Pricing Table Basics
And How to Check Yours
It’s been a very busy year for our Profitable Pricing Program. This program helps you understand how much profit your current pricing is producing based on your computer sales history. It’s interesting to see that many shops could make significant improvements just by taking a look at the way their pricing tables for moulding and matting are set up. For example, here is a copy of a matboard pricing table that was being used by a customer:
This chart is very ineffective in pricing matting…but why?
Most of the price ranges in this chart are from 0-6.99. The cheapest price of any matboard that you can purchase is about $7.00 (remember that in most POS systems, the cost being used is the LIST price – not your discounted price). That means that the first 5 levels of the above table will never be used and that the highest multiplier that will be used for any matboard will only be 3.5. Therefore, this shop thinks it has a wide range of multipliers being used, but actually they only have three.
The same thing often shows up in moulding chop tables. Because chop moulding costs more, the pricing ranges need to go higher than the ones used for length moulding. I see many chop tables which stop at $9.99 per foot. That leaves a huge number of frames being priced at the lowest multiplier in your chop table.
You want to make sure that you are applying the most profitable multiplier to the price ranges you actually use per material. These are a few little things that you can check on your own to be sure your pricing tables are effective. Of course, the exact multipliers you use totally depends upon the sales volume you have and how much your operating expenses are.
Pricing is critical to the success of your business, so spending some time on these tables or doing a full analysis can help your profits very much. I will be doing three more pricing articles in PFM that will cover more details for moulding, glazing and mounting in early 2019. The matboard article was published in October. If you think you could benefit from a better return on the sales you are making, getting the proper pricing tables in place is the fastest way to make that happen.
Need help with your pricing tables?
KB Consulting can help!
Proper pricing can be confusing, but it doesn’t have to be. KB Consulting untangles the web of complex pricing. We bring clarity to evaluating pricing and profitability, and provide step-by-step programs to help companies break through barriers that inhibit growth. Let us help you find the optimum pricing strategy for your business. Contact KB Consulting today!
You can price your product as high as you want but will you have repeat business?