Issue link: https://docs.hic.us/i/403552
C C h h a a p p t t e e r r 3 3 – – P P r r i i c c i i n n g g Pricing has emerged as the number one negative issue confronting commercial Embroiderers today. Ask any Shop Owner what is the biggest headache for them, and the answer will almost always be PRICING! Developing a pricing strategy is not terribly difficult, just time-consuming. But the real issue is not calculating price, it's having to stick with those prices once they are established. There is a tendency by many Embroiderers, especially the newcomers to under-charge for everything and compete on price alone. This is a bad move. If you wish to make money, then you must establish and adhere to a profitable pricing structure. If not, then you will certainly fail. It must also be noted, that markets and price work hand-in- hand. You may find that your prices are too high for a given market. The response might be to lower your prices in order to compete within that market. However, if in doing so, you no longer make a profit, then what is the point? In the real world, you will find that you are unable to compete in certain markets price-wise. The solution is to either choose a different market, or develop a competitive strategy based on service not price. Profitability (Or Lack Thereof) You look up at the wall clock through bleary eyes. It's almost midnight and you still have a long way to go. Though you've been hard at it since early morning, the pile of shirts has scarcely been dented. And right behind it, are several more boxes of hats, jackets, and aprons. You pinch yourself hard, hoping to awaken from this nightmare, only to find out it's no dream, it's reality. There is no end in sight to your workload, which would seem to be a positive thing, except in your case it's not. Because in spite of all the hard work, you just don't seem to be making any money. What was it your parents used to say, "Hard work leads to success"? Yeah right! You're working yourself half to death and success, at least financial success, is no where in sight. Does this sound like your life? Lots of work, but no money? Believe me, you're not the only one in the same boat. Hard work only guarantees one thing: that you will be tired at the end of the day. Smart work is what leads to success. The old adage, work smarter, not harder, is very true. Unfortunately, I have seen many Embroidery Shops that are super busy, yet not making a lot of money. (I can relate to this fact since I went through it myself.) A large sales volume does not guarantee profits. When business is booming, it's easy to convince yourself that you're making money, but the bottom line lies in the net sales not the gross sales. You need to know how much it costs to produce every order, then ensure you are making more money on each piece than it costs to produce. This sounds like a www.hsi.us care@hsi.us 140