September '15

For the Business of Apparel Decorating

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Page 22 of 120

Vince DiCecco is a dynamic and sought-after seminar speaker and author with a unique perspective on busi- ness development and management subjects, primarily in the decorated and promotional apparel industries. With over 20 years of experience in sales, marketing, and training, he is presently an independent consultant to various apparel decorating businesses looking to im- YOUR PERSONAL BUSINESS TRAINER B Y V I N C E D I C E C C O prove profitability and sharpen their competitive edge. Visit his new website at, and send email to 18 || P R I N T W E A R S E P T E M B E R 2 0 1 5 W ouldn't it be wonderful if an omnipotent source provid- ed winning advice for running your company? A divine intervention to questions like, "Is now the right time to purchase another machine to grow my business?" or "Should I hire another salesperson?" I am often asked if there is a foolproof method for calculating prices for products and services. Well, there is no magic formula. But there are a few key principles you can consider when pricing products. Determining the magic number on products and services is a bal- ance of four widely accepted approaches to calculating prices: • Set prices for "all the market can bear", • Calculate your product's Cost of Goods Sold and set prices us- ing a desired gross margin, • Build a better mousetrap and customers will beat a path to your door, and • Become aware of competitive prices and price accordingly. There are inherent flaws in each of these approaches, however, once comfortable with each principle's merit, you can develop a pric- ing strategy that's a perfect fit for your business. Then, each time you prepare or publish prices, be sure to check them against your unique pricing strategy and stay focused on business goals. But be forewarned: from time to time, you will find it challenging to stick to that pricing strategy even when your conscience tempts you to drop prices in order to capture a piece of business. BALANCING DEMAND First, accept that you will have trouble determining what "all the market can bear" before going to market and selling something. Periodically raise prices to test the waters. Have you ever mistak- enly overcharged a customer for an order, only to find the error after the invoice had been paid? The customer never challenged the price, and instead, gladly paid. Pricing Product Profitably Balance and focus on business goals is key to a successful strategy

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