03/06/2021
“Is 18,000 pesos worth of rug too much?”
Well, yes, if we use the well-known “magic formula” in calculating our commission price:
(Materials + Labor Cost) x 3 = Price or
(Materials + Labor Cost + Overhead) x 3 = Price
But did you know there’s another way to do it? Let me introduce to you the Happy Line Pricing method.
Happy Line Pricing is finding a price that you, as an artist, would be satisfied with, i.e. 18,000. Once you find your happy line, you then proceed to think of ways on how you can present that value through your product to customers who [would see its true worth and would] be willing to pay for it.
In addition, I’d also like to stress how significant your pricing is to your business’ branding. So, if you don’t increase your prices, your venture will most likely fail. For instance, if you price your commissions too low, you will only attract cheap customers and not loyal ones. Cheap customers will always look for brands that offer the cheapest price so eventually, you will be forced to lower your price even more just to retain this kind of customer. The more you lower your prices, the lesser chance you have in scaling up your business since you won’t be able to invest in other essential things like marketing, PR packages, etc.
So, next time you calculate your commission price, try to use the Happy Line pricing then you’ll see, an 18,000-peso rug is definitely worth it.
Credits to Kamila’s Penguin Academy as I've learned so much from them about building your small businesses.