As a Catholic store owner, it is your responsibility to be a good steward of your business. This includes making sure that the prices you charge are fair. How do you determine what is fair? I think you can ask yourself a few questions to get that answer.
- Is there an MSRP printed on the item? If there is, you aren’t likely going to get away with charging more. People will notice the markup and won’t appreciate it. This is usually the case with books.
- What do similar items in the non-Catholic market cost? As an example, browsing the Mother’s Day cards at Wal-Mart, it appeared that the standard price for no-frills cards ranged from $3 – $5 with fancy cards costing even more. I DO NOT recommend matching retail store prices for things like cards and jewelry (jewelry is typically marked up 3 and 4 times over cost – how do you think stores survive with constant 60% off sales?) What you can do is look at your card pricing and ask, “If I raise the price on this greeting card to $2.50, which is equivilent to a $3.50 card at a retail store, is the customer still getting a good value?” If you can honestly say yes, then raising the price makes good business sense.
- Is the product I am selling worth what I am charging? Clothing is an easy place to look for items that are rarely worth the price you pay. Are tennis shoes really worth $120? Are “barely there” outfits really worth $70?In the Catholic retail world, are the cheap Chinese statues you pay $15 for and sell for $50 worth it when you can get a much higher quality item from Italy for $10 more? In today’s retail world, the typical answer to the question “What should we charge?” is “What can we convince a customer to pay?” This isn’t the right answer and it surely isn’t a Catholic answer. The Catholic answer is “Does the quality of the product justify the price I charge?”
- Are inefficient business practices requiring me to charge customers more than I would with a properly run business? If this is true, you need to consider what steps you are taking to improve your business processes. If you aren’t actively trying to improve your business, your pricing is unfair to your customers.
In general, I believe that if you are marking up books over the price printed on the cover, charging more than 1.5 x minimum suggested retail pricing, or charging people more than 75 cents for holy cards that cost you 25 cents, you need to take a hard look at your business practices. If you are doing these things and your business isn’t profitable, your business model is broken and no matter what you charge, your business will eventually fail. If your business is profitable and you are doing these things, someone is going to figure out a more efficient way to do business, undercut your sales and put you out of business.