Queen of the South You know what I'm saying? Like, when I be doing these interviews They always ask me what's my hobbies outside of rap Ten on bitches hey ladies it's chanel from the boss besties today i am making a video on how to price for profit so for those of you that are fairly new to the hair game or just starting out and you don't know how to price your bundle You don't know what kind of profit you want to make. You don't know any of those terms. You don't even know what I just said.
This is a video for you. I'm going to be explaining how to price your bundles to actually make profit or price your wigs or hair so that you can actually see a profit in. your business I have my notes y'all just so you know I'm gonna be going through my notes I have everything planned out of what I want to say just in case I don't forget nothing cuz I have to be talking a little fast so first first thing that you're gonna want to know before you even start literally before you start anything is know your target audience you need to know who it is that you're gonna be selling to knowing your target audience is going to help you in a lot of ways because it'll help you with your marketing it'll help you with your content and it'll also help you with your pricing pricing if your target audience is college or maybe high school girls you don't think that they'd be able to afford a $700 wig you know what I'm saying so you want to be able to price your bundles at a price that you know your target audience can afford or will be willing to pay so you definitely want to keep that in mind that's why it's very important to understand who it is that you're selling to before you even start the sale because if you don't know who you're selling to you're not going to be selling much what you're also going to want to do after you find out your target audience and do some competitive research so you're gonna want to scope out your competition and see exactly how much they're pricing their bundles at or their wigs or their frontals or their closures if they have somewhat of the same type of audience as what you're looking for then you'll want to take a look at maybe three three to five different hair companies that are also selling to the same audience as you or a similar audience um that as you and see what kind of pricing that they're putting on their bundles because that'll let you know what your audience is willing to pay.
So if you have a competitor that's pricing a 20 inch bone straight wig for $300 and you see someone else that's pricing it 20 inch for $375, you know what I'm saying? So you're seeing that it's somewhere in that price range of where your audience is willing to pay and that's what they want to spend their money on. Another thing that also goes into your price... is your vendor. If you have a vendor that's charging you $250 for a 20-inch wig and you're trying to sell it for $300, do you want to make $50 off of that or do you want to make more?
And that's your profit, but we'll talk about that in a minute. You'll want to see how much you are actually paying for the product versus how much you're going to be selling it for. So if the vendor that you're wanting to go with, their price is a little too high and it's not allowing you to make as much profit as you want. then you might want to look for a vendor that's a little cheaper.
Not saying you'll get someone that's less quality, but someone that might be selling it for a little bit less. So you'll want to do a lot of research in the very beginning of trying to price your bundles. Okay, so make sure you understand those three things before you even do anything. Now, let's get into some... Definitions.
I was trying to say something else but I couldn't figure out the word. So, definitions. Your gross profit is what you actually bring home. Just like on your paycheck.
If you look at your paycheck you see I made $1,000. okay I work 40 hours I made a thousand dollars let's just say but that's your gross but you know before you even get to what you're taking home you got to take out taxes and they got to take out medicare and they got to take out social security and they got to take out insurance They got all that stuff. So by the time they get rid of all of that stuff, let's say you take home $800. So that is your net profit. Okay?
So you want to make sure you know the difference between your gross and your net. I hope that makes sense to y'all. Gross profit, net profit.
Net is what's actually going to be coming back to you in your bank account. That's what you're going to see as your paycheck. Okay?
That makes sense. So another term that you're going to want to be familiar with is margin. okay now margin i'm gonna read it i'm gonna read the definition profit from a product or service after all expenses have been covered often referred to as a percentage now don't get confused don't get like overwhelmed with these words and these terms you know If you're a big business, people using these terms, it's okay. You're going to be a big business one day too, so you're going to need to know these terms.
So let me teach them to you and you need to be able to understand what they mean and what they are because if you're trying to get, say you're trying to get a loan from somebody. or you're trying to build your business credit, or you're trying to get, you know, grants or whatever, and they're asking you these things, what's your profit margin? What's your gross net, your gross profit, your net profit? And you don't know how to answer these questions. You know, do you think they're going to try to give you any money?
No. So you got to be able to know what these terms means. And now that we're familiar with those terms, we got to go ahead and get into actually pricing and how we can get to that pricing strategy or pricing model or pricing method that you want to use. So first off, the first one that you usually see is the cost plus pricing model.
So basically, that's the cost times the markup times equals the price. Okay. so candy dandy board you bought your bundle for $30 okay and you're gonna times it by however much do you want you know if you want to times it by two so you can make double your your money or you can make your profit you know double your profit then you can do it by two and that equals 60 obviously it's very easy simple math that's the easiest way that you can you know price bundles you can do it in this way you can do i want to times it by two or i want to times it by three you know i'm saying if you want to do that then you'll be pricing your bundle at 90 dollars But you have to make sure that it makes sense to you and to your business.
