Small business owners often wrestle with how much they should charge for their products or services. For those that run product-based businesses, there are more intricate factors at play, including the business’ costs of materials. These not only include the material type (e.g. plastic, wood, metals), but can also include intangible factors, like the material’s or whether it’s plentiful or scarce. Sometimes these choices are determined exclusively by economic necessity. At other times, ethical considerations, like patriotism and the environment, come into play. Whatever the motivations may be, you and your customers need to be comfortable with your costs.
As Hawaiian Gun Rack president and Big Kahuna Dennis Kahn explains, his retail price points can fluctuate based on the costs of raw materials in the market, most notably wood and bamboo. Dennis creates hand crafted, environmentally sustainable surfboard racks from wood that he imports from overseas, and manufactures his products in the U.S. Bamboo, says Dennis, tends to be more expensive, but is also more ecologically sustainable. For him, setting a fair retail price is about finding a sweet spot between creating an environmentally-friendly, American-made product that is also cost-effective for him in the long-run.