Fashion, by its very definition, is subject to change.Trends come. Trends go.
Predicting what will be “hot” is more art than science. How do you set a price for something as nebulous as style? PriceGain has developed a unique approach to pricing fashion products that helps you match production to demand. It can revolutionize the way your company makes money.
In terms of pricing, there are two essential challenges in the fashion business:
- The lead time to design and manufacture products is long often 15 to 30 weeks.
- The window for making your sales is usually very short typically six to eight weeks.
Two Undesirable Choices
The combination of long lead times and short sales windows means that you are often left with one of two scenarios:
- You run out of stock of the best-selling items before demand is satisfied.
- You are left with unsold inventory that must be heavily discounted in order to sell it.
The elusive best case is that you sell your last item in inventory at full price, just before demand plummets. This best case is in fact so elusive that it seldom happens in practice. Fashion companies either lose sales to competitors because a top-selling item sold out early, or they are left holding the bag (literally in some cases) on unsold merchandise.
It simply does not pay to use a traditional static pricing model in the fashion business. Either case noted above is undesirable for obvious reasons.
Flexible Pricing Model Maximizes Profits
PriceGain brings a compelling vision to pricing for fashion. We work with fashion businesses to develop a flexible pricing model that allows you to adjust price to reflect actual supply and demand relationships. This lets you maximize the profits available from your inventory based on market conditions and consumer buying habits.
We take many factors into account in order to develop a pricing model for a fashion business. We conduct consumer surveys and competitive research, as well as incorporate historical sales data into a highly accurate statistical model. You can then use the pricing model to set pricing on a week-by-week level or any other frequency that is manageable for your business.
Our flexible pricing model makes it possible for us to work with manufacturers and retailers to optimize margins for both parties a clear “win-win” that leads to expanded opportunities for the manufacturer and happier customers for the retailer.