By Product Pricing – Treasure From Trash!

Many manufacturing processes, especially in basic industries, produce more than one output. For example, chemical plants often produce a basket of chemicals. This is a result of breaking chemical compounds into smaller molecules. These other products are called byproducts. And by-product pricing strategies can have a significant impact on your profitability.

Two common cases: food waste and recyclable scrap. Food waste can be fed to animals. Many cutting and shaping processes produce scrap. Scrap can often be put back into the machine that created the original roll of material. In the paper industry, we call scrap “broke”. Our broke went back into the paper mill, saving us money on fiber.

Read moreBy Product Pricing – Treasure From Trash!

When To Use Competitor Oriented Pricing

A competitor oriented pricing objective sets prices in response to competitor pricing decisions. This type of pricing strategy is common in hierarchical markets, where there is a good / better / best ranking of potential products. It is also common in highly transparent commodity markets. Both situations require you to carefully manage your risk of losing volume due to price.

Read moreWhen To Use Competitor Oriented Pricing

Turnaround Strategy: Survival Pricing

You may safely assume that if I am in your conference room, I’m not there to hand out the Jack Welch award for business excellence. I specialize in turnaround management. Specifically the commercial parts. This includes managing pricing. Call it survival pricing.

Most of the rest of the articles on the internet don’t do this topic justice. Here’s the real deal.

In a survival situation, every price has purpose. We have few moves, so we use them wisely.

Here’s why I gave you that price….

Read moreTurnaround Strategy: Survival Pricing

When To Use Sales Oriented Pricing

A sales oriented pricing objective uses pricing to facilitate sales and market share growth. The goal is to use pricing as a tool to help drive “smart growth”. Thus, companies using this strategy will discount prices where it is likely to create growth. However, sales oriented doesn’t necessarily mean sales driven: they will likely stand firm on price elsewhere.

While margin improvement is a common pricing goal, there are certain situations where a sales oriented approach makes a lot of sense. We are going to explore a few of these.

Read moreWhen To Use Sales Oriented Pricing

Career Paths: What Does A Pricing Analyst Do?

The role of a pricing analyst varies between companies although there are a couple of fairly common “archetypes” that a job applicant can use to understand what they are getting into. While these are all technically “pricing jobs”, the specific requirements of the role can vary notably and may require a candidate to gain additional experience outside the pricing team.

Read moreCareer Paths: What Does A Pricing Analyst Do?

Laziness & Procrastination: It Isn’t A Fault, It’s a Strategy

We live in an 80 / 20 world. In most major areas of economic life, it is a fact that 80 percent of the value is created by 20 percent of the participants. Most startups fail, a few make billions. Most products fail, a few become block busters. This can be applied within a business all the way down to the order and line line. A few customers, a few orders, a few products… a few opportunities create most of the value.

In fact, this trend is only accelerating as digitization advances. We’re seeing an even more intense form of the 80 / 20 allocation in the form of winner take most markets. Google’s organic search results are a great example of this. We’re going to rank every website that is possibly related to your term and show them in order. First gets 60% of the clicks, next gets about 25%, third place around 10%, bottom of the first page gets 1%. Anything after that is consigned to oblivion. That’s not an 80/20, that is closer to a 64 / 4 or a 51 / 1. A brutal second or third derivative of the 80 / 20 concept.

It’s not just Google. The same dynamic applies on Amazon. Or LinkedIn and Monster.com. Facebook. Tinder and dating sites. Any place in the economy where infinite players can compete for a finite resource. Like Highlander, there can be only 1 (top result).

This doesn’t just affect companies. It affects your career and social partnerships.

Read moreLaziness & Procrastination: It Isn’t A Fault, It’s a Strategy

How to Value A Website with No Revenue

The starting point for most website valuations is a multiple of current revenue, generally set based on recent transactions of similar properties (aka. comps). The most common way to value a website is to price it as a multiple of monthly recent earnings. Most blogs would be priced at 30 – 40 times monthly advertising earnings, unless there are other issues present. But how do you value a website with no revenue?

Read moreHow to Value A Website with No Revenue

How To Turnaround A Failing Business

If you run your own business and it has all been plain sailing, then you are one of the lucky few. Most businesses have their peaks and troughs, and most must fight their way out of a crisis or two. The types of businesses most at risk of experiencing a crisis are the small startup businesses. When you have only a few customers, for example, one large customer failing to pay can put the business at risk.

They say that setbacks are a great learning experience. But that’s small comfort when you are looking at the potential demise of your business. So, here are ten practical tips for any business owner who is struggling with a business in crisis.

Read moreHow To Turnaround A Failing Business