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How do you determine or calculate your pricing? 🏷

Hey Seller Community! Hope you're all having a wonderful week

 

This week's question is...

 

 

How do you determine or calculate your pricing? 🏷

Do they come with preset prices? How often do you adjust them? Can't wait to read your replies! 

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@QuokkaCoffee Margins on ice cream and other frozen treats are already pretty good as it is.  And I spent a lot of time over our closed months buying up all of the product that I could before we opened, since I could see that the prices weren’t going to get better for probably a year.  But when we blew through that product, inflation hit me square in the face.  The worst part of it for us was the freight costs, especially on our basic soft serve product.  Those have gone up over 100%, which is a huge impact given that I’m limited in where I can source that.

 

Honestly, if I were going to pass my entire costs on to my customers, I would have had to raise prices by at least 30% and in many cases 50%.  I’m not sure I could have done that.  So we decided to share the pain with our guests — they eat about 60% of the increased costs and we eat the rest.  Also, for now, we are not applying our markup rule for the added costs — we are assuming they will be temporary (ie - this season only) and only adding the extra costs to our selling price — no profit.  For now, it is working, and the customers are by and large none the wiser.  But, I have the advantage of not having indoor seating and the massive overhead associated with that seating.  So we can do this, for now.

 

This is the area where I said being in a diverse socio-economic neighborhood is tricky.  Many of my customers count not afford the drastic increases I’d have to make if I passed everything through to them, with overhead.  So I try to carefully balance it, praying to whatever gods exist (if any) that this will break sooner rather than later.

 

Gauges of success?  That’s easy for me.  It is my basic line of frozen treats — dishes and cones.  As long as my CoGS remains relatively consistent (since that line is 75% of my sales), we will survive and even thrive.  So far, we’ve managed it.

Chip

If my answer resolves your issue, please take a minute to mark it as Best Answer. That helps people who find this thread in the future.

Piper’s Ice Cream Bar, Covington KY USA
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Click here to see a list of third-party apps I use to add functionality to my Square account!

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I just take a look at the product and say yea thats about $12.00

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so sad I didn't catch this topic earlier. What a minefield of great tactics and information. I wish I had a system that could easily be applied and shared. But, I don't. After reading all the responses...maybe I'll come up with one and come back to share. 

Take care of yourself and, as life provides, someone else too.
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@Anthem The short answer to 'how do you price stuff' is that there is NO one solution. The best business model for selling handmade scarves probably will not work for a bakery, and so on.... 
It all comes down to what you sell, what it took to make the product, both in time and resources, and how are you selling it (online via portal [ebay/etsy/square], your own website, retail, trade shows, and so on ad nauseum).

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For my shop my lowest margin is around 50% - 64% depending on the item.  I also have a storefront, so I have to incorporate expenses of running a store into my prices as well.  Yearly I go back and look at my expenses and adjust prices if or as needed.

Jacqueline Mull
Owner of Jackie's Uniquely U Boutique
Owner of Uniquely U Anime

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I don’t stress about what competitors are doing because I offer something unique. As long as there’s demand, I’m confident in my pricing. My goal is to strike a balance between covering my costs, making a profit, and delivering value that makes my customers feel good about their purchase. I want them to walk away feeling like they made the right choice

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