Cost Plus Pricing Elements
You determine labor costs like a like amount for our break that down burning and we're gonna go through every little step I promise um so technically when we are talking about this is kind of a technical term here any time you hear the word product cost is kind of industry jargon it refers to materials plus labor so that's essentially your cost to manufacture a product so whether that's you making it or someone else making it product cost is our manufacturing cost and that's our materials plus labor so let's let's really just break this down so materials are going to be any expendable goods that go into the making of your product and that includes the packaging so for those of you guys were packaging is essential to your whole sale sale that number needs to be factored in so and the easiest place to put it is in right there in materials because you're not sending out coffee without the bag you're not sending out soap without some I don't know what your packaging is labeled something so...
mething's on there you guys aren't spending years out without packaging has to be there every time, so you're gonna put that right into your price so I also think it's really important when we're talking about materials I want to be up front about this your product is worth way more than the sum of your materials way more so it's easy, particularly in certain industries like jewelry to just assume that, like the value comes from the materials but it is worth way more. You might have heard about another pricing formula. Please don't write this one down materials, times three or materials times four might be something you've heard of. He thought cost plus pricing was leaving money on the table. This is what this would look like on I like way I rounded up like I actually this is probably actually if we're being really honest, this would be like materials times eight because I actually material times for told tale I don't want to feel that closeness that that price that's terrible. So those of you who are thinking materials, times, anything, strap that one, we're going to get to get rid of that. Yes, so that was that that's cost plus and again our valuable based so way go from forty two retail to eighty five wholesale that's why I love about you based pricing, it wins every time. All right, so what I want you guys to do is break down your material costs in whatever way makes sense for your product, so sometimes, like, if you guys were doing something manufactured, I would ask your manufacturer to pull out materials and labour do they do that for you? Perfect. Okay, so you want to put that out so you know what your material costs are for? So for some of you might just be cost per item, you know, you might have to do cost per inch or cost per foot. That's what? Ideo I work with wire, so I sit down, I figure out, you know, this link takes twelve inches of wire. None of them take twelve inches. What? No, I said that takes, like, five inches of wire. This is what my wire cost me per inch. We do that math. Um, some of you might be cost per ounce or pound, I think probably. And soap that's I don't know exactly how you're factoring your materials. Make a bar of eight, um, individual soap pieces particle. It will be for the barbie. Perfect. So you know exactly how much you're costs are to go into that bar and bring it down from there. Perfect. So, yeah, just, you know, for stationery, you're probably doing cost per sheet of paper. Um, so make sure that you're kind of factoring all of those in that was how I broke this down, so we've got, you know, wire per inch leather cord, that's my materials total pretty straightforward but there's a couple other little things that you want to think about in materials and the first one is potential fluctuations in material cost. So my jam activity smiling because I know that jewelers just like the copper I got this was from a reclaimed like hardware story does like five cent reitman so is the chain and write like this is definitely like a perceived value peace versus the materials absolutely and that's what I find more and more is that it is about that perceived value for a lot of people materials tend to be low and and honestly anytime materials or low that's fantastic opportunity for wholesale because it really means that you could have some great margins and I know that that doesn't take that long for you to make either but it's all about that perceived value, but so you do want to think about potential fluctuations in material costs, so this is really it comes to play a lot in like the jewelry industry. So there was a year where silver went in in twelve months silver went from twenty one dollars announced toe like forty dollars an ounce, it doubled. It was like a july two july it was crazy and so many people you weren't thinking about that now you probably can't anticipate for double though the idea is that in value based pricing, it's goingto kind of takes him that on the wash but if you know that your material is gonna fluctuate a little bit don't round don't go to the bottom goto you know a little bit higher up where it's normally going to be you know, shayla, if you know that your sourcing your coffee beans, you're going to get the fluctuations in the coffee market or you know different seasons are going to affect the price you want to make sure that you're kind of accounting for that when you're doing your materials cost again you're you might not be able to account for like a really terrible weather season where coffee just spikes like crazy then you might actually literally have to raise your prices but you don't wantto go kind of bottom barrel in terms of where the cost is figure out where it kind of and that fluctuates to yeah so that's one thing then you want to take into account the true cost of thrift id or found materials because I know that there are