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Putting prices up

pcnutta Avatar
5y, 11m agoPosted 5 years, 11 months ago
Hi all, my 2nd job is I own a beauty business. Its more of a part time/hobby thing which i do on my days off my * real* job lol
Yep i am a work-aholic. People keep telling me that with the VAT increase I ought to think about putting my prices up slightly as i am one of the cheapest around as it is. Ive dont my research prior setting up and i am probably THE cheapest in my town. I have written a new price list incase i do put them up but not sure as my theory is, people will be struggling in the new year as it is - do i keep my prices as low as they are - or increase them - means i would still probably be one of the cheapest anyway. Ive only put 50p on the treatments, and even done a 2 for £10 offer for incentive. Whats your thoughts? Do i NOT increase my prices and be MUCH cheaper than everyone else - or slightly increase to absorb the VAT rise?
pcnutta Avatar
5y, 11m agoPosted 5 years, 11 months ago
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#1
depends, what do you charge for extra's. :p
#2
Depends on what sort of profit you are making

I havent put my prices up for 3 years solely because its my low prices that keeps generating new business
#3
your materials will be going up so your profits will be lower due to the rise.....increase by 2.5% which then pays for the VAT rise.
#4
does your second business make enough to be vat registered?
#5
I'd perhaps delay it a month or so as January (and sometimes February) is always a bad time finances wise for most peeps.....that allows you to see what everyone else is doing come January and if they are increasing their prices you can follow on a few weeks later and if they aren't you're still the cheapest in your area.

Don't run my own business but the above seems to make sense to me but I maybe completely wrong :)
#6
bossyboots
Depends on what sort of profit you are makingI havent put my prices up for 3 years solely because its my low prices that keeps generating new business

is that the cleaning company or the "dungeon services?"
#7
My suppliers who i purchase off will be increasing their prices - so do i absorb that or pass them on.
People keep saying im too cheap so maybe a slight increase wouldnt hurt?
#8
barky
bossyboots
Depends on what sort of profit you are makingI havent put my prices up for 3 years solely because its my low prices that keeps generating new business


is that the cleaning company or the "dungeon services?"


both!
#9
pcnutta
My suppliers who i purchase off will be increasing their prices - so do i absorb that or pass them on.
People keep saying im too cheap so maybe a slight increase wouldnt hurt?


Sounds like you have made your mind up tbh. Your line of business will be really quiet in January I reckon so you need to take things like that into account too.
#10
Ive neen snooping other businesses and even putting mine up i would still be one of the cheapest.. sister thinks i should play and promote * no price increase* to generate new customers -- hmm dnt know
#11
pcnutta
My suppliers who i purchase off will be increasing their prices - so do i absorb that or pass them on.People keep saying im too cheap so maybe a slight increase wouldnt hurt?

you dont want to be TOO cheap-there comes a point where it actually puts people off I think-If mrs barky saw someone advertising they could do her hair for half what she currently pays she would assume(rightly or wrongly) that they werent very good. I think she isnt the only person with that mindset.
banned#12
I don't know much about business but I wish you all the best in the new year x x
#13
Keep the basic treatments at current price, round up the rest a little to offset some of your cost increases
#14
you are right barky - ive had that said to me too.. never be too cheap as some people think your products and ability isnt all that good.
#15
Generally most consumers don't notice a price increase unless the increase is significant. Vat is only going up 2.5%, i don't think most people would notice if you put your prices up in line with that.

Normally consumers consider price increases to be unfair, however they are more inclined to find the increase in price fair if it due to a rise in the cost of production. I would suggest you put your prices up, but make sure that if a customer notices you say that it is because of the increase in Vat.

Apologises for this long reply, i've just had to write an essay on how consumers respond to price change so im abit of an eager beaver.


Edited By: iamrofe on Dec 20, 2010 15:09: i wanted to edit it
#16
Not giving figures OP - how is your profit margin?
banned#17
If your still going to be the cheapest after the rise its not going to drive customers away
#18
eg - manicure has been £8 i was thinking of just £8,50
Spray Tans i charge £10 thinking of putting it to £12 ( not much profit when i charge £10)
Eyelash extensions currentlt £40 ( still 25quid cheaper than anywhere else here) thinking of £42
#19
Approx 30% , somethings 50% though i am putting everything back in as its my first year - paying back my training and set up costs still xx
bossyboots
Not giving figures OP - how is your profit margin?
#20
pcnutta
eg - manicure has been £8 i was thinking of just £8,50Spray Tans i charge £10 thinking of putting it to £12 ( not much profit when i charge £10)Eyelash extensions currentlt £40 ( still 25quid cheaper than anywhere else here) thinking of £42

I know this is really obvious, but by pricing your items at 7.99 instead of 8.00 does make the price seem cheaper. If you do this make sure you have plenty of pennies in the till!
#21
barky
pcnutta
My suppliers who i purchase off will be increasing their prices - so do i absorb that or pass them on.People keep saying im too cheap so maybe a slight increase wouldnt hurt?


you dont want to be TOO cheap-there comes a point where it actually puts people off I think-If mrs barky saw someone advertising they could do her hair for half what she currently pays she would assume(rightly or wrongly) that they werent very good. I think she isnt the only person with that mindset.


Thats true and people may think that your prices include the 2.5%. I'd increase it by 2.5% but every now and again have "sales" where you point out that your not charging the 2.5% VAT.

