Sure your products and services are invaluable, but you have to put a price tag on them right? Since consumers are more price conscious than ever, we’ve compiled a rough guide on where to start when setting prices in various fields that will help keep even the twitchiest customer happy.
- Retail: Cost-plus pricing dominates in retail space. This is a very straightforward method of calculating prices where you determine your cost (both for the goods and your fixed costs) plus a specific percentage of profit margin. This allows you to find fair prices for a wide range of goods easily.
- Restaurants: A good rule of thumb for menu prices is to find your costs and double it. Now, the costs of your ingredients are only part of that price – make sure to factor in labor for prep time, cook time and clean up. Recent research has shown that the upper limit that most middle-income diners are comfortable spending is about $20.00. Keep this in mind when setting your prices.
- Services: Pricing intangible services is simultaneously the trickiest and the easiest thing on this list. You have the greatest control over pricing here as the biggest cost is going to be your labor, and you can choose to charge hourly or per-project. Cost-plus pricing comes in to play here too, but in pricing services, the percentage of the profit margin is often set by looking at the industry and remaining competitive.
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