people who work with things that they get for free but free is never free. So first of all, if they're thrift id or found are you putting time into finding them? I don't care technically if you put that time into materials or labor but you got to put it somewhere, so if you're taking time to find materials you need to account for that you also have to think about save someone gives you like someone gave you that bag of chain and it was awesome but if you wanted to do it again and you had to buy it what's that price then because part of wholesale is that we're repeating things over and over again so even if you got it free once if you can't get a free forever we want a factor in that cost so were you make sure you're getting all that into your materials so materials is pretty straightforward so I want you guys to go ahead I know for some of you in studio audience this might be harder than others but make note of that one product what are your material costs? Get those down there on paper now we're going to talk about that second piece which is where things get I think a little more troublesome labor some of you guys it's really straightforward you're going soft manufactured the labor is the labor um for others of us who are making things never gets little fuzzier so labour is going to be the cost to produce your product. It might be your cost as in your time it might be an employee and I be an independent contractor or it might be a manufacturer so the most simple way that we're going to calculate labor is production excuse me production time times hourly rate so how long it takes us to make the peace is our production time um hourly rate then is how much you're paying yourself an hour or how much you're billing an hour for labor so that's gonna be our first kind of question is how much do you need to make an hour to support yourself and I know for you guys were manufacturing this number goes out the window so we're just gonna talk to our maker group for a minute how much do you need to make an hour to support yourself and are you paying yourself a living wage so I just want to see where people are at so you guys can share online right now if we're doing this what are you gonna pay yourself in our so we're gonna we're gonna skip our manufacturing people unless you wanna shayla are you well I'm curious about that because I still do like the farmer's markets and I'm doing a lot of grassroot ethan that takes all day entire yeah so we're on our way right so we're gonna talk about though like retail the costs the cost of your labor in terms of retail marketing because ideally that's going to get paid for in that mark up between wholesale and retail okay you mean the roasting that she'll literally every roast if you're doing the roasting and that's labor that first how much you're paying yourself an hour for that I'm not I don't really know you're okay so how do you like what you me making it our to do that should I consider how much I want to charge first? No, those words gonna start here okay eventually yes we'll get back to the value peace but for now we want maybe thirteen an hour and so our twelve okay and then my follow up question to you on that one is if you had to pay someone else to do it what would they get be expected to be paid poverty ten eleven okay, we're in it we're going to want to look around first then we're gonna come back to all these I just, um I think our price points of probably about the same they're so like I would so you hate yourself for the actual making time all we're talking about right now is making yeah, so takes an hour to make eight bars. Okay, how much do you wanna get paid in that hour? How much do I want? Teo, um I would think fifteen twenty five something in there. Okay, I'm a terrible loss right now during my calculating yesterday I realized I wasn't paying myself however I'd love to pay myself eighty two hundred dollars an hour I love it I live in california, so I actually like have to pay myself seventy five dollars an hour this is a safe space I'm going teo so I have I've delegated out about ninety of the production of our garments and I pay the girls that they all work in house and one gets paid about twelve and one gets paid about nine and then I actually did the math unlike cohesively in a week what I'm able to pay myself versus what got time and I'm paying myself like eight dollars an hour right now all right yeah wait so I'm glad that you brought us about people that work from you because this is a really important thing when you're doing costs when you figured out what you paid them did you add into and I don't know how you're paying them but if they're actual employees did you add in not just their hourly rate but their hourly rate plus taxes that you're paying uh not really okay, so maybe yeah yeah so so that's important so if you're if you're dealing with an employee in this labor peace, you need to not just account for what you're paying them per hour so you won't actually figure out what they cost you an hour. So with my employees I believe ballpark like what I pay her plus taxes I believe she costs me like somewhere between twenty and twenty five dollars an hour so that's the number that you want not what you're paying them what they cost you because if you hired employees and they're actually an employee you have to pay taxes so we want to make sure that we're factoring that into so if you're thinking about hiring people it's not just their hourly rate but let's get back to your hourly rate for a second so one of the things that we have to look at is what I call billable hours versus non billable hours so if we were a law firm are billable hours are any time that we deal with clients we had to build them if you're a maker your billable hours are any time you're making product but we have to account for our non billable hours uh which our marketing outreach