Lessons from industry leaders - What IKEA teaches us about pricing strategy
While dining on the traditional Svensk maten (Swedish food) of meatballs and salmon filet at our local IKEA in Glendale, CA today, I noticed some new signage about how IKEA keeps their prices low.
It all starts with setting the price first and designing accordingly. This is the same concept I teach in my Fundamentals of the Fashion Industry class at Woodbury University: Identify your target price point first, then make every design and sourcing decision based on these budgetary constraints. It's ONLY in this way that any product manufacturer can achieve healthy margins while still ensuring their product is competitive.
Understanding your pricing strategy and keeping track of how every penny of your costs are allocated is a crucial first step to enacting sustainable business practices. It's often true that choosing sustainability can cost businesses a little more up front, and that it can take a couple business cycles to start to reap the benefits of your sustainable choices. So having a clear picture of exactly what you can afford within your margins is key to making wise sustainability choices that will benefit your bottom line in the seasons to come.
Book a consultation with me, Karri Ann and my team, to break down your current pricing strategy and determine what business sustainability choices you can afford to make right now.