add on a percentage

[unpakwon]

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.

 

[Gillnetter]

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.