you know, store research packing up those orders all that other stuff that doesn't go into our making time so typically what I tell people is a good ballpark is if you have you could probably figure about half your thymus billable hours half your time is non billable hours which means whatever you want to make an hour in terms of labor double it so within a forty hour week you want to make one hundred dollars an hour then when you calculate labor costs in your piece you're actually calculated at two hundred dollars an hour okay okay, I know those so these numbers aaron sounds scary to some of you but it's really important that you sit down and you think about what you actually need to make to make a living I love the tiffany said I live in california it's extensive, I have to charge this when I calculate mine, I d'oh um I calculate labor at sixty dollars an hour now I live in the middle of nowhere in pennsylvania it's pretty dirt cheap so I can get away with that. Um, now what that means is that as I mentioned, I haven't employees who does production her rate is about twenty five dollars an hour, so that means I've got an extra profit margin in there before you know when sorry that totally on our own when she's making the stuff, I still have a little bit extra profit margin in the labor, but it's important to set your labor rates for you because sometimes so I got to make stuff if I sit down and make that product, I want to make sure that I don't mind making it. I don't want to be like, I don't think that necklace today like I gotta do this thing, and I'm only making a dollars an hour and that's terrible. So we want to make sure that we're kind of getting that, so I know we asked the online audience to share, so what are they kind of saying in terms of of what they're paying themselves an hour uh it's not much weight twenty five years I was there but twenty seems to be the fridge in the middle somebody said because the state of washington is just putting the minimum wage of fifteen dollars that's what they're paying themselves all right, so what I want to do is I want to get everyone up above that minimum wage kind of mindset so for those of you who are like, I really don't know I want everyone should just run this right now at sixty dollars an hour unless you know you want to be above it then go above like, if you want to be a two hundred dollars an hour, be a two hundred dollars now or we're gonna do this math cause I love it, I love it, but for those of you aren't sure I want youto I want you just play right now we're gonna play it's not scary we're not committing to anything. We're just gonna play at sixty dollars an hour actually makes this calculation really easy because it's a dollar a minute and so that makes labor costs really easy. So in your soaps it takes you an hour to make eight bars, so what is that? So we've got fifteen thankyou so fifty minutes bar how much are you, how much you charging it labor for bar right now yeah, I really don't think we're charging anything right out ok s so what? So so I want to play without your price if you had to add if sixties just seems unfathomable to you right now, you could go with thirty so it's fifty cents fifty cents a minute so that means that you at least have to add seven fifty teach bar for labor everyone says make sense everyone production time use a little I don't know how what I factor that in for something where we don't manufacture so you are literally is going to take when they send you the bill for labor you're gonna add that in so when you when you send products out to get manufactured, they send you back a batch you get you get a cost, what do they give you? So we actually go on by all the material and send it to them, okay see other material and then they charge us per unit a dollar amount, okay, so that's that's your labor cost for you so I don't wait, teo, I don't no, because in your case god, you're going to get paid out of the profit goes, is that the one exception? No, I'm glad you asked, I definitely clarify that so that is the one exception to adding in labor is if you're getting something manufactured from start to finish then you wouldn't have that in now if you guys are getting it back but then still have to put packaging on that radio, then you want to add that into your labor so then you would want to figure out what's your hourly rate for packaging so then your labor cost is actually gonna be two parts it's going to be the cost from your manufacturer per unit plus however long it takes you to package it times your hourly rate and mail it still that yeah, I don't typically like I would say packaging to get it in a state to go retail, okay, here's what I was and then you know, if you know that you're typically sending out so much in it and you can you want to add to that a long time you can in front it's a nice little safety net ultimately, at the end of the day, we're ball parking a lot of this because the specifics get a little less critical once we go into that value based pricing. So these numbers don't have to be perfect that's why we're going to sit here and we was gonna have to play with them a little bit, you know, test test, what happens if you put your labor and there even a thirty dollars an hour see how that makes your price um, so actually, someone pick on you, lauren so what do you selling yourself for? A bar. So for right now, seven dollars. Okay. Wholesale or retail? Um, retail. Okay, so that means that your wholesale price is gonna be three fifty and we know it takes yu. What yu say fifteen minutes to make and what's your material cost three dollars. Okay, so that's not good. No, we're going to get that out there. So in your case, we probably are looking at are three dollars of materials plus fifteen minutes of labor times I'll give. I'll give you I'll give you thirty dollars an hour. We'll say s o you