We all know that manufacturing costs change rapidly these days, everything from raw materials to equipment, utilities and shipping. That’s where a company’s own fixed prices can easily get them into a bind.
In Production Machining Magazine, business expert, Mitch Gooze, shares some specific ideas that can help fabricators and manufacturers avoid getting trapped in a too-low, fixed-price quandary.
Here’s one example:
A common practice that is more visible these days than in the past is bundling versus unbundling. The simplest example is the airline industry. In the “old” days, you bought a ticket for a price and everything was included: luggage, food, a seat, and so on. Today, depending on the airline you choose, the fare is for the ticket only. Luggage (even a carry on in the case of one airline), food and preferred seating is extra. The airlines have unbundled their pricing to achieve higher prices. This has occurred because their customers focus on the price of the ticket to make their buying decision, not the total cost of travel.
You can read his complete article here
