December 17, 2022

Do your costs matter?

In order to run a successful business, your prices need to be higher than your costs.

Otherwise you’ll lose money on every transaction and quickly go out of business.

This much is obvious.

What is probably not obvious is that your costs need not have any bearing on your decisions about what prices you set.

The thing that really matters when setting prices is the value to the buyer.

As long as your prices are lower than what your product or service is worth to the buyer, the cost to you as the seller is largely irrelevant.

Yours,

—J

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