How To Price A Product You’ve Never Made
Where Margin Is Actually Won Or Lost
Most brands build the sample first. Cost it second. Ask what it can sell for last. That is how margin gets lost.
By the time the sample exists, almost every decision that determines margin has already been made. Fabric. Construction. Trims. Factory. MOQ.
All of it locked in before anyone ran the math.
The brands that build durable margin do it the other way. Math first. Sample against the math. The product lives inside the envelope. Not around it.
The Numbers You Work Backwards From.
Retail is set by brand position, competitive set, and what the customer will pay. Not by cost. From retail, back into wholesale at roughly 2.2 to 2.5x keystone. From wholesale, back into a target FOB that hits the margin the brand needs at its channel mix. A 60/40 DTC-wholesale brand has different math than a 90% DTC brand. The team needs to know the target before sourcing starts. Not after.
Where Margin Is Actually Won Or Lost.
Fabric selection.
The single largest cost driver and the easiest to hide. The gap between a qualified mill at volume and a specialty mill at small quantity is often 30 to 50% of fabric cost. Standardize on a core set. Design discipline here is worth more than anywhere else in the process.
Construction complexity.
Every extra seam, trim, and detail adds cost and risk. Be specific about when complexity earns its place and when it is just there.
Factory selection.
Not all factories at the same FOB are the same decision. A cheaper FOB from the wrong factory often ends up more expensive after chargebacks, quality issues, and delays.
Volume commitment.
Cost scales with volume. So does risk. Over-committing to chase a lower FOB is one of the fastest ways to create a markdown problem two seasons out.
The Pre-Production Margin Conversation.
Design, production, and planning in the same room before the first sample is requested. Target retail known. Target FOB known. Target margin at the current channel mix known. Tradeoffs flagged when a design decision is about to push cost out of range. No margin reconciliation at the end of the cycle. The math is already done.
This conversation sounds simple. It is rarely held.
The difference between brands that scale and brands that struggle is usually process. Not product.
If your team is costing samples after the product is built, that is where to start.
Swipe through for the full framework. 👇
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