got r fifty cents times are fifteen see riding seven fifty I don't know I had to do that math I did earlier in my head, so we're adding seven fifty so now you're at ten city per bar wholesale? Yes. Okay, so everyone, that incense everybody. So your product you're gonna do that. Any questions online about that labor peace? I want to make sure that we're kind of clarifying this for everybody, not right now, but I'm sure we'll be some current. Seriously, we dive right into this so, lauren, can I clarify so I mean, that really ups your wholesale price considerably it's just that terrify you that seems to be some of the people in the pricing themselves out yes so I promise you we are absolutely going to tackle that question because I know that really where the fear comes into pricing is not crunching the numbers it's getting numbers that feel way out of your league right so it's okay we're going to deal with all of that I promise so what I want you to do for now is just give me the benefit of the doubt we're going to run these numbers and then we're going to figure out how these numbers work in the real world because chances are what feels scary to you there's customers out there that that number is not scary to them at all and so that's part of our job is to find those customers so you've got your material costs you've got your labor now we're going to talk about overhead because overhead tends to be the piece that most makers miss and this one does require a little bit of math and so we're gonna break it down but I promise you honestly once we get into value priced this math goes away but we're going to do it for now so on page ten of your workbook there's something on the side called hourly burn calculator so what happens is any time that you have your product we've added in our materials in our labor but we have to add in all the other expenses of running our business you know, the cost for your studio space you know, if you're a jeweller you're buyin tanks of gas for your torch you know, whatever it is that you're buying, you know, your marketing materials, all that stuff we need to cover in our you know, in our wholesale price because otherwise you're out making you not making any money you know, in business, so the problem is that if you make products that are a range of prices, you can't just really add enough a flat number it doesn't really quite work that way because if you've got for me for example, I have a pair of earrings that wholesale for twenty dollars, then I have a necklace that whole sails for three hundred dollars doesn't sound right, so I know how this whole sales for three hundred dollars, so I really can't add the same amount of overhead into both of those because one takes me longer to make just it would make the pricing seem kind of funny. So what I like to do is come up with a number that I call the hourly burn what that is is the cost per hour to run my business so that factors in all of the other expenses so here's how we're going to do this and I want you guys to ballpark it eventually you're gonna have to go back and actually pull your expenses look at what it costs to run your business, but for now, maybe we're just going to make some estimates. So how much is a cost for any reasons per month or per year? I tend to what I like to dio is take what it cost her my business per year and divide by twelve, because not every month is the same. I think you guys probably all experience that some months you feel like all you're doing is writing cheques and giving people money, and then other months it's not so bad. So what I like to do is take my annual expenses and divide by twelve, but we have to take a couple things out of our annual expenses because we've already covered them, so you're going to take your material costs out of those annual expenses. This is our number, and this is what this is what's happening in our magic little box on page ten uh, so we're gonna take our material because we've already covered them. We'll take out our labor because we've already covered it, and then we're going to take out any retail specific costs because remember, we're calculating wholesale price, so if you're paying booth fees for that farmer's market or booth fees for retail, craft show or you know, like your fees toe at sea we're going to take those out because those are those are coming out of your retail half of your price, but what we are going to add in are any estimated expenses so let's just say that, you know, in the next year that you want to do a trade show and it's gonna cost you five grand, I want you to toss that in there because we don't plan for it we're never gonna have the money to do it so that's going to give us a number by subtracted my material costs that I subtracted my labour, which is what I pay my employees plus the taxes uh, you got any retail shows, and for me my business is not really stable, so I don't have to add in any future trade shows, but you might now we're going to take that number and we're going to divide it by twelve that's going to get us to our monthly number, then we're going to divide that monthly number by our monthly production ours because that is again our billable hours comes back to that idea. So what that means is that till I don't this math, I took my expenses divided by twelve divided by let's just say you might decide that it's twenty hours a week of production time so eighty hours a month to buy that that's gonna get me my overhead cost which is oh sorry my hourly burn which is forty five dollars then I'm going to take that times how long it took me to make a peace and that's my overhead so if this necklace takes me twelve minutes to make am I the cost or my business is forty five dollars I'm gonna add in nine dollars an overhead that makes sense it's a pain in the butt I'm not gonna lie to you this is actually why I love value based pricing