Whiteboard Wednesday: Pricing Your Products

Pricing your products is such a basic need when it comes to running a business, it is surprising that it can be such a complex and difficult task to perform. Don’t worry because James Shores is here to break it down as simply as possible in this week’s Whiteboard Wednesday video.

3 Ways to Price Products

James talks about three main ways to set prices for your products: 1. Cost – Add up the cost of your parts/materials, labor, and other expenses 2. Competition – Compare the prices of other brands, similar products, and market trends 3. Customer Value – Figure out what your customers are willing to pay, based on the value of your product, its quality, and your level of service

Think Outside the Box

You shouldn’t just rigidly adhere to any one of these three pricing models. You need to think outside the box and compare your overall cost to what your competitors are charging for the same or similar products. You also need to factor in how much value your customers see in your products and what price the market is willing to bear. It’s not as simple as it might seem at first glance. Having a manufacturing or warehouse management solution, like Fishbowl, is a great way to cut costs and keep your business competitive. If you can reduce carrying costs and other expenses associated with production and storage of inventory, you can increase your margins and have an easier time setting prices that work for you and your customers. We’ve got plenty of other ways you can make improvements to your business. Keep coming back to the Fishbowl Blog for Whiteboard Wednesday videos and other inventory management updates.