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Once you get past all the glamorous fashion shows and graphic designs an apparel company is just another business. It?s not all fun and games like it appears on these tv shows you come to know and love?.. If your already a year or so into your new business you know exactly what I mean. The grunt work of starting your own fashion line knowing minimums and setting wholesale prices. In order to profit you must do this right and maybe leave a little room for flexibility in order to negotiate deals with a retailer. Pricing goes all the way back to production cost and market value (customer should get the quality of what their paying for). If you?re selling and competing with a brand like ecko your prices should compete with theirs (t-shirts $20-24, hoodies $60-72). With that being said you not only have a profit margin but also are competitive with your pricing. If you price too high, it will not sell; if it?s too low, you lose your margin and this will eventually drive you out of BUSINESS!
Your markup must cover your COG- cost of goods sold (includes all expenses related to producing the items ordered by the stores) like zippers, fabric, construction, and shipping… Indirect costs include design and development costs. Cost of goods sold is attributed to each specific item, but design and development costs, and sales, general, and administrative costs need to be divided up and allocated across the entire collection. This is a timely process, but well worth it in the long run.
When finally deciding to set your wholesale price you must also remember to set it knowing that the retailer is going to markup your wholesale price anywhere from 100% to 150% plus 20 to 80 percent, in the retail business referred to as 2.2 or 2.8?..Part 2 later on this week

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