The first customer
How to price a product or service
Add direct cost, your share of fixed costs, taxes and fees, and the margin you want. Then compare with the market. A wrong price sinks even big sellers.
bairogonzalez.com team, drawing on Bairo's story · Published
Pricing isn't copying the competitor or guessing "what the customer will pay." It's knowing how much it costs to deliver, how much you need to earn and how much the customer accepts paying, and finding a price that respects all three. A price that's too low is one of the quietest ways to go under: the business sells, the schedule fills up, and the money disappears.
The practical path
- Calculate the direct cost per unit. Everything that goes into each product or job: raw materials, packaging, shipping, commission, the working hours of whoever does it.
- Add up the month's fixed costs. Rent, accountant, internet, software, the owner's draw, fixed salaries. Divide by the quantity you realistically sell per month: that's the share of fixed cost each unit has to carry.
- Include taxes and fees. The tax of your regime (the MEI's DAS is a fixed amount; under Simples Nacional, there's a rate on revenue), card machine fees, delivery app or marketplace fees. Many people forget, and the margin evaporates.
- Set the profit margin. Profit isn't what happens to be left over; it's part of the price. It pays for growth, surprises and your future.
- Use the markup calculation as a starting point. A common formula: price = direct cost ÷ (1 − % variable expenses − % fixed costs − % desired profit). Sebrae has free pricing spreadsheets and calculators.
- Compare with the market, afterward. If your price came out much higher, see where to cut costs or how to show value. If it came out much lower, ask yourself why others charge more. Sometimes you're forgetting a cost.
- Test and review. Review the price when costs change and at least every six months. A price increase announced in advance and explained is usually well received.
A warning sign: if you sell a lot and the money is never left over, redo the math before selling more. Selling more at the wrong price only increases the loss.
Pricing a service has an extra detail: your hour. Work out how much you need to earn per month, divide by the hours you can actually bill (not the hours you work) and use that value as your base.
How Bairo went through it
Bairo Leandro Gonzalez Martinez says he had to put a price on things the market didn't yet know how to value. The hair-treatment course he created came before the field had found its place; today it is called trichology. Later, his natural-based cosmetics brand was born at a time when few people were betting on them.
Whoever sells something new has no price list to copy. The answer, in his story, was the same as always: test close to the customer, adjust and don't stop at the first answer. The brand worked.
The Method step
Pricing is part of step 5 of the Seventh Attempt Method: count in lifetime. Include in the price the hours of your life each sale consumes. If, to make the month's numbers work, you need to work more hours than exist, the price is wrong, not you.
Discover the Seventh Attempt Method