Know-How Exchange : Strategy

If the stores perceive the value as too low relative to your price, you have two options: find a way to reduce your prices (get some manufacturing bids) or increase the perceived value (focus on the story about the clothing, focus not on the average store - but on the very exclusive stores, etc.).

It sounds like you didn't (a) have a true business plan when you began, and (b) didn't research the market before you embarked on this new distribution approach.

It's a little late to go back to square one, but you may not have much choice.

Who exactly is the target audience for your product? How do they make a purchase decision? Where do they learn about products in this category? How important is the retailer to their brand selection? (Do they first select a retailer and then see what that retailer offers, or do they select the brand/designer and then look for a retailer that stocks that brand?)

From a business standpoint, you really should start with the consumer and learn all you can about him/her. Then work backwards to figure out if you can satisfy consumer needs at a price that will let you earn a fair profit. If not, you're never going to be able to market your way out of that dilemma.

Side note: Whether the costs are legitimate or not is YOUR problem, not the problem of the retailers or the consumers. If they don't see value, then they're not going to pay for it. See Jay's comment above.

You are not at the right stores.

In selling to retailers, you have to understand price points. A retailer knows the sweet spot of their clients. They have a clientelle willing to spend x for this item. A store selling $350 sofas, will not be able to sell a $300 area rug to go under it. They know the price point of their client for area rugs, and will only sell suppliers that fits that criteria.

You must be lazar sharp identifying those retailers already selling dresses at your price point. They will understand the product, have established clients who won't think "the price is too high". They go into the store expecting to pay that price.

You can pay $100 for a special occasion dress or $30,000 for one. The woman looking for the higher price point wont step foot in the lower end store- -and vice versa.

At the same time your designer must look to contain costs to assure she is buying right, paying fairly for labor and any other efficiencies she can find to make sure she is competitive.

It's not unusual for stores to buy at 50% or less of retail, and if a designer is unknown, they usually ask for a bigger margin, to cover their risk.

If the problem you are having is that your designer is unknown, you need to change that before striking a deal with the retailers. Do you have a website with your designs? Testimonials from happy clients, with their photos wearing your designs? Do you have any celebrity clients you can approach to be a spokes model?

You might also want to think about doing some high-profile events. Perhaps a fashion show, where your target market, and the media, are invited.

Do something that makes the media notice you. You might want to partner with a jewelry designer, or another complimentary professional, and do some cooperative PR to get more recognition. Then go to the retail market, with your brand established.