Op-ed views and opinions expressed are solely those of the author.
Inflation is all around us and all of us are feeling it, no doubt. Carnivore Trading’s analysts are showing our family of Hall of Fame stock traders that your costs are really moving higher, and fast, and we reject the notion that this is transitory. What cost $65 to fill up your truck a few years ago is now costing $125 or more. Milk and meat are going up and by a lot. Levi’s blue jeans raised prices because the cost of cotton has risen so much that it has to raise prices in order to offset some of that increase in their raw materials. Used cars that were $20,000 are selling for $36,000 or $40,000. You get the point.
For fun, I sometimes coach small business people on what they’re doing. I don’t do it for payment, I do it if they’re people I like and that are good at what they do or make. If you deliver good service, or an excellent product, then you’re my kind of person. I like you. You work, you care, you’re out there making things happen. And that is different from 90% of the people and products out there today, so if you ARE one of those people, you’re actually in demand and hard to find. Trust me. I know. I use a lot of services and buy a lot of products. As one of those people, may I suggest that you stop worrying about if your fee for services or your hourly rate or the cost of your cool, superior product is too expensive. Worry instead about the fact that it’s probably much too low.
It’s time to increase your prices, and here’s why. First, your costs are going up. Second, and very important, we live in a unique time right now when everyone seems to have plenty of money to go get what they want these days. I’m exaggerating a bit, but the fact is that in my lifetime I’ve only seen one other period in which the amount of money floating around out there was this robust and that was 40 years ago in the 1980’s. Recognize your worth and charge for it. If you are currently charging $17,500 for a house painting gig, quote $25,000 or $30,000 and tell them why! If you are a tattoo artist and you charge $200/hour, charge $300/hour starting tonight.
I’m the perfect example of a customer for you. I buy a lot of services and products, and I can’t find people to do some of the things I want or need. Do I care if you charge me $1,200 to rewire some things in my house, or $1,900? I really don’t care! I just want the job done now and I have the money to pay for it. The $700 difference doesn’t matter to me. In fact, I don’t even pick the low-cost guy any more. I want to know the guy that charges the most, because that’s the guy that is probably really, really good.
If you don’t get out in front of the inflation that is coming at us every day by raising your own prices, you’re just going to fall behind, but this time, really quickly we believe.
Below are two real life stories that are good examples of what I’m talking about, and I hope you can learn from these and apply it to your own business:
Patrick: A talented tattoo artist, Patrick wanted to increase his income. He doesn’t want to work more hours, he already works hard. He had been charging $200/hour for his work for years and thought that he was kind of on the expensive end in his market. No, I told him, the price doesn’t matter. And I happened to have read about a guy in NYC that charges $1,000 an hour and is booked for the next 3 years, so Patrick wasn’t expensive. I told him to simply raise his price to $300/hour and see if anyone walked away from him after seeing the pictures and videos of the amazing work he had done for others. He hasn’t lost one customer. He just increased his income 50%.
Blake: Blake is a personal trainer with a high quality following of wealthy clients, the beautiful people who all live on the Southern Coast of California. He started making insanely good cold-pressed fresh juice for his clients and they loved it. It is delicious and fresh, and it suppresses my appetite. He came to me and wanted to talk about what he should do with this juicing idea. I told him that the cost of the bottle of juice is irrelevant to customers like me and to ALL of his customers. Since he is not only training people and has a great enthusiasm for health and wellness, we talked about how he is going to increase his juicing business. He delivers the juice in gallons once a week to his subscribers’ homes. He just bought 2 high-output, quality juicing machines and he’s charging $65 per gallon, or if you buy 2 each week, it’s deeply “discounted” to $99 for two. For me, the customer, I don’t care if the bottle is $65 or $25 – I just want the stuff, it’s so good and good for me. I don’t feel the $99 charge because it’s under $100 and yet intellectually I know I’m spending about $400 a month on this. I see it as an investment in myself. Importantly, Blake doesn’t have to work anywhere except along the coast of SoCal where he can build up a business of 500 customers using Instagram and FB and word of mouth. In doing so, he has a $2,000,000 plus business with customers who love him and his juices, and simply don’t leave or cancel. He can net something like $500,000 a year on this business with just 500 customers, most of whom live in $5 million+ houses on the coast and have no issue with investing in themselves and their health.
You are so valuable, all of you, and you don’t even know it! People like you are hard to find. Costs to you and your family are going up, and there are millions of people like me who have the money to pay whatever just to work with great artists, great trainers and juicers, and real artists for their work.
- Inflation: Labor costs are about to go way, way up - November 17, 2021
- Inflation: Is it time for you to raise your prices? - November 1, 2021
- How Wall Street has institutionalized mediocrity - August 3, 2021