because I get to ignore all of this and I know I'm still making money but it's really important for me to explain this to you eh because people always ask me how to do it and b because if you want to be really truthful you should at least run these numbers once or twice so yeah god mom how are you getting the nine dollars for the forty five hourly burn rate down didn't nine dollars so I'm taking that's before the hourly burn times how long it takes me to make this particular he's so takes me twelve minutes to make the necklace so you're going to be a little bit different because you're not putting in the labor time but you guys also have one product that costs one price so what you khun dio is take your monthly expenses and divide that by the number of units you're selling in a month your math is way easier because your price is the same. Shayla could do the same right now because your price is the same. And because you guys are dealing with manufacturing, that makes it a little bit different. So you can just take however much your expenses are per month and divide by the number of units we want. Nelson. Okay. Yes, lindsay, this include things like web hosting for your website running your studio like electric. Yeah, it meant, yes, all of that goes in there. And even though your website might also be a retail website, I would toss it into this because your whole set pull. So people are gonna find you from your website, see one in there? Yeah. And if you are working from home, I would still recommend running these calculations because somebody's got to pay the electric bill somebody's got to pay the rent or the mortgage. So just because you're working from home and you're quoting for getting it for free, it's not free someone's still paying those bills, everybody. So I would absolutely calculate those in because that's the only thing that's going to tell you if you're truly making money and it's also going to be the only thing that tells you, um like if you needed to move out to say a new studio space, if you're not accounting for that at home, you're never gonna have the money to move out, do it in a new studio space. So you want to put those numbers and so that you're really thinking about it. So I know that this starts to get a little complicated, and if you're ready, go ahead. Shayla okay, is there a sepa organization where this particular cb specializes in retail inventory? Because I'm noticing that all cps to help us get this financial world together? Obviously, bays are not the same. And so how do you find somebody that knows your industry? That's a c p a that can help you? Yeah, you're gonna probably have to do a little bit of googling and asking around in that one. And it's, probably one of those were technically what you're actually looking for is a cfo and not a c p a. So because the epa is probably going tio tell you like the big picture, but the cfo is the one who's going to break down the numbers. That's, your chief financial officer was probably in a position where we're bringing a cfo into your business, but if you know someone, who's had that role of cfo. The very least you're gonna look for a c p a who deals with business and corporations like the sepia thatjust handles your family taxes if there's no corporations involved that they're not going to be the one for you, they're not gonna be the one that helps but it's helpful to run these numbers for yourself so that you know and you know part of it then starts to come out in the wash so if you've sold in the last month, if you sold what you feel like is a good production number of units and you haven't made any money, then you know there's something wrong, right? So so we can work backwards from that too. So if you're kind of scared of crunching all of those overhead numbers, you don't have to break it down so much to the per piece, but I want you to be really honest about, at the very least user my sales this month, these are my expenses. Did I make any money? Because ultimately you're gonna have months where you don't but the general trend of your year should be that you do, like I can tell you I lose money in february in september every year it's just the pattern of my business, I know I'm not going to sweat that, but the general trend of my year is I'd better be making money or else something's not working questions from online some people bit hung up now on exactly how to price they're really confused on they probably are which is fair enough but this this particular state right? So yeah, it was absolutely okay what I want you to do just for right now so we're all on the same page as I want you to take that products that we're working with and it's going to be materials so whatever the cost of your materials are plus your labour plus your overhead and I want to know with that number and this is actually going to a share of those three numbers up I want to know if that number is more than what you're currently charging is your wholesale price? I have a question from annie shirt and I'm going to see in the anti make sure thing you know, you never seem anything s o she's confused, saying value value pricing seems to me like you really need tohave raving fans who absolutely loved your work and she's saying getting those fans and having them onboard is what's taking her the time and while she's working to get those fans, how do you price your goods so that's a fantastic question so here is the real secret to value based pricing you only need one raving fan for your product do you know that reading fan is you so anne you are going to be the raving fan for your product and that's where value based pricing really comes in you're not the raving fan for how your product is made you're the reading fan for I'm assuming since we're assuming you're making shirts wearing your shirts rocking your shorts you think your shorts are awesome you're