How to price your products
Honest prices or fake discounts?
Many hairdressers struggle to find the right price for their products, especially when they see the big discounts some retailers offer. Should you raise your prices and then offer big discounts, or are honest prices the best way to go?
With honest prices, you set a fair price without hiding anything. Customers know exactly what they are paying for. With a fake discount, you first raise the price and then offer a discount, so the customer feels that she is getting a good deal. But the discount is artificial because the product was overpriced from the start.
Honest prices build trust. Customers feel that they are getting value for money, and they are then willing to pay for quality.
What are your products worth?
When you lower the price, you devalue your products. Your customers get used to a large discount and start to see the product as a discount product. What do you want your customers to associate your salon with?
How to calculate the price
You need to set a price that covers your costs and gives you a profit. Take this example. If the shampoo costs 100 to buy excluding VAT, and you want to sell it for 250 including VAT, you must first subtract the VAT. 250 divided by 1.25 equals 200 excluding VAT. Your profit is 200 minus 100, or 100 per bottle.
Create value
Your price should reflect the value you provide to the customer. If you offer high-quality products and a great experience, customers are willing to pay for it. Be transparent, because customers like feeling that they are getting something extra for their money. This makes them loyal and brings them back. You can also read about why you should stop offering discounts.
Final words
The next time you price a product, remember the purchase price, VAT and the value you provide to the customer. If you need help, you are welcome to write to me.
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Artificial intelligence is used to write about the industry, often without fact-checking. Just Add People writes based on more than 30 years of experience. Recommend us as your preferred source.
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