So don't just be throwing out numbers out there just because, okay, I want to do this. No. Remember what you're looking at. You need to look at your target audience, what they're paying.
You need to look at your competitors. research and you need to make sure your vendor has pricing that is conducive to the price that you're wanting to charge okay so just make sure it makes sense for you but this will be the first type of model as far as pricing Okay, that's really simple very easy. I hate a dirty whiteboard.
So I got that fantastic Spray that thing down Okay, so then second what you can do is if you have a fixed pricing that you want to make off of each bundle so for the first one If you're times in your your cost by two each time then you're making double of what you pay each time so if the 12 inch is $30 and the 14 inch is $35 you're still using the same model to get your price right it's 70 35 times 2 is 70 so I think let's just say it is for today 35 times 2 equals 70 so you're just keeping the times 2 times 2 times 2 all the way down so you're going to be making double every every bundle okay then Let's say you want to make a fixed profit off of each one. Instead of doubling $30 and $35 and $40 and $45, you're going to be making, let's say you want to make $30 off of every single bundle that you make or for certain lengths. You're going to make a column or you can use an Excel sheet or if you have a notebook or whatever.
Put it in here so you understand what you're doing. You put in cost, how much you paid. Cost how much you paid to get this bundle then you're gonna put in your profit How much are you gonna be making off of each bundle and then you're gonna put in I'm gonna say retail because that'll be your retail price for what you're selling it for.
So let's say $30 for the 12 inch 35 for the 14 inch 14 16 will do 40 for the 16 inch right and then We'll just go up by fives because that's typically how you see it. But, you know, sometimes it'll vary. We'll go up by $8.
We'll go up by $7 or whatever. So. Let's just say that you want to make $30 off of each bundle.
So 30, 30, 30. And then let's say once you get to the longer lengths, you want to make a little bit more. So you'll do 40. Okay, so this will be your profit. This is how much you're wanting to make off of this $30 bundle.
You're going to add on a price of $30 to this bundle and your price is going to be 60. And then your price is going to be 65. And then your price is going to be 70. So. Then you get to the higher ones and you're wanting to add $40 as your profit. Then it's going to be $85.
Then it's going to be $90. Okay? So you can do a fixed profit.
profit to where you're making a certain amount off of each bundle if you want to do it that way and then as you get to the longer lengths obviously the longer lengths cost more so you'll want to make more of a profit off of it okay i hope i'm making sense y'all i'm really getting into it trying to help y'all become boss besties what's up y'all here or what okay so the other model is the market you y'all i forgot this one hold on market oriented pricing otherwise known as competitive pricing so this is basically you're not really doing too much math as far as what we just did you're not really doing that what you're doing is taking a look at your competitors and seeing exactly what their pricing is and you're going to be either strategically pricing it a little higher or strategically pricing it a little bit lower so if they're charging $100 for their for their wigs you can charge significantly less not significantly but you know strategically a little less so let's say you're going to charge yours for 85 okay because you know that it's same quality same target audience same all that but you know that you're going to be going off as a steal you're going to be looking at you're going to be looked at as a bargain or um a discounted you know wig not saying that the quality is any less but you know that's how your market it to your target audience you know i'm saying the bargain option not less quality you don't think i'm saying that it's going to be less quality but that's how you're going to market it um or you can do it strategically higher and say this is a luxury brand or this is you know um what's another word lavish it's a lavish brand it's a lavish brand and you'll price it a little bit higher so instead of doing a hundred dollars you're going to do 115 and you'll do 125 so you'll be a luxury brand and you're going to have to to really market it in that way so you'll understand that your target audience is paying somewhere around this $100 price but you're going to either do a little bit higher or a little bit lower depending on how you're going to market to that audience so you have to understand your audience and understand what they are willing to pay okay I don't really like that model too much but I mean People do it all the time. People do it all the time. So it works for people.
Now what I want to talk about also is doing bundle deals. So there's different ways to do bundle deals. There's different ways to do pricing. There's different ways to do everything in the world.
So what you can do is take either a fixed amount off of you know each bundle or you can take a fixed amount off of the price so i got my handy dandy board i'm gonna go ahead and show you again so we did um What was, okay, the 12 inch was $30, the 14 was $35, and the 16 was $40, okay? So, two different ways, I'm going to write it two times. Two different ways that you can do this.
What you can do is take an exact price off of each bundle. So say you're going to take $10 off of each one. Right?
30, 25, 20. It's a shame, do I gotta get my calculator? No, 50. 20 and 30 is 50, plus 25 is 75. So, in total, yeah I do need my calculator y'all, hold on. 105 was the original price that you would be selling this for but if you're doing a bundle deal and you're taking $10 off then let me just let me just check my math Okay, $75.
