Our Pricing Structure

Our Pricing Structure

Last night I took a look at the pricing formula we'd made months ago for the Bateau Tee. Our target profit margin is between 60-70%. Depending on what industry you're in, that may sound like a lot or a little but in talking with other small garment businesses, between 60-70% seems like a general consensus. This is the number that allows us to pay our team a living wage, buy our very high quality fabrics and stay in business.

But we're not there on many of our styles which has led to me never getting paid in the four years I've ran Danu Organic, being consistently in credit card debt for the last two years and generally way too stressed out about Danu Organic to make running it worth it. So I'm done. 

Things will cost their true cost. When I look around the market for a t-shirt comparable to the Bateau, I don't see one. I see a bunch that may look comparable at first glance but if you dig through the greenwashing and fancy branding, they're grown offshore, sometimes even a poly (aka plastic) fabric blend, lacking in fit or style (that's dev costs!), or just a lower quality fabric which you can't tell until it's in your hands and you've worn it a few months. And they're still just under $100.

The Bateau Tee is grown and sewn in the USA from organic, cooperatively farmed cotton. Sewn in California without price negotiations. The fabric is incredibly high quality. You would several of the other "organic" tees on the market to last the lifetime of the Bateau Tee. I know because I bought them before starting Danu.

And I'd initially had it priced at $98 which is a 49.9% profit margin and will keep me struggling, stressed and in debt. At $125, we've hit a 60.1% profit margin which is on the low end of our 60-70% range but it will make ALL THE DIFFERENCE.

This does risk people simply not buying this tee and going for a lower priced option from another brand. But quality pays for itself over time and I have no doubt those who do will not regret the extra $27 when this tee years down the road ages barely at all and beautifully at that.

So I'm done underpricing my work. It hurts me, my team and the movement towards slowing down fashion I am advocating for. If you've worn it, you know it's value. I've hit a wall where it's very obvious that if I can't get Danu earning a profit to take away my stress, I'd be better off closing down. So I'm doing what I should have done years ago and actually charging what my work is worth.

And if nobody buys this tee with the jump from $98 to $125, that's okay too. Because it's time for me to face the facts. This business has to work out financially for me to keep doing it so it will be good to know if that's not going to happen.

Thank you for your understanding and support. By the time I finished writing this blog, I see somebody has already bought a Bateau Tee without this article being live and I can't tell you how relieving that feels. Thank you from the bottom of my heart.

I really hope I can keep making you these clothes for years to come.

P.S. In about a week please expect a price correction of our other styles not hitting the 60-70% profit margin mark. This will affect most of our knits (aka the Opal, Sonoma, other Bateau, Santa Cruz). So if you get them now, you can consider it a sale! Most of our wovens will not change prices.

P.P.S. Here's a detailed breakdown of our pricing structure for this particular tee. It's worth noting this pricing works out when we've sold about 150 of this tee which seems reasonable but takes us several years at this point in time.

1 comment

Please charge us what you need to stay in business! We need you in business much more than we need to “save” a few dollars! Your rare, highest-quality clothing are gems and worth so much more than this price! Thank you for sharing the details of your pricing and for all the endless efforts you make to create this impeccable and enriching clothing for us! I’m SO grateful for you and for Danu Organic!

Laura Paulisich

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