One question I get asked all the time is: “How much should I be charging for my product?” It’s a tricky one! If you put too high a price on your product, no one will buy it – as simple as that. If you price your product too low, you’ll never make a profit.
The advice I always offer is to avoid working for free. By this, I mean that you should work hard to ensure your price is attractive to both your customers and to you, and to employ strategies and tactics to keep your pricing profitable.
There are a few really simple ways to find and maintain this price point:
TIP #1 Have confidence. Know what your product is worth, and why it’s worth that. It’s really important for you to have faith in what you’re selling. Even if you’re not the best salesperson in the world, if you’re passionate about what you’re selling, this will come across in your sales pitch, and customers will believe in the product and pay a reasonable price for it.
TIP #2 Add it up. A mathematical way of setting your price is to consider the price you pay for the product, then add on your total overheads, sales and marketing expenses. Then add on a profit percentage – in corporate gifting this figure is around 120-135%, while wholesalers average around 30-40%. Retailers usually add a 100% mark up on the cost of goods.
TIP #3. Upsell A great way to boost your average sale is to upsell. Before you drop the price, offer your customers an upsell to their purchases. Most value-adding offers cost nothing to the retailer, but are of benefit to the customer, like gift-wrapping or free postage. Make the most of in-store and online promotions, and use clever incentives to move old stock that will make way for new arrivals by offering gift with purchase when a minimum spend is reached by your customer.
TIP #4. Partner up. Collaborations and partnerships are a great way to price for profit. Seek out joint ventures with like-minded wholesalers and retailers – those who share the same audience as you. Partner up with bigger corporates for gift giving, and do a dual promotion, training session, or in-store workshop.
TIP #5. Increase your cash-flow. Look beyond the single consumer, and make a beeline for those customers who will buy in bulk on a regular basis. Target bigger businesses who purchase on a weekly or monthly basis – for instance, real estate agents who might benefit from providing settlement gifts, or companies that offer monthly box subscriptions. If you’re a Wholesaler then target and grow your monthly stockists and distributors to build up cash-flow consistency and volume orders.
Don’t put off your business success any longer. There’s no better time than right now to invest in yourself and your business. You’ve worked so hard building your gift business up to this point. Maybe now it’s time to kick it up a notch.
If this is the year you would love to rapidly scale your Gift Business sales and want to action, I’m currently inviting just a select number of people a ‘Complimentary 45-min Business Strategy Call’ (valued at $297) but yours FREE. Book your place now.
Hurry secure your spot now!
To your success…