the raving fan you were going to price where you want to end up goes back to the conversation we're having with shayla at the beginning of the segment where pricing lower isn't going to get you where you want to go you need a price where you need to be so we're gonna deal with the final price because truthfully right now none of you have a final price for your pieces we've actually wiped the slate clean none of you have a final price so all you should have right now is a number that's materials plus labor plus overhead then I want you to tell me the number higher than your current wholesale price because if it is then we've got some work to do so how are people in the audience we know laura and I know yours is higher I can clearly see that I losing money got like so we know your prices have to go up they have to go up good good yeah e I think there's room for your prices teo and us yeah okay, what about you guys did? Oh, ok, yeah so everybody has got it off online be thinking the same thing back porch soap is asking they've always been told at least that the theory is that marketing does not come into any of your overheads. Why do you think it should be included? So I think that it at least needs to be not sure why they would think that it doesn't teo come up with a really great answer. Several people are saying, typically the cost of running a business is not include marketing, and this seems to be something people, equities it's one of those miss may and I think here's where the confusion comes in, so if you are are doing your marketing specifically to the retail customer, whether it's, you know, buying facebook ads to promote your website, or whether it's doing a retail craft show those numbers you are correct are not going to go into the overhead that goes into your wholesale price. But for me, the biggest marketing expense actually marketing is, quite frankly, the biggest expense in my business because I do trade shows, I would estimate I'm going to say this number and it's going to scare you, but it doesn't have to be this high I would estimate that I spend usually at least twenty grand a year doing trade shows if I didn't put that into my overhead, I would be screwed like there's no way around that, so I think part of the reason that people don't put marketing in is because they view marketing as something that doesn't cost a lot, but marketing can cost a lot. It can often sometimes cost more than your time so it's really important that any marketing that you're doing directly to ah wholesale customer needs to into that overhead, because otherwise you're not making money I need I need to account for that one grand on pain and trade shows because it's a big chunk that's a lot of checks I write every month to pay those booth fees until the bloom is asking what if you're a slow maker, especially the first time you're making the design? How does that impact here? That's a fantastic question. So the first time that you make a design, you cannot run these numbers because it's not going to give you the true cost. So what I recommend is that, um, you know, you design a new product, and then you're gonna have to make a batch, so you're going to sit down, you're going to make a batch, and you are going to figure out how long it took you to make that batch and divide out from there, so the first time that's that involves designed time it always takes longer so you have to go even if you don't want to make a whole batch turn around make a second one right away the second one is the time you're going to use for your labor cost you have other questions from online think good show I know awesome so I know that you guys have a ton of fears which we're actually gonna get teo in value based pricing so I just want everyone to be on the right the same page which is to complete the product cost price calculations so materials overhead labor but since we have just a couple minutes left I want to turn it back to you guys and make sure that we're all on the same page so do we have questions about those calculations or how we feeling we got some we got some fears whiskey who's scared all right monica let's talk about that for a minute I guess once we start calculating all of these additional costs I'm afraid that our retail price is going to be so high that people aren't going to see value and then we're not going to move product okay so I want to see if there's I think that we're going to be similar but I want to see if there's any other kind of fears in that and if we're getting the same things online people are afraid things aren't going to sell yes, that's the biggest fear seems to be that they'll priced themselves out of out of the market, huh? All right, that they're selling so cheaply because I believe that's what they yes, they can come out. Yes. So we're going to deal with this so much more in the next segment. But I think it's so important that we talk about it for a minute now, just because I don't want you guys to leave and feel so paralysed that you're like, well, don't tire business is gonna fall apart because megan just told me to raise my prices, right? It's not the idea is that your business is actually gonna be better because I just told you to raise your prices. So what happens is that chances are when you raise your prices, you were going to price yourself out of a market a market. But if the market that urine cannot support the price is that you need to charge to have a profitable business, it is not your market and that's what's really important to understand is that if you're losing money, it's, not your market if you're making a million or something and you're making like twelve cents on your wholesale price, it's not your market, so part of our job and this is what we're actually gonna spend a lot of time talking about in these future segments is finding that right market and this is the beauty of