profits

Price Your Product to Increase Profits

Price Your Product Introduction

Learning how to price your product to increase profits is a valuable skill set and a must-have if you want to start and/or grow a successful business that is both fulfilling and prosperous.

You have designed and created a product… now how do you price your product so that you can maximize your profits? 

If you sat down and visited with five different saddle makers or leather craftsmen, you would certainly get five different methods to accomplish the same goal.  Some of them would be good ways to go about this and some would be not so good ways.  There is always more than one way to skin a cat… or maybe here, skin a cow… or use a cow’s skin… you know what I mean.

When I started my shop in 2004, I was a kid fresh out of college with many hours of science and chemistry on my transcript but not one business class.  This whole world of entrepreneurship was very new to me and pricing was not my strong skill set.  I read a lot about pricing strategy and proper accounting to maximize profits in a business.  I also talked with many different craftsmen about their pricing formulas and the feedback I got was all over the map.

Over the last 14 years or so, I have bump along learning from my mistakes in pricing and am currently using a system that I feel is a great starting place when I am pricing goods and services in my shop. Continue reading