Re: [CR]Situation Desperate--Frame prices and demand

Example: Production Builders:Peugeot

Date: Wed, 25 Feb 2004 10:09:08 -0500
Subject: Re: [CR]Situation Desperate--Frame prices and demand writes:
> If you have more work than you can possibly handle, that, by definition, means that your prices are too low.

I disagree. The basic assumption is that you have efficient output and that you are working at a sustained and consistent efficiency. In other words, if you were able to build 10 frames per month, but now your efficiency has dropped to 5 frames per month, that doesn't necessarily mean you should raise prices just because you can't keep up with your workload. On the other hand, if you are still building frames at 10 per month and you have orders that would sustain 20 per month, you have to determine whether the reason you have those orders is because of your lower price compared to the competition. Raising prices may drop demand. If you can raise prices without dropping demand, you are certainly in a good position. How to do that is a difficult business decision. Lou Deeter, Orlando FL