Most founder-led product brands are undercharging. Not by a little — often by a meaningful margin. And the cause is rarely the product itself. It is almost always the same underlying problem: the brand has not built the commercial infrastructure that gives it permission to ask.
The relationship between brand equity and pricing power is one of the most consistently documented phenomena in consumer behaviour research. A 2024 study published in Human Behavior and Emerging Technologies confirmed empirically what practitioners have long understood: brand strength, brand attachment, and brand loyalty together determine a consumer's willingness to pay a price premium — and that willingness compounds. The stronger the brand, the wider the gap between what the market will pay and what a comparable unbranded product can command.
Most founders building products in the $20M–$100M revenue range are not operating with that infrastructure in place. They have a product. Often a very good one. But they are priced like a product company, not a brand company.
The three symptoms
When a brand is undercharging, it tends to show up in three places simultaneously.
The first is margin compression that does not resolve with volume. More units sold, same margin pressure. The instinct is to find operational savings — and those matter — but the structural issue is that the price ceiling is too low, not that the cost base is too high.
The second is retail sell-through disappointment. The product looks right, the buyer believed in it, but the velocity does not materialise. Often this is a brand perception problem at point of sale: the product does not command the shelf. Buyers see the margin but not the pull.
The third is what might be called the quality-price inversion: a founder who knows their product is genuinely better than what competitors are charging twice as much for, but cannot close that gap. The quality exists. The price signal does not match it. And so consumers, who use price as a quality cue more than most founders want to believe, default to the more expensive competitor.
What pricing actually communicates
Research confirms that frequent discounting can reduce perceived brand value by up to a third. Harvard Business Review analysis has put that figure at around 33%. The mechanism is worth understanding: it is not about optics. Price is a positioning signal. When a brand discounts habitually, it is not offering value — it is announcing uncertainty about its own worth.
On Holding, the Swiss athletic footwear company backed by Roger Federer, provides a useful recent case. In Q1 2025, its DTC channel grew 45% year-over-year with gross margins of 59.9%. When the company announced US price increases, its stock rose 12%. The move was framed not as cost-passing but as brand reinforcement — communicating to the market that it had earned the right to charge more. That right was built through positioning, not product alone.
The broader DTC environment makes this dynamic more urgent, not less. The median EBITDA margin for eight-figure DTC brands is currently around 7–8%. Average annual revenue growth for DTC stores slowed to 10% in 2024, the lowest in five years. VC investment in the sector dropped 97% from 2021 to 2023. In that environment, pricing decisions are not cosmetic — they are structural. A brand that cannot command a price premium in 2025 and 2026 is not simply leaving money on the table. It is financing its own commoditisation.
The permission architecture
The gap between what a product could charge and what it currently charges is almost always a brand equity gap. Brand equity is not built through better photography or a Pantone colour. It is built through a coherent and consistently enforced positioning system: what the brand stands for, how it presents that at every touchpoint, what it refuses to do, and how it talks about its own value.
The brands that command premium prices share a common structure. They have defined a position specific enough to attract people who are willing to pay and exclude people who are not. They have made design and material choices that signal quality before the customer reads a single word. They have controlled distribution tightly enough that the context of purchase reinforces the price. And they have disciplined themselves not to discount when it gets hard — because a single clearance sale can undo months of positioning work.
At Ateliersavant, we call this the premiumization mandate. It is not a rebranding exercise. It is a commercial restructuring: a systematic audit of where the brand is leaving pricing power on the table, followed by a prioritised plan to reclaim it. The work includes positioning architecture, product and packaging review, channel and distribution strategy, and pricing structure — treated as a single integrated system, not a set of separate disciplines.
The diagnostic question
The most useful question a founder can ask is not "what should I charge?" It is: what is stopping the market from paying more?
The answer to that question is almost never the product. It is almost always the brand — how it looks, where it is sold, what it says, and what it is willing to refuse. If the answer includes "our competitors charge less," the follow-up is worth sitting with: are your competitors profitable? In the current consolidation moment, competing on price is not a strategy. It is a race to the bottom with crowded company.
The brands that are growing profitably right now are using this moment to create distance — through positioning, design precision, channel selectivity, and pricing discipline — from the competitors who are discounting their way toward irrelevance. The window to do the same is narrower than it appears.