Priced to Last: Why Underpricing Is the Most Expensive Mistake in Fashion & How to price clothing for profit
November 2026 · Pricing & Profitability: from underpriced to profitable
Last month, in Funded by Design, we talked about funding as an evidence-based response. Funders, lenders, even your own bank account all ask the same first question: does this business make money on every sale? So how do you price clothing for profit?
This month, we go straight to the number that answers it: your price.
Here's what I've seen over and over, in corporate design rooms and in independent studios alike. Talented designers build beautiful products, sell them, and still run out of money. Not because the product failed, but because they priced on hope instead of math.
That's the transformation for November: from underpriced to profitable. Not "expensive." Profitable. There's a difference, and it's the difference between a brand that lasts and a brand that becomes a beautiful memory.
The Underpricing Trap
Most emerging designers set prices in one of three ways:
What competitors charge. But you don't know their costs, their volumes, or whether they're profitable at all.
What they would pay themselves. You are not your customer, and designers are notoriously hard on their own work.
What feels safe. A price so low nobody could possibly object. Which usually means a price so low nobody gets paid.
Notice what's missing: cost. None of these start from what the garment actually costs to make and sell. Conscious brands are especially vulnerable here. Organic and certified fabrics cost more. Fair wages cost more. Small, responsible production runs cost more per unit. Then guilt about being "too expensive" pushes designers to absorb those costs instead of pricing them in.
Here's the reframe: a fair wage you can't sustain isn't sustainable. Honest pricing is part of the ethics, not at odds with it.
Inspiration: Where the Money Goes
French sneaker brand Veja says that producing a pair of its sneakers costs five times more than at a typical big brand, because it pays for fair-trade raw materials, environmental standards, and workers' rights. It covers that by doing almost no advertising, which it says makes up around 70% of a typical big-brand sneaker's cost.4 Veja didn't compete on price. It moved the money from marketing into the product, told customers exactly that, and became one of the best-known names in sustainable footwear. Your price can carry your values, as long as you can explain where the money goes.
The Price Stack
Every price is a stack of layers, and you have to pay for each one. Let's walk through a real example: a lined organic cotton wrap dress, made domestically, in a run of 150 units.
Landed cost: $98.43. Materials and trims, cut-make-trim labor, patterns and samples spread across the run, and freight.
Wholesale price: $220. That's a 55% wholesale margin, right in the 50-60% range many small brands aim for.
Retail price: $485. A boutique marks up your wholesale price, typically 2.0x ("keystone") to 2.5x. At 2.2x, this dress retails for about $485.
Shirt with hang tab in a box wrapped in tissue
Now the part almost nobody calculates. Sell that dress direct-to-consumer at $485, and it looks like a fortune: $485 in, $98 out. But you also pay payment processing (about 3%), shipping and fulfillment (about $9), and you lose some revenue to returns and markdowns (about 8%).
After those selling costs, the DTC margin is about 67%, not the 80% it looks like at first glance. If your target is 70%, this dress needs to retail at about $565 to hit it.
The takeaway: your direct-to-consumer margin is almost always lower than you think because selling costs don't show up on a materials-plus-labor sheet. One more trap hides in run size. Patterns and samples for this dress cost $1,200. Spread across 150 units, that's $8 a garment. Spread across 50 units, it's $24, and the wholesale margin drops from 55% to 48%. Small runs quietly eat your margin.
Want to run these numbers on your own designs? I built a free costing sheet that does it all. More on that below.
From Inside the Design Room
I once designed an engineered placement print for a suit—which, honestly, usually means higher costs and more fabric waste. After we shared the idea and got great feedback, our team worked with the factory to see if we could pull it off without blowing our margin or price goals.
So, we teamed up with our factory partner to tweak the pattern marker and make the most of the fabric—while keeping the engineered print looking right and staying within our cost margins. It took a lot of back-and-forth, and we leaned on the factory’s know-how to place the pattern pieces correctly without messing up the print. Luckily, they were awesome about it and put in the extra time to help us hit our margin goals and bring the design to life.
