Lecture Notes: How to Price for Profit in the Hair Business

Introduction

• Speaker: Chanel from Boss Besties
• Topic: Pricing hair products for profit
• Target Audience: Newcomers to the hair game, understanding pricing strategies for bundles, wigs, etc.

Key Concepts

Understanding Your Target Audience

• Know who you are selling to.
• Influences marketing, content, and pricing.
• Example: College/high school girls may not afford a $700 wig.

Competitive Research

• Scope out competition.
• Observe pricing from 3-5 similar companies.
• Understand audience's willingness to pay.

Vendor Considerations

• Consider vendor pricing.
• Balance cost with desired profit.
• Research vendors for better pricing if necessary.

Important Definitions

Gross Profit vs. Net Profit

• Gross Profit: Total revenue before deductions.
• Net Profit: Revenue after taxes, expenses.

Margin

• Profit after covering expenses, usually a percentage.

Pricing Strategies

Cost Plus Pricing

• Formula: Cost x Markup = Price
• Example: Buying a bundle for $30, selling for $60 (markup x2).

Fixed Profit Model

• Set fixed profit per bundle.
• Example: Add fixed amount ($30) to each bundle cost.

Market-Oriented (Competitive) Pricing

• Price based on competitors.
• Price higher for luxury branding, lower for bargain appeal.

Bundle Deals

• Fixed Amount Off: Discount per bundle.
• Fixed Price Off Total: Discount off total price.

Post-Sale Profit Interpretation

Profit Analysis

• Calculate profit after all expenses.
• Example:
  • Selling price: $500
  • Costs: $150 (wig), $20 (vendor shipping), $10 (customer shipping), $2 (packaging)
  • Net Profit: $318

Tips and Additional Resources

• Consider all costs before determining profit.
• Services pricing differs: includes time, labor.
• Resource: E-book, "Price for Profit" available on Boss Besties website.

Conclusion

• Understanding these concepts enables better business decisions.
• Further guidance available through the e-book and the provided app for calculations.

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End of Notes