On Thu, Jun 04, 2009 at 09:27:16AM -0600, William Robb wrote: > > Everything I learned about pricing, I learned from Klaus Bohn, a > particularly talented and successful portrait shooter who makes his home > in Moose Jaw, of all places. > Heres what he said: > If you drop your prices 10%, you need a 40% increase in sales volume to > return to the same level of real income. > I don't know how much of this is true, how much is hyperbole, but it does > have a ring of truth to it.
That's pretty much true, although it depends on what your profit margin is. If your profit margin is 35% of the price you charge the customer, then for every $1000 of gross income you're going to end up with $350 in your pocket. If you drop your prices by 10% then that comes straight out of your bottom line - for the same amount of work (and expenses) you're now only going to end up with $250. To get back up to $350 you need to get 40% more work. If your profit margin is higher than 35%, you don't need to increase your workload by as much; if it is less, you'll need to increase it more. 35% (which is the figure that makes 40% the right number) is quite reasonable. -- PDML Pentax-Discuss Mail List [email protected] http://pdml.net/mailman/listinfo/pdml_pdml.net to UNSUBSCRIBE from the PDML, please visit the link directly above and follow the directions.