I was right. I knew that. I don't even know why I was down myself.
Okay, $75. This will be the price. This will be your bundle deal price.
$10 off. So you're taking off $30 total off of that order. So you're going to be charging...
and i'm 75 so a lot of people do that a lot of places do that not just hair you know you buy more you save more so if you buy one bundle you're gonna pay a flat thirty dollars but if you buy three dollars or three bundles then you know you'll pay less for each bundle you know You know what I'm saying? So you're paying $30 less. If we divide 75 by three, then you'll be paying $25 for each bundle. Okay?
So that's how you'll let the customer know that this is a deal. They're getting $30 off. That's the deal. Okay?
So if we come down to this example down here, this is the first type of bundle deal that you can do. The second kind is just taking a fixed price off of the actual total. So say...
what did we say was 105 dollars so let's say you want to have them say 40 just on every bundle deal whatever the total price is you're taking 40 off of every every total so minus 40 what it is 65 y'all i'm sorry i gotta check because i just got a chair i just i just have to okay now obviously this is a different deal just depending on how much you are able to profit and how much you're buying your bundles for will determine which model you can use or how much you want to take off of your pricing because you still want to make sure that you're making a profit and that you're able to you know pay all your bills with your profit you don't want to make a little bit of profit five dollar profit and you're not really you know i'm saying making any money off of that okay so the last thing that i want to talk about As far as profit goes is not with pricing but actually profiting after you've made the sale. So we talked about how to price for profit, how to price your bundles to make sure that you are receiving some sort of profit from it. Now we'll talk about how to interpret your profit after you've already made your sale and you've gone through whatever to get your customers.
Okay, let's just say you had a sale and somebody bought a wig. for $500 both $500 right we know after watching the beginning of this video that this is not your profit $500 is not gonna be your profit from this okay you gotta make sure we take out our taxes and our insurance and our health care all the other stuff okay so this is your gross I would write it right there but I feel like it's gross okay then Let's give some examples of what business owners, as far as hair goes, has to pay and take off of after each order. So you bought the wig for $150, okay? Then you had to get the wig shipped to you.
Okay, it was $20 for your vendor to ship the wig to you. Then you have to ship it to the customer. Let's say $10 for shipping, okay?
and you're going to put in there your packaging. Okay? Packaging.
Now, how you can determine how much you're taking off for your packaging determines how much you paid for your packaging. So, if you paid $100 for 50 bags, then you know, obviously, it's $2 per bag. So, you're going to want to take out that price for each bag that you're using for each order.
So, I'm going to say you're going to take out $2. Okay? now let's there's there might be some more stuff that you want to take out some states have taxes I live in Florida and they don't have a state tax but some states have state taxes that you'll want to take out or you know different things that you're paying for your website stuff like that you want to in factor into you know your actual price pricing and how to take a profit off so we started at 500 we're gonna take off 150 for the price of the way we're gonna take off $20 for shipping it to us we're gonna take off $10 for shipping it to the customer and then we're gonna take off two more dollars for the packaging okay so now the total is 318 this right here is your profit $318 is what you profited off of this so you bought the wig for five you I'm sorry, you bought the wig for $150, you shipped it from the vendor for $20, shipped it to the customer for $10, took out $2 for the packaging, and here we are at $318. This is how much you're going to take home and deposit into your bank account, okay? Okay, so make sure that you understand that you do have these things that need to come out for each order.
So don't say, my God, I just made $500. You didn't make $500. You sold a product and you brought in, I mean, well, yeah, you did make $500. You made $500, but you're taking home 318 of them $500, okay? So don't think that because you made that, that's what you're taking home.
So you want to be able to understand that, and I don't know how else to reiterate that to you. That is very important, okay? when it comes to pricing products or pricing services. Services is a little bit different because obviously that's something you'll have to incorporate your time and labor and things like that into pricing.
This is just for products but um let me know was this helpful to you? I hope I answered a whole bunch of questions and I hope that you guys will be able to you know start further on your journey of becoming a hair boss. I have an e-book called Price for Profit that I wrote that is going to be available. That's going to be available for purchase if you go to www.thetacewasbessies.com. If you write, go ahead and type that into your search bar and you can find the Price for Profit e-book.
And it'll go through pretty much everything that I just told you here today. It'll have worksheets and it'll go into a little bit more detail. I have some apps. I have an app in there that'll help you as far as pricing goes as well so you don't have to try to calculate everything on your own just type your numbers and it'll get you you know the information that you're looking for so if you need any other um information just let me know drop some comments down so I know that I did a good job and um yeah thanks guys thank you for watching bye