Re: pricing a product with high cost of materials
Posted by John Iverson on July 09, 2000 at 12:11:19:
In Reply to: pricing a product with high cost of materials posted by Luann Udell on July 03, 2000 at 11:46:27:
Pricing decisions are the most difficult of all. You should click on the FAQs button on the menu and review both Pricing Your Work and the one Price Elasticity of Demand.
The advice the gallery gave you to start low is good advice -- for them. It's always easier to sell a lower-priced product than a higher-priced one. However, I've always found it a lot easier to lower prices than raise them.
When you set your price initially, you are pretty much locked into it -- it's hard to raise the bar after that, unless you have a product folks cannot do without.
As you'll see in the FAQs, fine jewelers have the lowest margins and profit ratios of any media. To make the numbers work for them, they have to have a higher volume.
My question to you is: are you paying a premium to have this pretigious framing company do this work that you really aren't getting any sales benefit from? In other words, a decent framing job done cheaply will not detract from what you are trying to sell, whereas you really aren't selling premium framing here, and your customers probably don't care where you had it done as long as it looks good with your work.