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Mark Ups and Margins: How to Price Your Print

25 April 2017
Marketing & Selling Print

Mark Ups and Margins:  How to Price Your Print

How you price your print products will have a direct effect on the success of your business. Here are essential considerations when pricing your print.

Keystone Pricing

Most small retailers and resellers use ‘keystone’ pricing as a suitable strategy which is a 50% mark up; if the product cost £5 to buy it is sold for £7.50. Although online businesses may work to lower mark ups, print business have to factor in costs of running the shop, marketing, salaries and machinery on top of Cost of Goods Sold. 50% is therefore usually a good starting point, however as always there are plenty of complications…

Factoring in discounts

Introductory discounts and seasonal sales are a great way to entice new customers, however they must be factored in when forecasting profits. If you’re constantly offering discounts, you’ll see a harmful impact on your margins unless you raise the original price, and therefore the discounted price to compensate. Rather than blanket discounts use them smartly e.g for new customers or loyal customers.

Consider your competitors

Research the pricing of other local printers to see how they compare. If you can afford it you may want to be competitive with cheaper prices, however there are other ways to compete if you can’t match their very low mark ups. Although you don’t want to price yourself out of the market, by offering an amazing customer experience and a wide range of products people will be willing to pay more. Check out Route 1 Print's latest eBook to learn more about this topic: View here

Cost based pricing strategy

The ‘Cost-Plus’ pricing strategy can be a blessing and a curse. Although it can be fairly easy to calculate your expenditure in terms of overheads and product costs, smaller businesses struggle when demand in the market changes. The ‘floor’ price is the lowest price businesses can sell and still cover costs. Small businesses cannot break below the floor, but can only lower the price of costs to avoid running in debt.

Whilst larger companies can afford a lower floor price, it’s vital to figure out what your floor price is, and work on ways to add value to justify higher prices.

Pricing Extra Services

If you expand your services beyond print think about different pricing strategies. For instance, by offering a design service for customers you can justify selling at a higher price or have a lower product price but build margin into the service which customers are less likely to query.

Luxury or Budget?

Choosing a place in the market to position your products can be difficult since smaller retailers can find beating the competitive prices of online sellers hard. Instead, think about the value providing a face to face service offers when pricing print. By coming into a shop and speaking directly to an expert about their bespoke printing requirements and therefore building a relationship, you are adding value to your service which customers will pay for.

Your instore experience will also contribute to the pricing of your products. Behavioural economist Richard Thaler states consumers are willing to pay up to 71% more for a product purchased in a shop with great ambience (Social Triggers).

The experience you are offering will be a determining factor when figuring out how far you want to push your mark up.


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