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Upcharges for The Upscale

Everett Childers |

Years ago, I wrote an article about pricing for profit. Now, I think it would be relevant to review pricing for designer garments. There’s a psychology behind wearing designer garments, and there should be a psychology in accepting them for cleaning, too.
Standard practice is to accept designer garments at the “regular” price. But people don’t wear them in the same way as other garments, nor do they purchase them at a “regular” price.
Let’s say you charge $5.00 to clean and press a pair of pants that originally cost $50. You’re charging 10% of the original cost so that the garment can be worn again.
A ladies’ designer-label suit might have a $1,000 price tag. To keep the 10% rate, you should charge $100, but how many drycleaners really would? And why should a customer expect the drycleaner to service it for the same price as a skirt and jacket that might have cost $100 together?
Sometimes, customers will stand at the counter telling the clerk how much a garment cost, and expect absolute perfection at pickup. The slightest trace of a stain or wrinkle can lead to a huge confrontation. If the garment is damaged (or fit too tight) upon being returned, it can lead to a $1,000 claim.
Obviously, if you charge the customer $10.00 to clean a suit, it will take a long time to recoup the cost of such a claim from regular revenues. If you charged the customer $100 to service the suit, you would have a better chance of offsetting a $1,000 claim.
It isn’t good business to process a high-dollar garment for the same price as one worth one-tenth as much. But only a few progressive operators add a “Designer Label” upcharge.
People use drycleaners because they want their clothes to be clean, spot-free and fresh-smelling. They wear the clothes they wear because their jobs require it, they feel stylish and fit in with their peers, or their wives or boyfriends picked them out. People who buy designer clothes tend to be more affluent and need more attention, especially from their peers.
There are two types of affluent customers: the “new” rich, and those who have had money for a long time. My experience is that those who have had ample disposable incomes for any length of time buy nice clothing of good quality. They know that everything in the world isn’t perfect, that clothing wears out, and that people can’t perform miracles. They also expect to pay a reasonable price for professional garment care.
Those new to wealth are suddenly elevated to buying designer labels, and often buy expensive garments to make a statement. “Look at me, I’ve arrived,” they’re saying. “I can afford the best.”
Having “made it,” these people may look down on the less affluent, particularly those providing them with services. These are also the people who will tell you that their garments are expensive and exotic; you’ll know from these statements that they expect perfection. The slightest thing can set them off.
If a person exhibits this behavior, it likely means that he or she has a fragile ego. They need the costume they picked out to present a public image. Woe to the drycleaner who damages a blouse, dress or suit this person was planning to wear to a function with the goal of impressing someone!
Fortunately for drycleaners, the “old” rich realize they can’t get superior service for low prices — and aren’t that interested in what it costs to clean clothes. They want their order packaged nicely, finished perfectly and ready on time. They may question a price, but they won’t go searching for the cheapest drycleaner.
Some operators have a separate price-list for designer garments, while specialty cleaners do most of their business with a clientèle that assumes the price charged is what it costs to have cleaning done.
Both kinds of customers want personalized service. Specialty cleaners know how to promote a superior service constantly. They will often tell customers how good they look in whatever clothing they choose to wear.
Another reason to increase charges on designer garments is that many are made in shorter production runs. If a two-piece suit is made in lots of 5,000, the typical run for a high-priced designer suit may be 200.
With a short run, fabric is usually a specific color, weave and finish, and there won’t be a lot of testing done on its durability or serviceability. The label may say “Dryclean only,” but nobody has tested it.
There will be more damage claims on designer and higher-priced garments than on a mass-market label that’s tested and proven. The first drycleaning will often reveal the garment’s inadequacies.
Ladies’ garments are often worst, since they are more likely to be dyed an unusual color with hand-blended dyestuffs. One of the dyes will sometimes drop out in service, causing the garment to change color. 
If something happens, you may offer to address the matter with the retailer and explain the reason for the garment’s lack of serviceability. Retailers buy garments with no guarantees, however, and are usually reluctant to refund the money from a sale.
You may have once spent hours trying to locate an importer or manufacturer to order replacement buttons, belts and trims. Getting a designer to accept the blame for failure will be even more of a challenge.
Have staffers make positive comments on how nice a garment feels, how beautiful it is, or how stylish it is at mark-in and pickup. There’s nothing wrong with massaging an affluent customer’s ego.
With the cost of utilities, labor, rent and supplies going up, you must increase revenue to keep from losing money on every order. Rethink your policy on designer garments and base prices, too — and stay ahead of the increasing costs of doing business.PREMIUM PRICING
Always upcharge on garments bearing the designer labels due to the added risk involved in servicing them. Tier 1 has the highest — a 100% upcharge, or double the “regular” price. These are couture or ready-to-wear garments from top designers.
Tier 2 has a 75% upcharge from regular price or more. This level includes exclusive brands found in boutiques and high-end department stores such as Neiman-Marcus, Saks and Barney’s. The more familiar designer brands in Tier 3 should have an upcharge of 50% because of their high prices and known defects.
Tier 1. BCBG, Chanel, Dior, Dolce & Gabbana, Escada, Giorgio Armani, Gucci, Oscar de La Renta, Prada, Versace, etc.
Tier 2. Benetton, Burberry, Carolina Herrera, Ecko, Façonnable, Hugo Boss, Jil Sander, Paul Stuart, Salvatore Ferragamo, Sisley, Valentino, etc.
Tier 3. Banana Republic, Calvin Klein, Diesel, DKNY, Esprit, Etro, Juicy, Kenneth Cole, Lacoste, Liz Claiborne, Mondo di Marco, Nautica, Perry Ellis, Ralph Lauren, Sean John, Tommy Hilfiger, XoXo, etc.
These suggestions are based on my perception of the brands; many labels have multiple levels of price and exclusivity, as well as regional differences in desirability. You can modify the list based on your experience with garment quality and appeal.
To get the proper markup on designer garments, post a list in your mark-in area so staffers can be sure to add the charges. An easy way to make prices consistent on designer garments is to make one dot on the label of a Tier 1 garment, two dots on a Tier 2, and three dots on a Tier 3.

About the author

Everett Childers

Childers & Associates

Industry Consultant and Educator

Longtime industry consultant and educator Everett Childers is the author of the Master Drycleaners Notebook.

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