Pricing cringe — Lionesses of Africa

by Brigette Mashile 

Pricing – I avoid this topic, a lot.  It is because it makes me uncomfortable.  I have no direct reason, so I know it must be deep and attached to money in general.  This is a major issue because I run a business, I make products which I sell, every day.  What am I doing? What have I been doing? Ah…sigh… I need to dig deeper and solve this mystery.  At some point in my business, my analysis pointed to something off with our pricing, and it is still there. This is because I made a few major errors in the beginning. 

Why does quoting a client make me uncomfortable? Sometimes even nervous. I get feelings of ‘how will they react?’, a second of doubting the products’ value. I am well aware of what I do, of the amount of time I dedicate to precision and customer care, I know our product is worth it. Then why is it such a challenge to price what I should price it and communicate it? I have worked in retail as a merchandise price negotiator, price setter and communicator, I know what must go in and why…and yet I am not sure…

The biggest error I committed when starting this business was bringing my retail experience into a custom based business.  Well…wait… in the beginning I did not even know it was to be a custom business. First part of my error. Before you start, decide on your business model, after research, this will communicate your pricing model easier.  So, because I did not know what model I was doing, I just started making clothes and selling them the way I knew how …retail. Our target margins in retail were 60-70%, so I applied this to my business…. Laugh with me! Imagine thinking a business that can afford rolls of fabric can have the same margin as a business where I buy fabric per order per client.  Well, as you can imagine the first skirt, I ever made was R300…

And guess what…she said it was expensive. This confused me further, because in my mind it was affordable. How can she say it’s a lot? I held on to the skirt, until someone else came and bought it, at R250. This lesson was important, because without the business model being clear, my target market was also unclear.  So, this told me the first client was not my target, and I should stay clear of those prices. Did I?  Well…I can explain.  Or maybe I cannot. But this issue created issues in the future.  The day you realize your prices are too low for the financial goals, you need to increase them, you will wish you hadn’t started so low!

“The fear of losing customers and the uncertainty around whether or not price contributes immensely to worry and anxiety around pricing. In cases where individuals have already existing anxiety related conditions, these will be exacerbated in cases of pricing. These types of business owners will project their own fears and anxieties onto their business. Then, there’s the South African market, where when you price up you are automatically told that the majority of South Africans are not your target market. So, I think business owners also fear being alienated by their communities when it comes to their pricing models. Business owners generally have a need to be seen as understanding and attuned to their customer’s needs,” says Clem (MA Clinical Psychology UP).

2021 is demanding change, what with Covid shifting all industries!  This year I make this difficult shift. And do it right. It will be difficult because I need to look at my business with a magnifying glass and decide which parts to keep and which parts to let go of. I unfortunately cannot be everything to everyone, this is how companies and people die.  It is very important to be clear about what you are doing, who you are doing it for and under what conditions; and then stick to it. One of the biggest things to be clear on is definitely pricing.