Mastering the Art of Pricing for Your Restoration Business
In the world of auto restoration, determining the right price for your goods and services is both an art and a science. As someone who expertly restores vintage vehicles, I charge based on the time invested and the materials used to bring these pieces of history back to life. At my workshop, not only do I offer top-notch restoration services, but I also supply parts and accessories to both my loyal customers and new visitors alike.
My acquisition of supplies and parts predominantly stems from industry-specific catalogs where products are clearly marked with list prices. My predecessor—a seasoned professional in this business and my father—adopted a pricing strategy that set our selling price at approximately 1.25 times our cost. This approach historically worked well; it enabled us to maintain reasonable pricing for our clients while generating sufficient revenue to keep our inventory robust and operations thriving.
However, in recent years, the market landscape has shifted dramatically. List prices have escalated to exorbitant levels, presenting a dilemma in terms of fairness towards our customers. Despite advice suggesting adherence to these inflated list prices, I find myself at odds with this notion.
For instance, consider a case where I procure a specific type of caulk at $22 per tube; my current selling price is $30, although the list price now has soared to $46. Similarly, a particular paint that I purchase for $212 a gallon is being sold by me at $290, compared to its staggering list price of $456.
These examples underscore a pressing need for a practical pricing framework. While my goal is not to amass wealth, it is crucial to sustain the business and foster satisfied clientele. The challenge lies in developing a reliable pricing formula adaptable to the diverse range of items I retail.
In search of insights, maneuvering through the price-setting process requires balancing competitiveness, fairness, and profitability. It’s about forging a pricing strategy that aligns with both ethical values and business viability. In my journey, finding this equilibrium remains pivotal to thriving in the niche yet dynamic space of classic car restoration.
