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What all Costs to take into consideration while coming up with Pricing

by kumar
6 replies
Hey Guys,

I am developing the price points for my upcoming Postcard Marketing service, and wanted to understand what all costs should I add up while calculating my Selling Price.

My literal costs are: Printing, Designing and Delivery.

My Overhead costs are: Rent and Fuel.

What else should I add up? I am a one-man show right now but envision expanding my business very shortly.

Should I add my Salary and Reinvestment into business in the Costs head or do I draw them from the eventual Profit?

What about commissions and salaries to employees down the line? Should I factor them in right now, or when I actually hire them?

Thanks!
#coming #consideration #costs #pricing
  • Profile picture of the author maxrezn
    Originally Posted by kumar View Post

    Hey Guys, I am developing the price points for my upcoming Postcard Marketing service, and wanted to understand what all costs should I add up while calculating my Selling Price. My literal costs are: Printing, Designing and Delivery. My Overhead costs are: Rent and Fuel. What else should I add up? I am a one-man show right now but envision expanding my business very shortly. Should I add my Salary and Reinvestment into business in the Costs head or do I draw them from the eventual Profit? What about commissions and salaries to employees down the line? Should I factor them in right now, or when I actually hire them? Thanks!
    The No B.S. Pricing Strategy by Dan Kennedy. Amazing book. It explains how to price yourself.
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    • Profile picture of the author kumar
      Originally Posted by maxrezn View Post

      The No B.S. Pricing Strategy by Dan Kennedy. Amazing book. It explains how to price yourself.
      Thanks Maxrezn, looks an interesting read. What does the book recommend about costs that you should add up for developing the pricing?
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      Life is not a sprint, its a marathon. A bad start does not really matter too much

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      • Profile picture of the author maxrezn
        Originally Posted by kumar View Post

        Thanks Maxrezn, looks an interesting read. What does the book recommend about costs that you should add up for developing the pricing?
        From what I understood, it doesn't really recommend that direction. You will leave a lot of money on the table taking that approach. What I do is work backwards. Figure out how much value you are providing, and then charge with that number in your head.
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  • Profile picture of the author Aaron Doud
    I think in something like postcard advertising you need to have a rate sheet aka set pricing. So I don't think what max suggested works for it.

    For post cards I would point you to Bob Ross and his systems. He appears to be our expert on it. At least when it comes to the every door system. I wasn't sure if you were using that or a least the customer provided.

    Some basic costs to consider.
    Printing
    Mailing
    Design (figure how long it will take and times that by $100/hr)
    Depending on what that number comes out to I would times it by 2 to 10 for your pricing. You need to be competitive but IMO you should at least charge double your costs.
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    Aaron Doud - Sales & Success
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    • Profile picture of the author kumar
      Originally Posted by Aaron Doud View Post

      I think in something like postcard advertising you need to have a rate sheet aka set pricing. So I don't think what max suggested works for it.

      For post cards I would point you to Bob Ross and his systems. He appears to be our expert on it. At least when it comes to the every door system. I wasn't sure if you were using that or a least the customer provided.

      Some basic costs to consider.
      Printing
      Mailing
      Design (figure how long it will take and times that by $100/hr)
      Depending on what that number comes out to I would times it by 2 to 10 for your pricing. You need to be competitive but IMO you should at least charge double your costs.
      Yeah, I am using Bob Ross's awesome system. He does share some very valuable tips on pricing, but I just wanted a few more perspectives from the members here on general pricing.

      Interesting you mentioned about charging at least double your costs, which is basically gaining a minimum 100% profit, is it? That's a huge profit margin.
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      Life is not a sprint, its a marathon. A bad start does not really matter too much

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  • Profile picture of the author bsbear
    I feel like pricing in of itself is really one of the hardest parts of putting a product or service together.
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