Make sure your price covers all costs.
This may seem like a “duh” statement but all too often we see clients that don’t account for all costs when determining the appropriate price for their product. Think staffing, marketing and overhead, not just material costs. Know the appropriate markup to meet your profit margin goal.
Lower costs to lower prices.
Remember, that the best way to offer lower prices is by lowering your costs. As you become a more efficient machine, (especially due to your awesome outsourced accounting team), you can look to lower your prices if that seems appropriate for your market.
Also consider raising your prices.
Does the idea of raising your prices make you quiver? While you may see some push back sometimes it is absolutely ok to raise your prices. As Starbucks has shown us, if your value proposition is adequate it shouldn’t matter. Read more to know when it may be a good time to consider this.
Perform market research.
Do you have a 500% profit margin when most of your industry peers are offering 300%? This is crucial research to have done ahead of time and to review periodically to ensure you’re competitive in your market. Don’t forget to also review prices when there is any inflation or recession in the economy or if you are entering a new market.