In this episode, I go through 7 reasons why "Cover Your Costs" is the worst pricing advice EVER. It's one of the most common responses to questions in business groups/forums when it comes to pricing.
The people who share this advice are well-intentioned, but aren't pricing experts. There are many potential dangers to cost-plus pricing that especially apply to smaller businesses.
This video/podcast came about from a blog post I wrote by the same title, which you can read here: https://www.courtneydeagon.com/articles/7-reasons-why-cover-your-costs-is-the-worst-pricing-advice
If you'd like more resources on why cost plus pricing is fallible, check out these resources:
1. Why Profit Doesn't Matter (podcast)
https://artofvalue.com/why-profit-does-not-matter/
2. Why Cash Does Matter (podcast)
https://artofvalue.com/why-cash-does-matter/
3. Cost Plus Conundrum (how cost plus pricing loses you money - 3 minute video)
https://www.youtube.com/watch?index=2&list=PLkDIy0CN_ftIATD1HyYiKe7rgN_5O9RUn&v=kr6hTW9zgHU
4. Cost Plus Death Spiral (how cost plus pricing can kill your business - 2 minute video)
https://www.youtube.com/watch?index=3&list=PLkDIy0CN_ftIATD1HyYiKe7rgN_5O9RUn&v=7RoNLbQhG_8
5. Why Cost-Plus is a flawed concept (podcast)
https://www.thesoulofenterprise.com/tsoe/simmons