Whether you decide to raise your rates due to increased overhead expenses, a hike in price from your wholesaler, or to create a better profit margin, it's important to do it in a professional and methodical way. As you examine your products and services, consider whether an overall price hike might appear smaller but serve to bring in the same dollar amount.
For instance, if you normally price all of the bears in your toy shop at wholesale plus 50%, but only mark up dolls 25%, would your margin still be okay if you marked all product up at 35-40%? (Be careful there, though, because your doll customers will probably notice someone else now gets a discount! This could be the time to introduce a frequent buyer program for the collector-types who always shop with you.)
Bundling services and using free gifts is another way to offset an apparent price jump. Create an overall raise in prices, but allow opportunities for savings and customers will still thank you.
Be sure that you give regular clients plenty of information in plenty of time. The day you call them to renew an advertising contract is not the time to inform them of the new rates! Your initial contact should be weeks, if not months, prior to when you attempt to close the sale. This allows them to feel informed, rather than blind-sided, and still offers you the opportunity to offer them a VIP rate or package if need be.
If you'd like more information about how and why to raise fees, check out this article over at BusinessKnowhow. Small business coach Karyn Greenstreet has pulled together a nice piece about why and how to bump up your rates.
Comment Preview