Price Transparency
A few months ago I decided I was tired of trying to fit into the luxury industry. My products are more expensive due to my use of high quality raw materials that are responsible and ethical but I did not enjoy trying to fit into a mold and prove myself to be ‘good enough’ to fit into specific stores because of my price point. I opted to change my price structure and try to reach customers more directly. I am still in a handful of stores but I consider these stores as my partners. They do not purchase items wholesale from me but in turn take items to sell on consignment at a percentage. These partners are also huge support systems and want to be a part of Rorin’s growth and my community and vision. With all of this, I decided I wanted to be transparent in my pricing and lower my price points by removing the additional mark up. Let me explain.
In traditional products with a wholesale and retail market, there are two markups. Wholesale margin and retail margin or MSRP. Below is an example of how we used to price based on traditional standard markups in a wholesale setting. You will see x2-2.5. Each product was a different markup due to salability or inventory quantities, etc. This varied and I also used this based on the amount of leather waste. If the footprint of leather wasted was large enough and could create another smaller product, I would decrease the percentage markup.
Next example is my current pricing structure. This example removes the wholesale markup entirely. Stores that partner with me take up to a 30% commission per piece sold. This updated pricing structure is how I hope to continue to move forward with my brand.
Removing the wholesale markup allows me to continue to create beautiful and responsible pieces at a lower price point to the customer without loosing money or sacrificing responsible and ethical practices. Stores that carry me do not have to purchase inventory and make the money first before paying me. That being said, most stores are not willing to move with this avenue so I have been researching other markets and selling platforms to help reach more customers! If you have any suggestions, comment below!
So what are your thoughts? I will start posting product specific transparency breakdowns on my Instagram so keep an eye out!
Salut. xx Erin
