Are You Too Expensive?

It’s interesting to do what I do. Lately most of my time is spent helping framers make more money. Often this involves determining the correct pricing structure for their custom products and then resetting their POS systems to produce those prices. Many times my analysis shows that the company needs to raise prices to make money. This is where the “interesting” part happens.

Sometimes I create a plan which significantly raises prices and the framer accepts the new plan and everything resumes for them like nothing happened. Often however, I suggest small price increases and the framer reports that the prices are too high and they are uncomfortable with the new pricing strategy. In cases like that I create a new strategy for them that raises prices more slowly- maybe in 2 or 3 steps. I often wonder why some framers get price resistance on small increases and others report no problems with higher prices.

I’m guessing that many of those who experience anxiety about even small increases judge the pricing of their products according to their own personal spending priorities. The truth is that many of us work in an industry which we would not patronize. Many of us either don’t really believe in the true value of what we produce or we simply can’t afford it. The irony is that one of the reasons we can not afford it is because we under charge for what we do!

It’s very clear to me that successful framers have less difficulty charging higher prices. But the question is what came first? Was it the ability to feel comfortable with higher prices because they are in demand or are they successful because they always used a pricing strategy which guaranteed a profit? I think I know the answer- do you?

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