[00:00] Introduction
I’m Bhavna Rishi, founder of BuildTheDreamBrand, and in over 20 years working with brands from the V&A Museum to first-time founders just starting out, I have seen one mistake come up again and again — founders getting their pricing wrong. Not a little wrong. Catastrophically wrong. And by the time they realise it, they’ve already taken orders, paid manufacturers and committed to stock they can’t actually profit from.
In this episode I want to walk you through exactly how to price your products for profit, because pricing is not guesswork and it is not about matching whatever your competitors are charging. It is a formula, and once you understand it, it changes everything about how you run your business.
“Pricing is not guesswork. It is a formula — and getting it right from day one is the single most important financial decision you will make.”
[04:00] The True Cost of Making Your Product
Let’s start with the number most founders get wrong before they’ve even set a retail price: the cost price. Your cost price is not just the invoice from your manufacturer. It includes every single cost involved in getting that product into existence — your fabrics, trims, labels and packaging, yes, but also your shipping from the factory, any import duties, quality control checks, and the hours you personally spent sourcing, sampling and communicating to get there. That last one is the one founders almost never account for, and it is the one that quietly eats your margins alive.
I worked with a founder who had been in business for two years and thought she was making money. When we sat down and worked out her actual cost price — including her own time at a reasonable hourly rate — she was losing money on every single unit she sold. She was exhausted, working around the clock, and effectively paying for the privilege of running her business. Once we rebuilt her pricing properly, she had the clarity to either reprice, renegotiate with her manufacturer, or both. The business became sustainable. But those two years of undercharging were gone.
[09:00] The Markup Formula That Actually Works
Here is the formula I use with every founder I work with. Take your true cost price and multiply it by 2.5 to 3 to arrive at your wholesale price. Then take that wholesale price and multiply it by 2 to 2.5 to arrive at your recommended retail price. So if a product costs you £20 to make, your wholesale price should sit between £50 and £60, and your retail price should be between £100 and £150.
I know what you’re thinking — that sounds like a lot. But here’s what that margin has to cover: your overheads, your returns and exchanges, the cost of marketing and photography, your own wage, and the unexpected things that always come up — a delayed shipment, a reprint, a customer service problem that takes three hours to resolve. Margin is not profit you’re greedily pocketing. Margin is the buffer that keeps your business alive when reality doesn’t go according to plan.
“Margin is not profit you’re pocketing — it is the buffer between your business surviving and collapsing the moment anything goes wrong.”
[14:00] Why You Cannot Compete With Fast Fashion on Price
One of the most dangerous things a founder can do is look at what fast fashion brands are charging and try to match it. You will not win that game. Fast fashion brands operate on volumes you cannot imagine, with manufacturing relationships built over decades, and supply chains optimised in ways that are simply not available to an independent brand. If you try to compete on price against them, you will underprice yourself into bankruptcy.
What you can compete on is everything they cannot offer: your story, your craft, your ethics, the person behind the brand. When my herringbone scarf was selling 17 units a day at Fenwick, it was not the cheapest scarf on the floor. It was selling because of what it represented — quality, design, a product with provenance. Customers who value those things will pay your price, but only if you communicate those values clearly and confidently. Apologetic pricing signals low quality. Confident pricing signals value.
[19:00] Discounts, Wholesale and Protecting Your Brand
I want to talk about discounting because it is one of the fastest ways to devalue a brand you have spent years building. Occasional, strategic promotions are fine — an end-of-season sale, a launch offer, a loyalty reward. But habitual discounting trains your customers to wait. They stop buying at full price because they know a sale is coming. I’ve seen this destroy brand equity that took years to build.
If you are selling wholesale — to boutiques, department stores, gift shops — your margin needs to be built in from the start. Wholesale buyers will expect to at least double their buying price at retail, so you need to make your wholesale price work for both of you. This is not a negotiation to have after the fact. Build it into your pricing structure from day one so that wholesale becomes a growth channel rather than a drain on your margins.
[25:00] Key Takeaways
Pricing is a structural decision, not a feeling. Build it on real numbers — every cost, including your time — not on what you hope the market will bear.
Use the formula: cost price multiplied by 2.5 to 3 for wholesale, wholesale price multiplied by 2 to 2.5 for retail. Adjust at the edges, but never below.
Competing on price against fast fashion is not a strategy — it is a slow exit. Position on value: your story, your quality, your customer experience.
Discounting has its place, but habitual discounting erodes your brand. Protect your full price and be intentional about when and why you offer reductions.
[27:00] Action Step
This week, sit down with every cost involved in your hero product — every line item, including your time — and work out your true cost price. Then apply the formula and compare it to what you are currently charging. If there is a gap, you now know what to do about it.
Ready to Take the Next Step?
If you are building a fashion brand and want expert guidance, book a free discovery call with Bhavna.