Determining Fees and PricingSubscribe
How do you determine what fees to charge or how to price your merchandise?
This is an ongoing struggle for me. I do use salary calculators and read about industry standards, but I still feel like I am undercharging. Does anybody else feel this way?
Or have any great suggestions for how to make an actual living doing what you're doing?
I think this is always the challenge ESPECIALLY when you sell a service.
I think it's important to shop around and see what your competitors charge in your area. Determine what they provide for their service and use it as a guideline for your's.
Then, survey your customers. After you complete a transaction, ask a few questions of them (this can be an email survey or online if you like -or just casual discussion over the phone). If you provide B2B services, then your clients will understand the need for feedback and may copy your idea!
Ask them: did you feel you got good value for this price? Have you purchased this service before - what price range did you pay? would you pay more? What would make you come back?
Tell me about what you do for living, maybe I can suggest something more specific
I teach piano in students' homes. Every summer, I contact my competition and do a "secret shop." I ask about fees, teachers' qualifications, et cetera, pretending to be a parent with intentions to sign my child up for lessons. After three or four examples, I recognize the average. The prices aren't that far off from each other. One lady charges $50 per hour, and another charges $46.
I do feel that I am undercharging my oldest students (who have been with me for 5+ years). I hiked my fees a few years ago but didn't ask them to pay the new fees. But because they allow me into their homes and treat me like a friend and not a stranger, I don't mind the lower cost. Besides, my older students are in the habit of practicing, making my work a ton easier.
For retail, I've been told that you should target your retail price to be about 4 times your cost, and your wholesale price should be about twice your cost. On the service end of things, we vary some by season because of the industry. In busy times, we stick to the top end of our scale, and fall lower during the winter months. We get phone quotes from other people in the industry on occasion, and if we lose a contract on price, we inquire about the winning bid. Sometimes it is something we can't some close to for whatever reason. We don't really try to compete on price unless we are having a bad dry spell or lose a big job at the last minute and are trying to fill in to keep our subs happy.
As for the medical supply business that I am in I take and scope out my competitors all the time. This keeps me on my toes.
I have such a great rapore with my customers they let me know what I can get away with. Which is great because if it is so crazy over priced they won't call me again. I am always marketing, making calls ,doing research for the hospitals and mechanical contractors, sometimes I may not get the order but they always will remember this for the next time. The vendors that I use all the time give me below distributor cost. But I believe in their products they stand behind them so I push them. I generally can get depending on the items about a 20 to 50 percent markup. Now, if it is big bid and I am competiting I not only get better cost but I get protected pricing.
I had a friend, who is also a money coach, tell that when her clients don't charge enough, they sometimes build up resentment to their job, their client (unless it's a friend,etc.),
and they just feel "off."
I like to think of it as sharing something of value that helps to make another person's life better!
Talk to you soon,
AnnemarieFlag as inappropriate Posted by on Wednesday