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  1. #1
    unpakwon is offline Senior Member
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    add on a percentage

    The following in red is confusing. Please paraphrase it more easily.

    This information gives you some important input into your strategy and a check on your cost structure, but it is only the very beginning of your pricing journey. Do not be tempted to take your costs and simply add on a percentage for profit. You will be leaving money on the table but, more importantly, you will be sending the wrong signals to your customers.

    Thank you.

  2. #2
    Gillnetter is offline Key Member
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    Re: add on a percentage

    Quote Originally Posted by unpakwon View Post
    The following in red is confusing. Please paraphrase it more easily.

    This information gives you some important input into your strategy and a check on your cost structure, but it is only the very beginning of your pricing journey. Do not be tempted to take your costs and simply add on a percentage for profit. You will be leaving money on the table but, more importantly, you will be sending the wrong signals to your customers.

    Thank you.
    Say that you, as a business person, pays $1.00 for a book which you will resell. Do not merely add 50% to the cost of the book when you put a retail price on the book. The book may sell just as well if it is priced 100% higher than your costs. By being tempted to sell the book for a low price, by not adding on a higher price you are not getting all the money you could from a sale - this is called leaving money on the table.

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