• Philosophy first—what are we trying to accomplish? Be okay with charging what it costs to accomplish the purpose.
• Communicate value—presentation of benefits compared to clear cost. Sometimes your price is misunderstood because you have not communicated.
• Multiple price points—is it possible to have various levels/quality/options? Be careful not to use too many price points.
• Managing bells and whistles—the extra things not necessary to the philosophy of the item/service being priced. Some add value, some just add cost.
• Change it—don’t be afraid to change it. You will get criticism no matter where it is. If you are not covering costs, raise it. If you can’t sell it, lower it. Pricing never stays in one spot for very long.
• Honorable mention: create margin—your pricing must recognize that you don’t know all the expenses you will incur. You must charge enough to cover the unknown expenses and the known expenses.

Opening Questions

1. What is the perfect price for a backpack?
2. The question will open up the reality that there are many types of backpacks and to find one perfect price is impossible because there are so many different purposes.
3. How do sales impact you?
4. Way to communicate a price; still depends on whether or not the sale adds enough value.

Closing Thoughts

• Make sure you have a set plan—at a time when you have good information about expenses and income—for when and how you raise/lower prices.
• Be creative in your pricing to encourage using your valuable products.
• When cutting prices and thus expenses, make sure you don’t cut off your ability to accomplish your purpose.