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How To Price Your Products

One of the easiest, best ways to make more money in your small business is to properly price your products. Find the sweet spot of pricing, and you’ll have great revenues, at good margins. Go too high, and you risk losing potential business. Go too low, and you leave money lying on the table, and you also could jeopardize the financial health of your business.

In order to price the products in your small retail business, you first need to know your cost of goods (COG). Cost of goods is a fancy term for the amount it costs you to produce or procure (buy) the product.

Manufacturing COG For Products

If you’re manufacturing or producing a product, the cost of goods is the amount it costs you to make the product – parts, materials, and labor included.

Distribution COG  For Products

If you’re distributing a product, the cost of goods is the amount it costs you to buy the product from the manufacturer.

The Top End Of What You Can Charge For A Product

Once you accurately pin down your cost of goods (which can sometimes be tricky), that becomes your “floor.” Unless you’re drastically reducing the price of the product for marketing reasons, you should never sell a product for less than its cost of goods.

Your “ceiling” is the amount the market will bear. In general, how much will most people or businesses pay for the product? That’s your ceiling. In between your floor and your ceiling lies the sweet spot of pricing, one which will make you competitive and allow you to sell high volumes of your products.

The Top Factors That Influence Pricing Of Products

These are the primary factors that influence how much you should charge for a product:

A small business coach can help you do a complete analysis of the pricing structures for your products.  Schedule your free consultation with one of our small business coaches, or e-mail us at

Click here to learn tips on how to price the services in your small business.

Please note: We provide coaching and consulting services for small business owners across Denver, Colorado, and the U.S. For more information call our offices here at (720) 312-8737, or e-mail