selling two stores is that typically the marketplace that stores near the price points that store support the markets that they're serving tend to be a lot higher then the online markets, then the farmers market? Then those retail craft shows where if you're not standing in the rain it's like ninety five degrees and everyone is so hot that they can think about trying stuff on because there gross and sweaty none of those places support particularly high prices and honestly, I can tell you that, you know, I could go to retail show and people look at my prices and they're like seriously, it cost how much and then I go to a trade show and buyers come in and they're like, oh my god, your prices they're so cheap this is such a bargain weii saw my prices are my prices I think for generally people would not say, oh my god, megan's like a steel it's not it's, not high but my bran but when I put it in that position of stores, it feels like a very reasonable price because stores know what they're going to turn around and sell to their customers for it's also important understand that you know the stories that were targeting we're not targeting big box we're not targeting the places that are built on high volume, low profit margin. We're targeting those small to midsize stores that worked really hard to have quality sales staff and build really great reputations with their customers, and so those are the places that can easily sell, eh? Um, you know, a three hundred dollar necklace or a five hundred dollar necklace or a thirty dollar bar of soap, so, yes, you're probably going to price yourself out of some of your markets, but what we're doing is we're stepping into a market place that is ultimately going to serve your business so much better, because we're not then suddenly, like nickel and dime ing, having that will really tiny profit margin, we're dealing with people who understand that what you're actually making our upscale, high and well made, beautiful, amazing, fantastic objects. What, however, that whatever that says to you that's, what that's the people that you're selling to in this new market, they understand that they value it and they pay for it. So, yes, you're gonna price yourself out of the market, but you're gonna move yourself into such a better market, and that's, we're gonna talk about in the next segment is really finding that fantastic market, more questions online or from the audience? Can I just say that I am I went to hotel academy with three years ago, I know and I am sitting here right now because I did not listen to what you were saying the first time, and I put myself in a hole and I really had to learn the hard way and so super valuable information tio take right now, I know you didn't listen because I want I get I watched when you were in tara's adia I know activity, we went over there, so I'm actually starting to terror like making is gonna kill I actually was listening, and I was really mad about that, but I actually I'm so glad you shared that story was afraid, right? I'm so glad you shared that story because it happens with with a lot of you so live you online are going toe be in the same way that tiffany was you're gonna be like, doesn't apply to me. I can't do what I can't do it. Um, but you have teo, you have to just embrace it and here's, the thing your prices are gonna raise before you feel confident about it and that's the order of the order should not be get confident, raise your prices, the order is raise your prices get confident so I can tell you that when I did my first trade show my present haven't changed much over the last six years because actually I was I was priced right needed to me to begin with I had some really great mentors who like just yelled at me about my pricing so I put it out because I don't wanna make them mad and I did my first trade show and people would walk into my booth and maybe like this your wholesale pricing and I was like yeah these are my prices like this is what it iss and and and I sold some stuff I was really lucky but I didn't have that confidence and then I started to give myself this little mantra like okay somebody's bought at that price somebody's bought at that price and so I just started to pretend like they were like of these are prices and was like yes they're my prices like this is what it is I have stores you buy it's fantastic it's not for everybody and then and I didn't feel that way my head my head was like a crab someone isn't by this I'm like we're in trouble right? But you start teo you start to kind of do that mantra and then eventually you know what happens now people walking by both and they don't even question my prices they're like really through this good it's awesome but because I raised them before I was ready that gave me the opportunity to like build the brand around it as opposed to saying, well, I'll raise them when I'm ready because guess what, you're never gonna be ready, it's like that thing they say about having kids, right? Like, if you wait till you're ready to have kids, you'll never have kids, it's probably why I don't have kids, but I but I have high prices because I didn't think I was ready to raise my prices so it's gonna feel scary and it's going to feel pain. Abel um but I want you guys to just just for the band aid off. How much trouble would you have saved yourself, tiffany, if you would just raise them two years ago on then, you know, I finally started, I was still nervous, and I tip road, and then I'm like, oh, people still buy my stuff. Oh, they're still gonna buy my stuff and, you know, I still have room, I think that's a constant evolution, but, my gosh, I mean, these last two years could've been so easy on me and and I would already be doing trade shows and iron, or do we have, like, a budding hotel business? And yeah, I wouldn't have I mean, I wasted two years in my business for sure.