How to Price Your Manual –

Cost/Price Ratio

In addition to “what the market will bear” pricing strategy, I also use another economic model. Because of the value of my information and the effort involved in getting that information to my clients, I look for a 7-1 to a 10-1 return on my costs. If my manual costs $5 to print, I will charge a minimum of $35-$50 and more if the market will bear it.

If my materials cost $23 (as one of my marketing packages does) I would charge a minimum of $161-$230 (I charge $177-$197) and more if I think the market will bear it. In other words, I add my direct costs—printing, binding, shrink wrapping etc—and multiple that amount by 7-10. I don’t know what’s magic about that but it sure seems to be accepted by my marketplace…and it sure provides a fair and decent profit for me.

Finally, I use the “smell” test. If I have priced the material by what the market will bear and profit to cost ratio, I raise or lower the price on what “just feels right.”

Once you reach celebrity or “guru” status in your area of expertise, you can raise your prices even more. I paid $1,000 for a manual written by a man who I considered the #1 expert in a particular area of marketing. I would have been willing to pay even more.

My marketing packages include individual elements that I’m not multiplying cost times 7-10. Two of those elements are books that I paid the publisher $5 for. I can’t add $35-$50 to either the retail or selling price of the package. But I have other elements in the package—like one manual that costs me $5 that I show $119 retail and sell for $97—a 20-1 return!

I’m content with adding costs of all the elements of my packaging and then multiplying cost times 7-10.

I’m in this business for the long haul and a $144 profit against my cost of $23 suits me fine.