You could be really cheeky and up it by 10% then straight away, blame the VAT rise and then have a 5% sale shortly afterwards. I presume alot of firms will do that to make deals sound better than they are.
#22
pcnutta
Approx 30% , somethings 50% though i am putting everything back in as its my first year - paying back my training and set up costs still xx
bossyboots
Not giving figures OP - how is your profit margin?


Did you apply for any start up grants? I got two and never knew anything about them - was thanks to the Business Gateway who were brilliant. We didnt need to pay them back either.

All the best with it - nice to hear of a business that is growing successfully as it does take time, patience and a lot of hard work :)
#23
Thats interesting :) Customers probably expect a slight increase
iamrofe
Generally most consumers don't notice a price increase unless the increase is significant. Vat is only going up 2.5%, i don't think most people would notice if you put your prices up in line with that. Normally consumers consider price increases to be unfair, however they are more inclined to find the increase in price fair if it due to a rise in the cost of production. I would suggest you put your prices up, but make sure that if a customer notices you say that it is because of the increase in Vat. Apologises for this long reply, i've just had to write an essay on how consumers respond to price change so im abit of an eager beaver.
#24
i didnt hun, i paid for it out of my savings - I didnt know about any help until after! LOL typical.
I will pm you my website now ( hubs made it ) its where i get alot of my business from. You will be able to see my current prices xx
bossyboots
pcnutta
Approx 30% , somethings 50% though i am putting everything back in as its my first year - paying back my training and set up costs still xx
bossyboots
Not giving figures OP - how is your profit margin?
Did you apply for any start up grants? I got two and never knew anything about them - was thanks to the Business Gateway who were brilliant. We didnt need to pay them back either.All the best with it - nice to hear of a business that is growing successfully as it does take time, patience and a lot of hard work :)
#25
Specials im thinking of doing are -
ANY 2 AREAS WAXED FOR £10 ( SEPERATE PRICES RANGE FROM 5.50 TO 7QUID)
EYELASH AND EYEBROW TINTED FOR £10 ( SEPERATE 6.50 AND 5.50 )
I really hate being undecided ! lol
#26
Good luck with whatever you decide to do - you sound like you are a very driven lady and with the ambition you have I'm sure you'll do well, keep up the good work and Merry Christmas :)
#27
pcnutta
Specials im thinking of doing are -
ANY 2 AREAS WAXED FOR £10 ( SEPERATE PRICES RANGE FROM 5.50 TO 7QUID)
EYELASH AND EYEBROW TINTED FOR £10 ( SEPERATE 6.50 AND 5.50 )
I really hate being undecided ! lol


I would expect to pay £6 - £8.50 for an eyebrow wax, to have two areas for £10 seems really cheap - a little too cheap.
In all honesty as someone who hasn't heard of you before I'd wonder if you were a trainee.
#28
Coming from someone who also runs a non office based business, putting your prices upto a level where you can make a living, unless this will always be a hobby.

I am guessing your a mobile manicurist? You need to put stuff such a petrol, products and your time in. I wouldn't want to earn £3 an hour when I can earn £8 in a supermarket.

Never be the cheapest as people will expect the earth for very little (I have been there and done that). I upped my prices by over 50% after speaking to some others in my industry and my order book is a lot busier than it ever was.

You have an advantage over salons as you don't have the shop overheads and customers can call you out when it suits them, so you can easily undercut the salons but be competitive with others in your town. Don't be the cheapest. be the best...

If you would like to too look at your site and give you some hints and tips to improve the clicks. sales etc then pm me the url...
#29
Thanks hun i will pm you my site now xx
#30
It depends where you live i think.... around here eyebrow waxing is about 5.50 - 8.00 in the most expensive salon. ( people come to mean moaning about paying the £8 at this particular salon! lol)
Same as nails - Full set of Gels are anywhere between £20 - £45
sickly sweet
pcnutta
Specials im thinking of doing are -ANY 2 AREAS WAXED FOR £10 ( SEPERATE PRICES RANGE FROM 5.50 TO 7QUID)EYELASH AND EYEBROW TINTED FOR £10 ( SEPERATE 6.50 AND 5.50 )I really hate being undecided ! lol
I would expect to pay £6 - £8.50 for an eyebrow wax, to have two areas for £10 seems really cheap - a little too cheap.In all honesty as someone who hasn't heard of you before I'd wonder if you were a trainee.
banned#31
I can see how smaller businesses may suffer with the VAT rise, just pass on the extra to the consumer to pay , I'm pleased our business is VAT registered - we can claim all the VAT back on purchases , including fuel which is a big help
#32
Put your prices up so that they are still competitive but you are making more of a profit.

Advertising and word of mouth is the name of the game in your line of work.
#33
goldmax
I can see how smaller businesses may suffer with the VAT rise, just pass on the extra to the consumer to pay , I'm pleased our business is VAT registered - we can claim all the VAT back on purchases , including fuel which is a big help


Mines too - and yeah it does make a huge difference!

OP had a look at your website - which looks great btw!! Hard to judge your prices as I would imagine some areas more expensive than others but your prices do seem good. You have only been going for 6months (I think) so maybe wait a wee bit longer before putting them up..........unless it is just the vat increase your going to pass on.

All the best with it!!

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