Have you ever found yourself chatting with friends about how ridiculous profit margins for some products are? I have heard it said that a pair of Nike shoes costs only $5 to manufacture (it’s actually ~$30), after which all those present lift their noses condescendingly at the “greed” of the corporation. It’s no wonder that we have such negative thoughts about money and making a profit on our sales! These perceptions seep into our subconscious, which then sabotages us with guilt when presenting our product’s price. Today I intend on dispelling this myth, and free your conscious to earn a healthy profit. Note: we do not support price gouging in any way, shape, or form!
Profit Rewards Contribution
Money is a measure we use to quantify the value of our contribution to society. Evidently, we earn more money by serving more people! Provided that you give greater value than what you charge, you have earned and deserve every dollar of profit you have made!
Profit Allows Greater Contributions
Assuming your ultimate goal is to make a difference in the lives of your clients, the more profit you make, the more people you can serve. Earning in excess of your costs allows you to hire staff, develop better products, and support other businesses.
In turn, if you earn in excess of your personal financial needs, you can then afford to give more charitably. In the words of the late great Jim Rohn, we should “Earn more than you need, so you can help those in need.”
Profit Encourages Accountability
The profit equation is simple: Income – Expenses = Profit. If you can command a high price while being wise with your expenses, you will be rewarded with more profit. These measures help us to sell on value rather than price, and to minimise waste. That said, be careful not to sacrifice your business’ longevity for short term profits by cutting down on your product’s quality!
How Much Should I Charge?
This is a complicated question and deserves an article (or two!) on its own. There are numerous considerations, but if I were to share just one guiding principle, it would be to charge what is fair. Questions that will guide you on this include:
“How much are my competitors charging?”
“Will my product bring about greater value than what I charge?”
“How much do I need to meet my own business/personal goals?”
Money is a measure of our contribution to society. Profit fuels more of it, and encourages accountability. Charge what is fair, that meets your clients’ goals and yours. In the words of John Wesley, go forth and “Make all you can, Save all you can, and Give all you can!
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Success Partners is led by Ben Lai. Our vision is to inspire entrepreneurs and salespeople to sell with pride. We achieve this through training and coaching, enabling them to contribute meaningfully and profitably to society.