Let’s talk about the math that makes or breaks fashion brands: pricing. You’ve designed something beautiful, found a manufacturer, figured out your MOQ situation, and now you’re staring at a spreadsheet trying to answer a deceptively simple question. How much should this cost?

Here’s the thing about pricing in fashion: get it wrong, and you’ll either leave money on the table or price yourself out of your own market. We’ve watched promising brands flame out because they priced based on vibes rather than numbers. We’ve also seen founders undervalue their work so dramatically that profitability became mathematically impossible from day one.

Neither outcome is fun. Let’s make sure you avoid both.

The Foundation: Understanding Your True Costs

If you’re already comfortable with cost accounting, skip ahead to the margin strategies section. For everyone else, we need to start here because this is where most pricing mistakes are born.

Your product cost isn’t just what you paid the factory. That number on your manufacturing invoice? It’s maybe 60% of what that garment actually costs you. The rest hides in places new brands often forget to look.

Start with the obvious: fabric, trims, labor, and manufacturing fees. Then add shipping from the factory to your warehouse. Don’t forget customs duties and any import fees. Include the packaging you’re putting it in. Factor in the cost of samples and development spread across your production run. Account for payment processing fees if you’re selling direct. And here’s the one that really stings: build in an assumption for returns and damages.

We call this your “landed cost,” and it’s the only number that matters when you start calculating margins. In our experience, brands that price based on manufacturing cost alone end up with margins 15-20% thinner than they expected. That gap can be the difference between a sustainable business and an expensive hobby.

The Markup Myth and Why It Fails

You’ve probably heard the old formula: multiply your cost by two for wholesale, multiply by two again for retail. The “keystone” markup. It’s simple, memorable, and often completely wrong for your specific situation.

The keystone approach assumes a world where every brand has similar cost structures, similar overhead, and similar competitive positioning. That world doesn’t exist. A direct-to-consumer brand selling through their own website has fundamentally different economics than a brand selling primarily through wholesale accounts. A luxury positioning demands different margins than a value-focused brand, even if the production costs are similar.

Let’s be real: formulas are comfortable because they remove the need to think. But pricing is one area where thinking is exactly what you need to do.

Building Your Pricing Strategy from the Ground Up

Start with your business model, not your costs. Ask yourself: Where will most of your revenue come from? If you’re primarily wholesale, you need enough margin to give retailers their cut and still make money. Most retailers expect a 50% margin or better, which means your wholesale price needs to be roughly half of the eventual retail price. Work backward from there.

If you’re direct-to-consumer, you have more flexibility but also more costs that aren’t obvious at first. Marketing spend, website maintenance, customer service, and returns processing all eat into those seemingly generous margins. We’ve seen DTC brands with 70% gross margins still struggle because they didn’t account for a 30% customer acquisition cost.

The brands that get this right approach pricing as a series of connected decisions. They determine what retail price their target customer will accept for the perceived value. They figure out what margin their retail partners need. They calculate what margin they need to cover overhead and generate profit. And then, critically, they check whether their costs allow all of this to work together.

Sometimes that final check reveals an uncomfortable truth: the product you want to make can’t be profitably sold at a price your market will accept. That’s not a pricing problem. That’s a product design problem, and it’s better to discover it before you’ve committed to production.

The Psychology of Price Points

Numbers carry meaning beyond their mathematical value. In fashion, certain price points signal quality, value, or positioning in ways that can help or hurt you.

There’s a reason so many products end in .95 or .99. It works, even though everyone knows the trick. A $79 t-shirt feels meaningfully different from an $80 t-shirt, despite the single dollar difference. Use this to your advantage, but don’t let it override sound margin math. Pricing at $79 instead of $85 to hit a psychological threshold only makes sense if you can afford the margin hit.

Consider also what your price communicates about your brand. In fashion, cheap can be a warning sign. We’ve seen brands actually increase sales by raising prices because the original price point made customers suspicious of quality. There’s a floor below which your target customer won’t believe your product could possibly be worth buying.

The ceiling matters too. Every market has a price at which customers simply won’t engage regardless of quality or value. Finding that ceiling requires research, testing, and honest assessment of your competitive positioning.

Advanced Considerations: Playing the Long Game

For brands past the startup phase, pricing strategy gets more interesting. Seasonal markdowns, promotional pricing, and volume discounts all factor into your overall margin picture.

Smart brands price with markdowns already factored in. If you know that 30% of your inventory will eventually sell at a discount, your full-price margin needs to be high enough to absorb that reality. The brands that survive in fashion aren’t the ones with the highest full-price margins. They’re the ones who understand their true blended margin across all channels and seasons.

Consider building a pricing architecture across your product line. Not every item needs to carry the same margin. Entry-level products can run thinner margins to acquire customers, while signature pieces carry premium pricing that boosts overall profitability. The goal is a portfolio that works together, not individual products priced in isolation.

And please, whatever you do, don’t race to the bottom on price. There’s always someone willing to go cheaper, and that’s a competition with no winners. Compete on design, quality, story, or service instead. Those are battles worth fighting.

The Only Formula That Matters

Here’s what we tell brands that ask us about pricing: there’s no universal formula, but there is a universal test. Can you sell enough units at this price point to cover all your costs and generate the profit you need to keep operating? If the answer is no, adjust your costs, your price, or your expectations. But don’t guess. Do the math, test your assumptions, and let reality guide your decisions.

The brands that thrive are the ones that treat pricing as an ongoing conversation between their costs, their customers, and their ambitions. They stay flexible, pay attention to what the market tells them, and never stop refining their approach.

That’s less satisfying than a simple multiplier you can apply to any product. But it’s also how sustainable fashion businesses actually get built.