The lesson I want you to take from this: price is a design decision. It belongs in the room when you choose your fabric and your construction, not after the samples are done.
The Black Friday Question
Black Friday lands on November 27 this year, and every inbox will be shouting discounts. Before you join in, run the math on that same dress.
At full price, each DTC sale leaves about $324 after cost and selling expenses. At 30% off ($339.50), it leaves about $195. That's 40% less money per dress. To earn the same total you'd make in a normal week, you'd need to sell about 67% more dresses, and with a 150-unit run, you may not have them to sell.
Discounting also trains your customers. Every sale teaches them to wait for the next one. For a small brand built on value and longevity, that's an expensive lesson
.
So what can a conscious brand do instead?
Protect your bestsellers. If you discount at all, limit it to slow-moving or end-of-season styles.
Add value instead of cutting price. A gift with purchase, free alterations or repair, or a care kit costs you far less than 30% of the price.
Reward your list, not the crowd. Give your email subscribers early access to a new release to build loyalty without a discount.
Give back. GivingTuesday falls on December 1 this year.3. Donating a portion of that week's sales to a cause your customers care about turns a sales week into a values week.
Opt out, loudly. In 2011, Patagonia ran a full-page Black Friday ad in The New York Times telling readers not to buy its jacket.1 Swedish label ASKET has, in past years, closed its online shop on Black Friday and sent visitors to a garment-care guide instead.2 Opting out is a statement, and it's free.
The Business Beat: Know Your Numbers First
You can't price confidently, set discounts, or ask for funding until you know what one garment really costs. If you are a designer, walk through the costing sheet with your own product.
▸ NEW · COSTING CLINIC!
Want my eyes on your real numbers? Join the Costing Clinic.
A live 90-minute session on Thursday, November 19. I teach costing and pricing the way I learned it in 35 years of product development, and we work through a real example together. Then you fill in your own costing sheet with your real product, and I send you written feedback on your numbers.
Founding session: $97, recording included if you can't make it live. Best for designers with at least one product in production or close to it.
Not ready for that yet? Start on your own with the free Garment Costing Sheet. The companion post walks you through costing a single garment step by step, using the same dress you met above.
Get the free sheet by subscribing→ Here
Coming Up
December: we move from numbers to making, with the Create stage of the design process. Looking for more guidance? Stay tuned as we prepare our comprehensive Fashion Business Foundations: A 12-Step Masterclass to Plan, Develop & Prepare Your Fashion Business. Build your understanding of the business behind your creative vision—and move forward with a clearer plan.
The Monthly Spark image
The Monthly Spark:
Which product are you most afraid to raise the price on, and what would have to be true for you to charge what it’s worth?
The Monthly Spark is a short reflection prompt at the end of each Insights & Inspirations. It’s tied to the month’s theme and gives you a few quiet minutes to apply what you’ve read to your own work.
If you’re new here, the idea is simple: read, then reflect. Each prompt moves you from absorbing ideas to making decisions about your brand.
Not on the Weekly Brief yet? Subscribe to get each month's tools in your inbox every Monday.
Happy Conscious Creating!
Britta
Sources
1. Patagonia, "Don't Buy This Jacket, Black Friday and the New York Times" (Nov 25, 2011): https://eu.patagonia.com/gb/en/stories/planet/activism/dont-buy-this-jacket-black-friday-and-the-new-york-times/story-18615.html
2. Fräulein Magazine, "ASKET: Anti-Black Friday": https://www.fraeulein-magazine.eu/asket-anti-black-friday/
3. GivingTuesday (date: Tuesday after U.S. Thanksgiving; Dec 1, 2026): https://en.wikipedia.org/wiki/GivingTuesday
Example costs are illustrative, from the IFD Garment Costing Sheet. Selling-cost assumptions: 3% payment processing, $9 fulfillment per order, 8% returns/markdown allowance.
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