We've been giving some thought to the issue of pricing for Shoes of Prey.
Issue 1 - General Price Range We feel that a fair price for our shoes is around the AUD$250 mark. The shoes from the supplier we're going to work with are fantastic quality, and they supply ready made shoes to other retailers in the Australian market who sell the shoes for around $250. $250 also gives us a good margin and we think we can offer a very generous returns policy at that price which will be great for our customers. This price point positions us as a premium product without being as high as some of the famous, established premium shoe brands.
Issue 2 - Price Variation Between Styles The cost price we'll pay to our supplier will vary depending on the options customers select when designing their shoes. For example, a higher heel or more detailed embellishment will generally add to our costs.
Do we change the price we charge the customer depending on each minor change they make to the shoe? This would mean pricing would reflect our cost structure, however we think this would make the design process too confusing and take some of the fun out of it.
Do we use a flat pricing structure? This would be much simpler for the customer, however it might encourage customers to only design more elaborate shoes so they feel they are getting better value for money, and it doesn't make sense to price a simple, classic ballet flat the same as a more elaborate evening shoe.
We think the solution is to have a small number of different price points depending on the general style of shoe being designed. For example, all ballet flats would be one price, simple heels another price, stilettos another price. Based on issue 1 above, the average price we'd aim for would be around AUD$250.
What are your thoughts on issues 1 & 2 above?