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Pricing and Marketing

Pricing and Marketing

Pricing is a taboo subject. Few brands want to talk about it. It’s wrapped up in that “commercial in confidence” mystique that we never seem to get through. As it is so secretive, I think it can be used as an excuse and a cover for bad behaviour and questionable decisions. How cheaply can we source X product? What are the impacts on people and the environment? Who cares? No one will ever find out, right?

I think that model is changing. Gouging customers, and likewise, being super cheap and not considering social and environmental impacts is not a long term strategy. As consumers, we have access to more info than ever before. If a competitor really wanted to find out what it costs me to make my product, it would realistically only take a few emails. It’s bedding. The designs aren’t original. Anyone can copy a colour. What’s different, and how you differentiate your business, are your principles, and most importantly, how you treat your customers.

Behind “French Flax”

As much as we all love a bargain, there is someone on the other end of the product or sale that has to make a living wage. There is also an environmental cost to whatever we are buying.

The classic line I see is “French Flax”. What they don’t follow up with is: “Once harvested in France, the lowest-grade flax is packed into shipping containers and shipped to the third world. There, in unregulated markets, it is milled into linen and dyed with a bunch of different chemicals and sewn by people who may not be working in a safe environment, or being paid a living wage, and with waste (for example, dyes) not being responsibly- managed after use”. It just doesn’t have the same ring to it, I guess.

Be transparent

As a side note, I’m in no way against having products made in developing countries. Heck, the benefits can be enormous, and it’s critical to improve the lives of these people. We’d be naive to think everything can be made locally or in western-developed countries. We just need to be transparent and understand what’s happening and the impacts associated with our choices. If you’re a brand doing it responsibly, you should be celebrating it! Helping people is a good news story. Be proud of what you do!

Why Siulas

I source all of my linen from Siulas. They are the oldest Flax mill in Lithuania. I chose them after getting linen samples from just about every country. You can see more about them here. What is and where is Lithuania? Watch thisApologies - the host is a bit over the top. Lithuania is part of the EU and is governed by their very stringent labour and environmental laws. You can see a blog post about my decision process here. I have not visited them in person yet, and there is no chance I’m flying 30+ hrs with a 1 year-old this year, but I do want to get there soon.

I used to only buy linen yardage and then sew everything myself, with the help of a casual studio helper (thanks Etai!) or the Social Studio. Since moving to regional Victoria and having our first child, I simply cannot manage the logistics of this. I’m now sewing some and Siulas is sewing some for me. Whatever is sewn by Siulas is noted on your Thank You card and on the website. You can see a blog post about my decision process here.

Mark up

Here’s the juicy stuff. I aim to have around 100% mark up on my product. It varies from product to product, but overall it will be about 100%. That’s all the money that comes back to the business - after paying for the product, shipping and GST. For a quilt cover, sewn by Siulas in Lithuania, here’s an idea of the pricing break down:

Quilt cover shipped to Australia, including GST and customs: $170 AUD

My mark up: $157

GST: $33

Final price, including free shipping and GST: $360 AUD.

My product, purchased directly from the mill, with no middlemen, is more than many other linen brands in Australia wholesale their finished product to stores. Heck, it’s almost as much as their retail!

Because of this, I don’t do wholesale. I want to keep my prices somewhat accessible. Many of us cannot spend thousands of dollars on bedding. If I did wholesale, this quilt cover would retail for closer to $1000, and that’s the sort of price point the quality of this linen is normally associated with. With linen, you do get what you pay for.

That $157 doesn’t look like a lot of profit when you consider other business overheads. The big difference is that I have next to no costs, associated warranty issues or returns. I don’t spend anything on marketing. I have no debt and very few overheads, whereas other brands try to go cheap and then spend a bunch of money throwing faulty product in the bin and trying to convince folks it’s not crap,

I just start with really good linen. Sure, I’ve made mistakes along the way and stuffed the odd thing up, but I do everything I can to make it right and I continually strive to make better linen.

My marketing strategy

My marketing strategy is to be honest and treat customers with respect. Someone then buys it. They love it. They tell their friends and they then buy some. I would prefer to offer my newsletter subscribers a small Order Book discount every now and then than to give money to Facebook to promote it to randoms. This is a very slow way to grow, but you get to know your customers - and hopefully keep them for a long time. I don’t have to spend money finding new customers all the time. I develop relationships.

Anyway, like most things, this is a journey that I need to keep revisiting. I’m even thinking about a pay what you feel it’s worth pricing strategy for a limited future collection. With all the costs on the table for the customer to understand, I would be really interested in knowing what they would be willing to pay.

Once again, my brand is only here as long as I have the good grace of my customers. With that, if you love your Mr. Draper linen, please recommend me to your friends and tell them to sign up for the email newsletter.

Let me know what you think in the comments. I can’t reply direct but check back and I’ll post replies when I can.