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Let's talk pricing!

Unfortunately, just like everything else in the world these days, our prices are going up. I recently joined a conversation in one of the business groups I belong to. Members were talking about price, and most were talking about the fact they hate having to raise pricing for customers. A few said they were not bothered by it and actually liked it. And while yes, we would all love to make more money, the reality of raising prices these days is merely to survive, not to get a raise or take a fancy trip or stuff our savings. And while I would like to make more money and not raise pricing, realistically that's not an option, and I am so grateful for customers who understand the market and that not a thing has gone untouched by the price hikes lately. And for that, thank you!!

It is important for any business, no matter how big or small, to understand their cost of doing business. I see the posts day after day of people selling items but have no idea what their costs are, overhead, or labor rates. They are solely basing their prices off of what someone else is telling them they are selling a similar product for. Or the conversations of individuals who claim they have no overhead. I can only think of a few businesses that would have very little overhead, such as a computer or cell phone, and internet service or cell phone provider. And maybe those are shared expenses between business and personal use, but there is still overhead.

I try to keep my pricing models as simple as possible, and you can find the basics under services on my website. While custom work is harder to price, as it seems no two orders are ever exactly alike, there is a basic model I follow. Not only does it cover the supplies to make the order, but it also covers time to make the products, ordering products, artwork, invoicing, communicating with the customer, packaging, and sometimes delivery. It also includes a markup based on my monthly expenses to cover things like insurance, utilities, equipment, repairs, advertising, donations, and all the costs associated with running a business month after month. Sometimes the pricing model doesn't quite meet community standards, and I can raise or lower the price slightly to fit those needs.

Why do one off's cost so much? The simple answer is it takes the same amount of time to communicate with the customer, the same amount of time to design, load equipment, purchase supplies, and so on. But instead of dividing those working hours by a larger amount of product, you're only dividing those costs by 1. Or a few. The best prices always come from meeting those price breaks. Sometimes it's less expensive to order a few more of an item and meet a price break than to pay more for less items. I also do this when ordering product. Sometimes a case is better priced, sometimes just one more item qualifies for free shipping. It's important to do the math for the best prices.

The other thing to consider when it comes to pricing is the value. And by this, I mean, is it worth paying more money for an item that will last a longer amount of time vs. paying less for an item that you will have to replace frequently. And the only way to know the value is to know your needs. I used to buy my son Nike socks because they lasted a lot longer than the ones I was buying at Walmart. They cost more upfront, but because they lasted so much longer, it was actually less expensive to buy the Nike socks even though the upfront expense was more.

I often think of this in my business with purchasing a banner vs a sign. If you only need signage for a day or two, a banner most likely will be the best option as they are not made to be outdoors for long lengths of time and cost less when comparing equivalent sizes and prints. Wind certainly does them no favors. But if you need something more permanent, especially when exposed to the elements, a metal sign with prints made to withstand the UV rays is the better option. While it will cost more, it will last years before fading and most likely the blank with last much longer and can be reused with new designs and lettering for quite some time. While the banner would cost less, the elements most likely would destroy it and would need replaced probably monthly at the very least. You can always extend their life by adding a wood blank behind them to protect them from the wind, or take them down when not needed, and so on, but they will still deteriorate at a much faster rate. A good printer will be able to help you decide which options are the best for your needs and budget.

Sometimes as a printer, I have to cut costs to meet a customer's budget. But I will always give you alternative ways to get as close to what you want within your price range. Sometimes you want what you want and are willing to pay the price and sometimes the price is more important than the actual design. Again, that value is based on your wants and needs as a customer.

Hopefully this has given all of you some insight into pricing on the business end of things. Remember as business owners, we are also consumers and don't enjoy price increases or having to pay more to get what we want and need either. We have to know our numbers and how to cut costs when possible, to get you the best pricing we can.

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