Your Price List Is Older Than Your Costs

Your costs changed five times this year. Your price changed zero times. Here's how to catch up, and it doesn't take software.

Here's something that happens to almost everyone and almost nobody notices.

You set your price at one moment in time. You had a quote from the factory. You had a freight number. You had a rough idea of duty. You did the math, picked a price, and printed a sheet.

Then the ground moved under it.

Freight moved. Duty moved. Your factory raised a component. The box got more expensive. And none of those things arrived as a decision you got to make. They arrived as invoices, weeks apart, from four different people, none of whom knew what the others had sent you.

So your costs changed five times and your price changed zero times.

One owner said it better than I can: they're finding it genuinely hard to price right now because landed costs change almost every month. They try to estimate, and sometimes they're way off.

Way off. That's the honest version.

Why This Is So Hard (It's Not the Math)

The math here is fourth grade. That's not the problem.

The problem is that the number you need lives in six places, and none of them talk to each other. The factory invoice. The freight bill that shows up three weeks late. The duty. The packaging order. The breakage. And somebody's head.

By the time you could pull all of it together, you've already quoted the buyer. So you quote from the old number. The one that was true a year ago.

That's not carelessness. Nobody ever asked you for the real number, so nobody ever built it.

Three Things You Can Do This Week

None of these need software. They need an hour and a pen.

1. Pick your single biggest product by units. Just one. Add up everything it costs to get it onto your own shelf. The factory invoice, the freight, the duty, the box, the insert, the barcode, the breakage. Everything. This is your true landed cost, and most owners have never written it down in one place.

2. Divide your retail price by that number. That's your multiple. Is it four? Seven? Ten? That one number tells you more about your business than almost anything else on your books.

3. Now look at your wholesale price for the same product. Ask whether the multiple still leaves anything behind after a distributor and a retailer both take their cut. If your multiple is four, there may not be enough room in it for two more hands.

Why the Multiple Matters So Much

That single number quietly decides three of your biggest calls.

It decides whether you can afford to sell wholesale at all. A distributor and a retailer both need to make money on your product. Thin multiple, no room.

It decides whether a marketplace is worth doing, because fees, storage, returns, and ads all come out of that same room.

And it decides what happens when a big account asks you for half off. Sometimes half is a great deal. Sometimes half is a polite way of asking you to work for free. The multiple is how you tell which.

The Honest Part

Most owners can tell me their retail price instantly and their true cost never. Not the invoice cost, which everyone knows. The real one, with everything in it.

If the number you find is a little embarrassing, it's still the most useful number you'll get this year. I've looked at plenty of businesses where the answer was worse than the owner hoped. In every single one, finding out was the thing that changed the year.

One product. One hour. Every cost. Start there.

Want a second set of eyes on your multiple? Book a call here: https://thriveworks360.com/pre-book-a-call

and tell me about your product. I'll look at the real number with you and tell you honestly whether it's safe. No pitch, just the arithmetic.

Not ready to talk yet? Join our free community here: https://thriveworks360.app.clientclub.net/communities/groups/thrive-growth-community-free/home

for more of this thinking, every week, free.

Nathan