|Over the years questions related to our prices have occasionally come up. We try to keep things simple, but even still, it can be hard to clearly explain all of the details to a customer in a short conversation. We've compiled information on this page that should help. Please ask if you have other questions.Since we started making interior products for aircraft in 2003, we've tried to keep our pricing system as simple and fair as possible. Prices are based on what it costs us to make a product plus a modest profit margin. That last sentence really sums up our pricing method. We go to a considerable amount of effort to accurately determine what it costs us to make something. We measure every piece of material and the time for each task that is required. From this we determine our break even costs. The profit margin is then added, and the results are the prices that customers see.|
Our profit margin is what allows us to replace equipment as needed, design new products, and grow when appropriate. Since the beginning, we haven't taken profit out of the company. It has always been re-invested. The target net profit margin for our products is 15%. However, the actual net profit is usually lower than this (even negative at times) due to a number of variable factors (mostly ups and downs in sales). Also, the target profit margin does not account for taxes.We don't offer "show specials" or other discounts in the traditional sense. Instead we offer our lowest price all the time. This is keeping with the idea of simple and fair pricing. We feel that if a price can be reduced, then it should be reduced all the time.As a side note to this Wikipedia has an interesting article on the theory of Price Discrimination. It is a common practice in retail, and some customers may actually prefer it. For a small business like ours though, we feel that keeping things simple is better for everyone in the long run.Anyone who is purchasing a product would be wise to shop around before making a decision. Some of our products cost more than similar products from other companies, and some cost less. It's not possible to make a direct comparison based on price alone though.When it comes to the types of products that we sell, each company will have a very different approach to how it's products are made, and this will affect the cost. There will be times when a product from another company will be a better fit for a particular customer. Our goal is to make our products in the way that the majority of our customers want them made at the best price possible. We continually look for ways to do that better.We no longer increase prices on a once a year schedule. Under the old yearly price increase system, we needed to estimate the cost increases that would occur before our next price increases and account for them in our current prices. This has become increasingly difficult. We now simply increase our prices directly when our costs increase. This means we don't need to carry an additional buffer in our prices (this is better for the customer). It also means however that prices can change at any time.We have always charged our customers only what the selected shipping company charges us. We do our best to select the least expensive option for our customer. In some cases there are additional factors that lead us to choose a shipper that is not the least expensive, but may be the best option for the specific situation.
|More About the Profit Margin|