Of course it does, right?
I bet you have not even looked at your pricing in detail within the last year or more. And
no, adjusting your pricing across the board 5% does not count for analyzing your
pricing. That is just a cost of living bump (excuse) to increase pricing.
Let me give you an example of a simple pricing error that I feel has easily cost a
business thousands of dollars:
I wanted a few donuts (who doesn’t) and dropped by my local independent donut shop
who makes really great donuts.
So, I asked for 5 donuts and a muffin (for 6 in a box).
Their pricing showed individual donuts at $1.20 each, of which 5 would be $6.00 or I
could buy a 1/2 dozen for $5.50 (see where this is going).
I only wanted 5 donuts (with a 6th being a muffin). They said take 6 donuts it would be
cheaper. I said just give me 5 and charge me for 1/2 dozen. Hmmmm… This was a
problem!
In the end I paid $6.00 for 5 donuts and extra for a muffin. Still not sure why because a
muffin is only $0.25 more than a donut so it should have been $5.50 for the 1/2 dozen
donuts plus $0.25 for the difference on a single muffin for $5.75.
But, this not a discussion on the extra muffin vs. Donut. Rather, if 5 donuts should be
$6.00 why would you sell 6 donuts for $5.50? Think about it, why not charge $6.50 for
1/2 dozen or at least $6.00 with the 6th donut free.
On the surface it might not be much, but this extra $0.50 (at the very least) that
everybody would pay multiplied by the number of 1/2 dozen donuts they sell during the
day – and let’s say it is 50. Then 50 x $0.50 = $25 per day! Multiply $25 by 365 days
and you get $9,125 that they have left on the table.
Free Money – Gone!
So, where have you left your thousands of dollars? Take a look, I bet there are
countless opportunities.
Thanks, Jim.
