How much do you NEED customers to pay?
The price you charge should be your total costs + the amount of profit you want to make. So before you do anything else, make sure you've got a good handle on everything you spend to keep your business running.
Some costs will be fixed, such as rent, rates, wages, loan interest, office admin. Some costs will vary according to the amount of sales you make, such as stock, raw materials, sales commission, fuel.
How much would you LIKE customers to ?
That depends to a great extent on how you market your product. Some retailers get away with huge profit margins becuase they create the impression that what they're offering is premium quality and superior to other brands in the market. Other retailers generate business by being the cheapest or the most easily available. Whichever you choose make sure everyting you do, from your logo to your packaging to your invoicing, is consistent with this image.
What if you're not earning enough?
DON'T lower your prices to try and sell more. Think of ways you could:
- Increase the number of sales you make
- Increase the number of times each customer buys from you
- Increase the amount of money each customer spends with you
- Reduce your costs
- All of the above!