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  • ASK THE EXPERT: HOW TO PRICE YOUR PRODUCTS FOR PROFIT

ASK THE EXPERT: HOW TO PRICE YOUR PRODUCTS FOR PROFIT

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When it comes to creating sustainable, successful businesses there are so many things to consider, but very few are as important as getting your pricing right from the outset. 

With more than 20 year’s industry experience, Catherine Erdly, Founder of the Resilient Retail Club, is here to share her advice on pricing your products for profit in 3 easy steps. 

 

Step 1: Compare against the right kind of competitor

If you were to price your hand-made interior products against mass-produced ones sold by a leading supermarket, you will miss the mark and leave yourself with unsustainable margins.

Instead, think about more than just the same product category and instead look for at least 3 brands that have similar production and processes to you and products made from materials of comparable quality. From here, you can decide if you think your product’s quality justifies a premium price, if you would like to match competitors in the market, or if you’d like to price your products slightly below the average and instead position it as a ‘value’ item. 

 

Step 2: Get meaningful customer feedback

It’s important to remember that what you believe your product is worth is only relevant if you know your customers will be willing to pay it. That being said, you don’t want your customers to be dictating exactly where you price your products either. Instead, use social media or email marketing to connect with them and ask them about their purchasing habits. You could ask them things like, ‘When you last bought a loved one a gift, how much did you spend?’ or ‘on average, how much would you spend on a high-quality interiors piece?’.  

 

Step 3: Finally, think about profit

Now that you know where your products sit within the market and have a better understanding of what your customers would be willing to pay, it’s time to think about profit. Using the information from the first two steps, identify a price that fits within this criteria but also ensures enough of a margin to see continued success for your business.

To hear more from Catherine Erdly, follow @resilientretailclub on Instagram or you can visit www.resilientretailclub.com 

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Written by Catherine Erdly
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Written by Catherine Erdly

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