Episode 5: Stop Underpricing — The Exact Framework to Price Your Products Profitably
If you've ever felt nervous to charge what your product is actually worth — this episode is for you.
In almost 75% of my one-on-one coaching calls, I see the same problem: founders are underpricing. And in this episode, I'm walking through the exact pricing framework I use at my own multi-million dollar apparel brand to make sure every product I sell is actually profitable — because without that foundation, scaling becomes nearly impossible.
Whether you're pre-launch setting your first price points, or you're already in business and suspect your margins are too thin — here's how I think about pricing, and why I stopped apologizing for my prices a long time ago.
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What I Cover in This Episode:
The Bottoms-Up Pricing Approach I always start by building my price up from true cost of delivery — not just materials and labour. Here's everything I build into my product price before I land on a retail:
- Raw materials, trims, and supplies
- Wastage and a quality control buffer
- Freight (factory to 3PL)
- Shipping subsidy and packaging (corrugate is more expensive than you think)
- A per-unit returns allowance based on my average return rate
The Top-Down Approach: Collection Strategy Once I know my costs, I zoom out. Where does this product sit within my collection? Pricing doesn't happen in isolation — a new product needs to make sense relative to everything else I'm selling. If something is wildly out of range with no clear reason, it'll confuse customers, not convert them.
When (and How) I Use Competitor Pricing Research Competitor research is always my last step — not my first. Here's why: I have no idea what their margins look like. They might be underpricing too. Or not paying themselves. I use competitor pricing purely as a sanity check to make sure I'm not completely off-base, but I never let it set my price.
The 75% Gross Margin Target I aim for a minimum 75% gross margin — meaning my cost of delivery is no more than 25% of my retail price. I connect this to what I call the Four Quarter Accounting Method, a simple way I think about my P&L:
- 25% → Cost of delivery
- 25% → Operating expenses (team, tools, overhead)
- 25% → Advertising (Meta, Google, influencers, affiliates)
- 25% → Profit
How I Handle Price Increases: Already in business and realising your prices are too low? You're not stuck — I've done multiple price increases at my brand, and I'll be honest: most customers say nothing. I share two approaches I've used — quietly increasing prices, or being transparent with your audience and turning it into a reverse-sale moment that actually drives purchases before the increase hits.
Key Takeaways:
- Build your price from the bottom up — include every cost, including the ones most founders overlook
- Know your gross margin target before you finalise any price
- Use competitor research last, and only as a sanity check
- Price increases are normal, expected, and rarely as scary as you think
- If your margins are sitting around 50% and you're struggling to scale, that's the first place I'd look
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