Podcast Episode 8 - Pricing your product

In some ways, pricing a product is no different from pricing a service. You take your cost of sales, and then work out your business costs and how much of your time it takes to produce an item and there you have it!

But it's not usually that simple. You have to buy minimum amounts of materials, and you have to deal with stock, which can really affect your cash flow.

And if you are dealing with retailers, often big ones, you can take a long time to get paid.

If you are in bespoke, handmade industries, it can be hard to charge what your time is worth to you. Communicating that people need to pay more for an individual item can be tough, but getting the customer to understand the value of something is critical.

It's also easy for product businesses to be a hobby and not a profitable business. The margins are often much smaller than in service businesses and there are lots of extra costs to take into account, along with buyers and price pressures. So it's critical to get your numbers right.

Whether you should sell direct or via a retailer depends a bit on your business and your reach. So you might be able to get into John Lewis, which would reach a different demographic from your business generated via Instagram. But it's making sure that retailers are broadening your scope and not cannibalising your online business. Remember too, that having your own website requires marketing and so on that someone like John Lewis will do on your behalf. But you retain control if you sell direct.

Listen more to my podcast with Laura Harrison, who is a retail expert. 

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The Pricing Queen podcast is produced by Decibelle Creative

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