Pricing: Sofia Vergara Designer Swimsuit versus K-Mart Collection

SofiaVergaraKmartcollectionI came across this on Yahoo today and I thought it was a great example of how a low quantity manufacturer has to price final items, and how a mass manufacturing company has to price items.

The article shows Sofia Vergara wearing a designer swimsuit, priced at $450.

And then later in the article talks about Sofia’s collection at K-Mart priced at under $50.

Now I don’t doubt that the designer swimsuit has some nicer material in it than the clothes that are offered under Sofia’s name at K-Mart.

BUT, do you really think the product cost is $400 more?

Of course not.

The point is that K-Mart can afford to use some type of Cost Plus pricing formula because they sell A LOT of quantity.

On the other hand, the designer swimsuit company sells much less quantity so they have to charge considerably more.

Yet, many handmade jewelry designers follow the same type of Cost Plus pricing philosophy that K-Mart uses.

True, the multiple will be higher than K-Mart’s, so maybe using a 3X or 4X material cost pricing formula.

But that still isn’t nearly enough to bring in profits that you need to THRIVE, not just SURVIVE.

My guess is that the $450 designer swimsuit is at 10~15X product cost.

Isn’t that where you need to get to as well?

Answer: Yes.–modern-family-190234699.html

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