Not sure if I am getting my pricing right. Could anyone take a look? Thanks

Since I revised my prices, I've been getting feedback from customers that we are priced way too high, but at the prices they want, I'd be losing money. With a lot of fatigue and a bit of self-doubt, I am beginning to think I have made a mistake somewhere.

This is my simplified model using hypothetical figures.


Product Cost = 2,000

Shipping = 1,800

Total = 3,800

Associated costs

0.1 x 3,800 = 380

Total = 4,180

Markup of 1.5 = 1.5 x 4,180 = 6,270

My markup is set at that so that it gives me the flexibility to go downwards to explore discounts when necessary.

I am operating in a premium sector, private labels with a mixed set of products. Feedback on quality is very good and I have gotten return customers and this in a developing market that has been ravaged by Rona. Fully expected it to bomb, but apparently, it's going to do OK.

My questions

  1. Is my simplified model a sensible one or am I missing something? Are the workouts accurate?

  2. Is my markup high? I felt it was high, but if it goes lower and I start working from a lower point, then eventually I will be simply churning $$$ and really not doing much else.


submitted by /u/nicgentile
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