Knock yourself off

In What is a bridge line?, I briefly explained what this meant for glossary purposes. I’ve always meant to explain how the various price levels work and why even a small company might decide to develop various labels, lines and off shoots.

First of all, since it is common for a designer line to be knocked off by a lower cost competitor, a smart designer will often knock themselves off by creating a bridge line. If consumers can’t afford the designer line, a designer will often create a lower priced bridge and even a contemporary line to occupy the position that a knock off competitor would assume. This is why the largest designers have many product lines and of varying price points. That way, anyone can afford to buy a product with that designer’s cachet. Still, you don’t have to be producing a designer line to knock yourself off. Wherever you were, you’d target the next level down.

I realize that a lot of DEs are very small but you need to be very focused with the price point segment you’re targeting with your label (assuming you only have one). If your price points are all over the map, maybe you’re ready to develop another label and knock yourself off. You’ll always need a range of prices in your mix but if prices are too disparate, you may need to develop another label or line for those lower priced products. I don’t see this problem as much in clothing as I do in handbags and accessories. I think the people in soft goods may have more options in this area.

In summary, one way to beat out competitors who’d copy you is to put yourself in their shoes and do it first. It may be a good thinking exercise even if you don’t actually do it. Were you to use it as an exercise, what are the elements of your product that could be considered negotiable or trade-offs? Are there ways you can lower costs using less expensive inputs or processes with the goal of appealing to another segment of market value*? I’m not saying you necessarily should but it would be interesting to consider how a competitor would knock you off, it could be a jumping off place to troubleshoot and brainstorm possible cost reductions.

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*I am trying to avoid describing this in terms of “quality” because the concept of value matters more. People are not shopping for the best quality, they’re shopping for the best value. For example, no one is going to want a silk, hand made, heirloom quality graduation gown so it’s not quality that governs, but value.

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3 comments

  1. M. Smith says:

    Dear Kathleen,

    With regard to price points, can you tell me what the exact range is in dollars for each point (assuming that’s how it works)? Is there necessarily a correlation between line type and price point? I see a lot of locally made, very fashion-forward clothing around here selling for a song (15-85$ CAN), and yet people are paying double for less at the mall stores. Does this discrepency simply reflect a pervasive DE confidence problem? Is it time for a new category? DH for Design Hobbyist? I want to be confident that my prices both reflect and respect my target market but I’m not sure where the floor and ceiling are especially since there seems to be such a wierd price dynamic happening here.

  2. Alison Cummins says:

    M,

    I think a lot depends on what the articles you are talking about are. I wouldn’t consider $15 to $85 dollars “a song” for a tank top, but $15 to $85 is definitely underpriced for a warm winter coat.

    Are you asking for “exact” price points for underpants? Jeans? T-shirts? Fitted jackets? Outerwear? Once you’ve decided what you’re trying to price, I would suggest going shopping to find out who’s selling it for how much.

    Remember that maintaining a high-end store at a fashionable neighbourhood catering to the wealthy costs a lot of money. That overhead needs to be paid for out of the markup on the goods. Someone selling a similar article on e-bay doesn’t have the same overhead.

    Regarding Designer Hobbyists, I’m reminded of a little story someone told me about buying souvenirs for friends in a market in Kenya. A craftsperson was selling some trinkets he particularly liked, so he asked how much they cost. “One dollar each.” So how much would ten of them be? “[pause] Twenty-five dollars.” How can that be? Why is the per-item cost going up instead of down when I buy in bulk? “Because I can only make one a day. If I am going to make ten for you, then I need to quit my job.”

    I’m also reminded of quilts I saw for sale at a co-op near Halifax. Hand-made cathedral-windows quilts that took a year to make were selling for $2,000 to $3,000. So were machine-made quilts that were run off much more quickly. Why didn’t the handmade quilts cost any more? Because they were made during time that would otherwise be dead time. You can sit with your kids while they’re doing their homework and make cathedral windows. Or sit with someone watching a game on television. A little bit every day in snatched moments, and at the end of the year you have a quilt that you can sell for enough money to buy a new fridge. Now how cool is that? But when you’re sewing a quilt by machine you’re in your sewing room and you aren’t doing anything else. It’s not a snatched moment, it’s dedicated time. It’s your job.

    So I have no idea of what it is that your friends are selling for less than similar articles in the mall, but it’s entirely possible that whatever it is would retail for higher if they went into regular production and sold through a nice boutique.

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