Designer Garment Pricing

What is Designer Garment Pricing?

Years ago I wrote an article on Pricing for Profits.  It was very well received in the industry and perhaps it is relevant to write another specifically for designer garments and the psychology behind the need for designer garments and there is a bit of psychology in accepting the garments for cleaning also.

The standard practice has been to accept the garments at regular price, even though they are not regular people who wear them, nor are they regularly priced when initially purchased.

For instance, let’s say the price to clean and press a pair of pants is $5.00 and the pants originally cost $50.00.  This is 10% of the cost price to service the garments after being soiled so they can be worn again.  A designer label in a ladies two piece suit may have a price tag of $1,000.00.  In order to maintain our ten percent servicing charge we should charge $100.00.  How many drycleaners could actually charge this price to clean and finish the garment?

It is interesting how a customer can buy a $1,000.00 suit and expect the drycleaner to service it for the same price as a separate skirt and jacket which perhaps, cost $100.00 for the two.  Frequently a customer will stand at the front counter and tell how much the retail price of the garment was then expect absolute perfection when she picks it up.  The slightest trace of a stain or the tiniest wrinkle can lead to a huge confrontation between the customer and the counter service representative and frequently the owner.  If the garment should be damaged, or even fit tight when returned to the customer it can lead to an immediate claim for $1,000.00 to replace the suit.  If the customer was charged $10.00 for servicing the garment it will take a long time to recoup the cost of the claim from net drycleaning revenue.  If the customer was charged $100.00 to service the suit there is more revenue to offset the claim of $1,000.00.

Progressive cleaners have been charging a “Designer Label” upcharge of 25% to whatever the market will bear.  It is not good business to process a high dollar garment for the same price as one worth 10 times less.

There are people that utilize the services of a drycleaner because they know they need clothes that are clean, reasonably free of spots, and do not stink.  They tend to buy their clothes on sale and frequently try to stay in style, whatever that may be.  They realize that clothes wear out and can get so stained they cannot be reclaimed for ordinary wear.  They wear the clothes they wear because it is what is required for their jobs, or they feel good and blend in with their peers, or that’s what their wives or boyfriends picked out for them; normal, everyday people.

Those who buy designer clothes tend to be the more affluent and need the attention of others, and especially their peers.  There are two types of affluency today, the new rich and the ones who have had lots of money for a long time.  It has been my experience that those who have had a large disposable income for a length of time will buy nice clothes with a lot of quality built-in and they also realize that everything in the world is not perfect and clothes wear out and people cannot perform miracles regularly.  They also expect to pay a reasonable price for professional care of their wardrobe.

On the other hand the new rich will suddenly be elevated to the crowd that can buy designer labels and overly expensive garments in order to make a statement.  And the statement is “Look at me, I have arrived”.  I can afford to buy these things and it doesn’t affect my lifestyle because I have money”.  This attitude frequently results in looking down on less affluent people and service people.  Being overbearing is in their vocabulary and even the slightest thing that doesn’t suit them will set them off.  These are also the ones who will tell you that their garments are very expensive and probably bought in some exotic or fashionable location.  It is obvious from their statements that they expect perfection in your work.

When a person exhibits this type of behavior at your service it usually means the person has a false image of themselves, and their egos are so fragile that they need the particular costume they have picked out in order to present the image in public as they need to project for themselves.  Woe be to the drycleaner that damages a blouse, dress, suit or whatever that this person was planning to wear to a particular function with the sole aim of impressing whomever they intended to impress.

Charging a Fair Price for your Services

Fortunately for the drycleaner the old rich realizes that they cannot get superior service for low prices and really are not too interested in what it costs to clean their clothing.  The new rich also expect to pay more to have their high priced garments cleaned and serviced.  They want nice packaging, perfect finishing and their order ready when it is promised.  They may question a price but do not go searching for the cheapest drycleaner.

Some drycleaners will simply have a separate price list for the garments listed below while specialty cleaners will do the majority of their business with the affluent crowd that will just assume the price is what it costs to have their cleaning done.  The common thread between these two different customers is that both of them want personal service.  The specialty cleaners promote their superior service constantly and frequently will tell their customers how good they look in the clothing they choose to wear.

Another reason to increase charges for designer garments is that most of them are made in short runs, meaning that if a two piece suit is made in lots of 5,000, a regular run of a high priced, designer suit may be 200.  With this short run the fabric is usually ordered to a specific color, weave and finishes.  With a short run of 200 garments the fabric isn’t going to havev  a lot of durability or serviceability testing done.  The fabric is bought, the suit is made and the garment is sold at a boutique store for a very high mark-up.  It is even worse for ladies garments as they are frequently dyed an unusual color and the dyes are made from various hand blended dyestuffs.  Occasionally one of the dyes will drop out during servicing and the garment changes color.  The label may say dry clean only, but nobody tested the garment.  There will be more damage claims on designer or high priced garments than a tested and proven, regularly priced label.

Frequently the first drycleaning will reveal the inadequacy of the fabric and customers don’t want to know about their poor choice in their wardrobe.  In this event the textile cleaner may offer to “take care of the matter” with the retailer and explain the reason for the non-serviceability of the garment.  Too often the retailer buys the garments with no guarantee from the manufacturer or importer and they will not accept any responsibility for the serviceability of the garment.  Therefore the retailer is very reluctant to refund the money from the sale.

As another example, do you remember the last time you lost a button, or needed to replace one from a designer label and had to try and locate the importer or manufacturer and attempt to have them sell you several?  It is easy to spend two to three hours trying to track down these buttons, belts, buckles or other pieces of trim that are damaged or lost.

The Tiers listed below should always have an upcharge simply due to the added risk involved in servicing.  Tier one may have the highest upcharge up to double, 100%, or more, of the regular price.  Tier two may have an upcharge of 75% above the regular price, or more.  Tier three may have an upcharge of 50% simply because of the combination of price and potentially defective garments.  A very simple way of always getting the price consistent for these garments is to make one dot on the label for Tier one; two dots for the second Tier and three dots for the third Tier as described below.  The number of dots indicates the upcharge to be applied to the regular garment charge.

Tier One Labels
Armani, Chanel, Christian Dior, Escada, Gucci, Prada, Versace.

Tier two Labels
BCBG, Benetton, Burberry, Carolina Herrera, Dolce, Gabbana  Ecko  Faconnable, Hugo Boss, Jil Sander,  Oscar de la Renta, Paul Shark, Salvatore Ferragamo,  Sisley, Ungaro, Valentino.

Tier Three Labels
Abercrombie and Fitch, American Eagle, Apple Bottoms!, Banana Republic, Calvin Klein, Diesel, DKNY, Esprit, Gap, Guess, Haggar, Izod, J Lo, Juicy, Kenneth Cole, Lacoste, Liz Clairborne, Michael Stars, Nautica, Pepe Jeans, Perry Ellis, Ralph Lauren, Sean John, Tommy Hilfiger, Van Heusen, XoXo, Undecided, Etro, Jack Victor, Mondo di Marco.

If you are going to get your proper mark-up on the designer garments listed have a list typed up and placed in your mark-in area so the ones applying the charges can be sure to add them to the various labels.  When accepting the garments the counter person should make a positive comment on how nice the fabric feels, how beautiful the item is, or how stylish it is.  The same can be done when the garment is picked-up.  There is nothing wrong with massaging the egos of the more affluent customers.
With the price of utilities, labor, rent, chemicals and supplies and virtually everything else tit takes to run a first class operation it is necessary to increase the amount of revenue in order to not lose money on each order.  This is also an excellent time to re-think your base pricing and try to keep ahead of the increasing costs of doing business.