Today's tip was simple, "Don't Compete on Price." I love this tip! I spend so much time trying to figure out how much I should charge for everything! It is so time consuming and complicated.
You want to be sure that you set your price so that you cover all your costs and make a profit, but then you don't want to set the price so high people think you are greedy. Then, you have to consider what people are willing to pay and what do other similar products go for. It is really enough to make me just want to throw a dart and see what I come up with. I haven't done that, but you get the idea.
I really do try to set fair and reasonable prices based on what goes into each product. For example, some of my lip balms are priced higher than others. This has to do with the fact that some contain shea and cocoa butter. These are higher quality (and more finicky) ingredients, so they cost more. I recently had someone tell me that it was silly to have to pay more for a different lip balm and you can get ______ brand for $1.50. That really made me consider changing the price!
However, this tip makes me feel better. I can't compete on price with huge corporate products. That is just not feasible. I may not be able to offer a lip balm for $1.50 or a jumbo, economy-sized bottle of lotion for $8.95, but I can offer a great product! I spend a lot of time making my formulas and picking my ingredients for their skincare benefits. Sometimes that means I choose a more costly ingredient, but I chose it because it is worth the additional cost. I shouldn't feel bad about making a great product and charging a fair price for what I do.
This doesn't mean that I won't pay attention to what others are doing or charging. It doesn't mean that I won't continually monitor my prices to make sure that I am charging a fair price. It means that I will continue to offer awesome products at a fair price, but I will worry about what others are doing less.
What about you? Would you rather pay a little more for a superior product or do you prefer to pay the cheapest price?
