Pricing is one of the most important aspects of your business
I have been wanting to blog about this subject for the last two weeks as I am reviewing my pricing for Spa Boutique and have had to revise my pricing THIS WEEK due to a few reasons. Pricing is one of the five P's of traditional marketing. It will drive whether you stay in business or not.
I want to share what has worked for me in the last few months. We are going through a trying time but those who "pull up their socks" and pay attention, will win big.
Pricing will determine your profitability. If you are not charging enough for your services, then you will go broke. It's that simple. You need to understand your costs and not overspend. If you charge too much, then your customers will notice as well. In retail, we deal with SRP (Suggested Retail Price) which is given to us by distributors and manufacturers, and we are told not to go below this price. If you choose to go above, then that is your perogative. Remember your customers will notice if you go too high.
Costs for any business will go up annually so it's important to keep up with price increases or understand which part of your business can maintain no increase. You need to analyze sales over the last year, how much it cost you to be in business (COGS) and understand what can the market sustain. I decided to increase my prices on December 1st, 2008 due to my gift certificate sales during the holiday season. I did not want to sell gift certificates at the old prices even with an economy that is slowing down.
This January, I was able to renegotiate with two of my skin care distributors for Spa Boutique to gain volume discounts. I decided to pass this savings on to my customers and be very competitive with American Crew and Joico hair care products as well as Gehwol, Intaglio, Skeyndor and Footlogiz products. I am interested in growing my customers and being able to offer more variety to my customers. Other small business owners may have made a different choice. My NEW PRICE does make sure that I can support the cost of the new product and shipping it as well especially if it is heavy.
I hope these sharings help you.
Cheers!
Nancy
Owner of Le Petit Spa, www.lepetitspa.ca
Owner of Spa Boutique, www.spaboutique.ca
Labels: small business entrepreneur, spa gift certificates, spa in vancouver, vancouver spa gift, Vancouver spa gift card, vancouver spa gift certificate















