources and youth on a fruitless venture-fashion.
I was angry because I couldn't simply quit even if I wanted to. Fashion was the love of my life and I had no idea what to fall back on if I quit.
This might not be your experience but this was mine and in one way or the other, I know we all find ourselves in frustrating situations around money in this business.
It shouldn't be so.
On pricing,
1)You shouldn't guess prices for your fashion items.
You should calculate based on what you will spend on buying materials and other costs.
E.g.
A)Imagine you don't have a sewing machine and you have to take your clothes to a sewing hub to make.
For each day, you would have to pay at least N1000 per machine. This cost usually covers electricity. Some hubs charge as much as 1500.
Put down the amount as cost of machine rent and electricity to work on the outfit. If it would take more than 1 day, multiply that amount by the number of days.
B) If you wanted to hire labor and pay per outfit, how much would you pay? Put that down as cost of labor...even if you are doing the work all by yourself.
C) Calculate all the materials you will buy to make the outfit. Include transportation cost if any.
D) Choose any amount of your choice as profit.
E)Add up A to D and you have yourself a reasonable price for your services.
2) Your prices should be low enough to attract customers and high enough to make profit.
If you are just starting out your fashion business and you want to get customers, this formula would help you get and retain good customers.
Remember, your aim is to make profit and not merely fill your shop with customers fabrics.
If you already have an existing fashion business and you want to scale up, you can work your way around the formula and numbers to suit you.
You can increase your profit margin or increase the cost of your machine rent daily. You can alter other areas.
Someone that pays 1million on rent yearly will definitely charge higher machine rent than someone that pays 150,000....or less than 1m.
I hope this post helps. Let me know some of
your challenges and what next you want me to post on.
If you missed part 1 of this post here....https://www.facebook.com/groups/191131231446029/permalink/828665821025897/
Part 2.
https://www.facebook.com/groups/191131231446029/permalink/830626954163117/
Photos; Bomber jackets from our just concluded Intermediate project defence
Eberechi Igwe
Creative Director Maison d'Erex and fashion business strategist.
