Don't Feel Guilty About The Mark-Up
Just had a conversation with a client this week about markups.
For those who don’t know, a markup is the amount added to the cost price of goods to cover overhead and profit.
My client is an interior designer and will frequently purchase fabrics, tile, lamps, etc. for her clients. I asked her how much of a markup does she charge.
She told me very small amount because she feels guilty to charge.
I did a double take and told her that she should charge as much as the industry allowed.
The markup represents your time and energy in managing the purchase. For example, what if it’s the wrong fabric? Now you’ll have to send it back and make sure you get the right order. Also your supporting staffs now have to take time to keep track of that paperwork, in other words “overhead”. Plus you want to make a profit.
She asked “what if my client complains about the price?” I told her, “you can always lower your price. It’s much harder to raise your price after the fact.”
I’ve managed to get her thinking about this. I’ll be working with her on the guilt aspect of it.
I’d like to hear from you. If you are in a business that charges a markup, do you feel guilty about it and why?