> > Whatever happened to the concept that you build your "costs" into the
price?
>
> The original post had to do with the fact that a part that cost 57
cents
> was ordered. So what would the price be by building in your "costs"?
>
> Cheers,
> Steve K7LXC
> Champion Radio Products
Great question Steve - I can't say what the costs of a given company (other
than mine) are, but I can tell you that I personally don't believe in
"nickel and diming" people.
I would suggest to any business owner that they figure out what all their
expenses are, salaries, packing materials, cost of materials, cost of
inventory, insurance, telephone, etc. etc., and then figure out their
desired profit margin, and mark up their product/service prices accordingly.
And then ONLY add the actual shipping costs, sales tax, etc.
As a general rule, I don't bill for something unless there is enough time
and effort expended to make the actual time spent billing, a neglible
expense. So, for example, if a client or a non-client who is sincerely
interested in what I do calls me up and spends 20 minutes on the phone with
me, I don't bill - I consider it an investment in my business.
If I have to spend $15 on overnight mail to get something of value to a
client or potential client right away, I do it without hesitation. I eat
the cost. $15 is trivial compared to the goodwill and future business any
good relationship can generate.
I work longer hours to make it possible. Sometimes I get nothing out of it,
more often than not, it helps build a good relationship and encourages new
people to work with me. Favorable word-of-mouth "advertising" by clients
happy with me has meant more financial success to my businesses than
charging for everything. Likewise, I make it a point to do business with
and actively support people and companies who give generously of their time
to me (and don't charge "handling") - even if their prices are higher. They
are worth it!
People want to do business with those they like and trust and who treat them
well. People shun those who treat them poorly and attempt to gouge them.
Back to your original question - maybe a compromise - like charging $2 for
one $0.57 part and offering 10 for $8.00, and eating the rest of the cost,
is a good compromise.
73
Bob KQ2M
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