How Do You Price Your Custom Products?

April 12th, 2016

How do you determine the price for your products? The goal of a business is to make a profit. However, all too often, many small businesses don't make a profit, because they don't know how to price what they offer. Knowing how to price is critical to success! Here is some information that you should consider when pricing products

Making a Profit: In order to begin the process of pricing products, your need to be aware of the following so you can make sure you are making a profit:

  • Cost of materials.

  • Cost of labor.

  • Cost of operating expenses. Operating expenses can include: Rent, utilities, taxes, insurance, marketing and transportation.

Where to Place Your Business in the Marketplace: Price is not always about making a profit, it can also include where you want to be in the marketplace. Do you want to be known as a high-end competitor or a low cost provider? How do you want to appear in the marketplace? Being aware of this information can help you with knowing where to properly place yourself:

  • Price of your competitors' products.

  • What they are offering for that price. Are they offering better customer service than other competitors or some other perk to their customers?

Consider Front End and Back End Pricing: If you offer financing or add-ons to your pricing, you may want to consider this information in your pricing. 

Be confident: Sometimes businesses under price because they are not confident that their products will sell. This can put you out of business. So, build up your confidence, the confidence of your staff and make sure it shows when selling products and in the way your shop is ran. 

How shopVOX can help:In shopVOX, we make it easy for you to price and quote products. When you add products, you enter all the information needed like your cost, markups, labor charge, machine charge, and other information needed to price your products. Then, prices are computed for you when you create quotes and invoices. To go even further, you can also customize discounts for certain customers and much more. Experience shopVOX custom shop management and the ease of pricing products for yourself.