Very basic question

[MrsPWN]

I know I should know this BUT I am working out prices and wanted to check if this is viable.
I am taking my basic product, adding all the costs except P&P then doubling it :redface:

It actually comes out about the right RRP, possibly a tad less than similar products which can only be a good thing. I am not allowing anything for NI, PAYE or anything like that. Working from home on my days off I will have very little overheads, what do you think?

and yes I am embarrassed to have to ask lol

 

[hougtimo]

IIRC a lot of stores run at around 100% margins, so it looks like you're about spot on.

If you're still undercutting competition whats the harm in doubling your postage costs too? Don't forget to factor in overheads and of course, make sure after costs have been deducted (tax / vat / overheads) that you have enough left from one decent sale.

Remember that something is worth whatever people will pay for it; so you may not get it right at the start but you'll learn how to fine tune it according to your feedback. You can't price something perfectly first time.

Disclaimer : Don't show the postage cost as double what it actually is. Customers won't like that! Just 'silently' add it onto the price of the item.

 

[MrsPWN]

Cheers I was thinking of quoting the usual £3.50 P&P with orders over £100 free

 

[MrsPWN]

Cheers I was thinking of quoting the usual £3.50 P&P with orders over £100 free

 

[hougtimo]

with orders over £100 free

So ideally you still want to be covering your P&P cost in the cost of the item, IMO.

What do the items actually cost to post?

Really it's all a game. From experience, you can even be charging the "right" amount but people aren't buying because the item price / postage is balanced incorrectly.

I assume that buyer's first impressions will swing a sale aswell, even if you're more expensive than somewhere else...but now we're getting into design!

Just fine tune it over time, and don't quote anything outlandish.

..and don't sue me if it all goes wrong!

 

[MrsPWN]

Apparently I am going to charge P&P twice lol

 

[hougtimo]

Apparently I am going to charge P&P twice lol

That isn't nessesarily what I was saying. All I meant that is from experience, price yourself too low and people won't buy because they will be suspicious.

Unfortunately to answer your question properly one would have to adopt the mindset of one of your customers.

But you sound about right with your ideas

 

[MrsPWN]

Sorry, my weird sense of humour, I double posted on the thread...was funny in my brain

I appreciate your advice

 

[hougtimo]

Sorry, my weird sense of humour, I double posted on the thread...was funny in my brain

I appreciate your advice

Ahhh, I get it now

No worries!

 

[MrJasper1980]

You need to price the product realistically though. If all your competitors are asking far less people will find them and purchase from them instead. Remember, with google it takes only a couple of minutes to find the cheapest price.

In todays economic climate this is what counts the most at the moment.

 

[MrsPWN]

Thanks, I have a bit of a niche going on but still realise that price is everything.

 

[MH1]

Thanks, I have a bit of a niche going on but still realise that price is everything.

I disagree, it's not everything, even in this climate. It never hurts to be competitive, but it's much more important to be profitable, set the right price for your requirements, otherwise why sell it in the first place?

 

[MrsPWN]

Point taken