The need to raise base prices....

[techdragon]

Hey guys,

Good morning!

I have been wrestling with a dilemma of late and thought I would check in with both my customers and other kilt enthusiasts in order to gauge things. I am a bit adverse to some changes in my business but I am facing a few situations that are leading me to increase my prices. As many of you probably know, cotton is facing a significant increase in price and normal operating expense do go up each year. I have yet to change my base prices in the 4 years that I have been in business but have added an employee, moved to a separate workspace and expanded into bulk fabric.

In order to stay successfully in business, I am calculating that I may need to make a $25 base price increase across the board. This would translate as a higher percentage on my Classic Alt.Kilt (going from $100 starting point to $125) but only a 6.5% increase on something like the Steampunk kilt.

My major concern is that I would exclude customers or alienate some by making changes to my price structure. I am very pleased with my overall cost for value and my place in the kilt world and would hate to jeopardize this.

Would anyone care to voice an opinion or concern on these thought? I really value what my customer think and I appreciate your time in reading this.

Thanks again,
Jeanie

[seanachie]

Obviously, as a consumer you hate to see prices increase. However, cost of materials, labor, rent etc also increase. Interestingly enough the cost of cotton is on the front page of the LA Times today. What I can say is that my AltKilts are excellent kilts, made from good sturdy material and good craftsmanship. So in terms of return business it would not impact my decision. I may be able to find something at a lower cost but not necessarily as a good a product and I'd rather the better product. As an owner of a couple Classics that I am extremely pleased and I wouldn't be put off.

[Jock Scot]

I don't know your products, so perhaps it is easier for me to say this.

It is a basic commercial necessity to make a profit and the only acceptable substitute to a profit is a bigger profit! If your production costs rise and you are not able to cut costs elsewhere within the system then you have absolutely no option than to raise prices. Unpalatable though that may be and of course as you are well aware, that may price yourself out of the market, but that is a judgement that only you with your experience can call. The "unthinkable" alternative is in the end inevitable and even more unpalatable.

In the hard and sometimes harsh business world that we live in, the sad but realistic fact is that in business there is no such person as "Father Christmas".

[CMcG]

Given the rock solid reputation of Alt.Kilt, and the significantly higher cost of some competitors (Utilikilts), I think a price increase of $25 would be OK.

[Burly Brute]

To me it sounds as though the extra profit outweighs the increase in price. Like previously stated, you don't want to price yourself out of the market, but I dont think it sounds to absurd of a price increase, especially if you have done your homework, which it sounds you have. My advice would be to increase price, but maybe tailor in a few promotional things...like, spend x amount and receive free shipping, or giveaways, etc...this may offset the increase as it will bring even more business in...food for though I suppose.

[Jay]

In a fair exchange between two parties, one sells and makes a fair profit while the other buys a fair product at a cost reasonble for that product.



Meaning, anyone that wants to hammer you down on price has zero respect for your side of the transaction. Your proposed higher prices still appear fair for what you are selling.

[Downix]

Your prices are some of the lowest in the market. Frankly, I've been expecting this for awhile, and am still glad for the product ordered so far (it's on it's way now, so I'm Jonesing) but a slightly higher price will not deter me.

[Taygrd]

Shipping and material cost have increased greatly across the board. You cannot do your customers any good by going out of business. Unfortunately I think we all see price increases as a sign of the times. Kilts are a limited market compared to wide screen TV's so I feel the consumer would take it in stride.

[RockyR]

I don't think a modest increase would be unwarranted as you grow your business and improve. Other contemporary companies have had price increases over time (look at UK). CUSTOM contemporary companies are similarly priced and your product is 'different' than others in the marketplace. I think if people are looking at your kilts, a modest price increase would not put them off.

As you grow and your costs / overhead rise, you see that what you need to charge goes up as well unless you can cut costs or improve speed in other areas of the business. Its a balancing act and as one area increases, something else in the business has to give, whether it's price, quality, speed, your own pay, cutbacks, etc.

If you're worried about price increase, perhaps a % increase across the board may be better than a flat $25 per model.

Another way to 'lessen the blow' (as someone else mentioned) is to have free shipping for a set period with a kilt order.

So long as you have a quality product and are asking for a 'reasonable' price for it, people will be willing to pay for it.

Best of luck with whatever you decide!

[Spartan Tartan]

I realize I am sort of late to get in on this conversation, but I would like to offer another consumer opinion...

I, personally, do a lot of research into the quality of products before purchasing--especially something like a kilt. In fact, that is one reason I joined this very forum.

As to your specific question, a $25 swing in price would not by a make-or-break factor for me. I would happily pay more to ensure the quality of the product than to save $25 and get garbage.

Business is just that...business. I hope you would do whatever you needed so that you can keep producing the quality kilts that you make.