Issue link: https://docs.hic.us/i/403552
Embroidery Pricing Myths Myth #1 – All Single Head Shops Charge $1.00/1000 Stitches As Their Basic Price This is a very common misperception. By doing this you are assuming that all single head shops have the exact same overhead and that all single head shops are equal. The price you charge must be based on what it costs to produce, not on what someone Myth #2 – If I Know My Competitors Prices, I Can Simply Charge 5- 10% Less And Get All The Business As stated above, your prices must be calculated to ensure that your making a profit. While its helpful to know what the competition charges, you cannot simply lower your prices to compete. By doing this you assume that: 1. Your competition has the same overhead as you. 2. Your competition has based their prices on the calculated cost of doing business. 3. Your competition is unwilling to drop his prices in response. Price wars are dangerous and rarely does anyone win, including the customer. Focus on profitable orders and ignore the rest. Myth #3 – If You Give Me A Really Good Price, I Will Bring You Lots Of Business Customers love to drop this line on you. Bottom-line, if you give him a break today, he will expect it forever and there is no guarantee that he will bring in additional work or send other people to your shop. Never give a discount based on a promise of future work, unless there is a written contract involved. As an alternative, you can reward the customer who really does follow through on such a promise. Also be aware of the customer who asks for a quote on 500 pieces, then proclaims that he only needs 12 pieces today, but since he plans on getting the rest soon, he expects the 500 piece price. Myth #4 – If I Have Money Coming In The Door, Then I'm Making A Profit There is a big difference between making money and making a profit. Money coming in the door is known simply as revenue. You achieve a profit, when your revenue is greater than your expenses. There are plenty of companies who have a steady stream of work, but aren't making any profits. Myth #5 – Someone Else Will Do It Cheaper Actually this can be quite true, as it seems as if there is always someone willing to go lower on price. But when a customer throws this statement in your face, he is probably bluffing and simply wants to see if he can get you to www.hsi.us care@hsi.us 150