Are You Charging Enough for Your Subscription Box?

In this solo episode of the Launch Your Box podcast, host Sarah Williams walks subscription‑box founders through a comprehensive pricing overhaul. She begins with a personal story of hitting a million‑dollar revenue milestone yet ending the year with no cash, illustrating how underpricing and hidden expenses can cripple cash flow. Sarah then outlines a step‑by‑step audit of all per‑box costs—including product, packaging, shipping, transaction fees, software subscriptions, labor, damaged or unsold inventory, and “silent margin killers.” She explains why many founders price from the bottom up and advocates a price‑first approach: set a target price based on market positioning and average order value, then fit product selections within a budget that meets margin goals. She defines concrete gross‑margin targets (45‑60%) and net‑margin targets (15‑30%), and shows how to use these targets to decide whether to cut costs or raise prices. Sarah provides practical levers for improving profitability, such as negotiating vendors, simplifying packaging, and adjusting labor costs, as well as strategies for raising prices—transparent communication, 30‑60‑day notice, grandfathering existing subscribers, and tiered or upgraded box options. Throughout, she emphasizes tracking both gross and net margins, using a free box‑budget worksheet, and treating pricing decisions as a CEO‑level strategic move rather than an emotional reaction. The episode ends with a concise action checklist and a call to download the worksheet to start auditing and adjusting pricing for sustainable growth.
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If you've been working hard on your subscription box, but still feel like the money just isn't adding up, this episode is for you. Today we're digging into pricing, specifically how to know if you're charging enough for your box. We'll talk strategy, hidden costs, profit margin goals, and how to build a box budget that keeps your business profitable month after month. And if you've been thinking about raising your prices, I'll show you how to do it the right way. Without losing your subscribers. This is a conversation every subscription box owner needs. So grab a notebook and let's get started. Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch, and grow your subscription box. Now here's your host, Sarah Williams. Welcome back to the Launch Your Box podcast. Today I've got a good episode for you, especially if you're feeling like you're working hard but you're not seeing any money in your bank account. This episode is for you. Today we're going to take a really serious look at your pricing because if your box isn't priced right, you're not going to hit your profit goals no matter how many subscribers you have. A lot of people think it's just about scaling, but it's about being priced right from the beginning. And this isn't about shaming your numbers today. It's about getting clear, getting real, and getting profitable. That's what's going to make us a healthy, strong, long-lasting business. And when we get into box budgets, I've got a free tool for you to download to make it simple. So stay tuned for that. But let's start with the hard truth, because I see this all the time in Launch Your Box and in conversations just in general with different subscription box owners, even product-based businesses, but you're probably underpricing your box. And it's not your fault, but it's something that we've got to fix. I'm going to take you back to 2020. It's my first million-dollar year with my subscription box, and I was so proud. I hit a million dollars just from one product, one thing, my subscription. And I'm looking at the end of the year and I have no money to show for it. And it really, it really got me depressed. I'm going to say I had made all this money. I had this big milestone in my business, but where was the money? Because it wasn't in my bank account. And here's what I had to realize. And it was all my fault. It was self-reflection. But I kept adding one more thing. One more thing. Oh, let me just add this one more thing. Well, all those one more things kept adding up and taking away from my profit margin. Also, if you remember 2020, prices of things were going up. Shipping prices were getting astronomical. Product pricing was going up because there was a lot of issues getting product on the market, and I hadn't increased my prices. As I was getting charged more, I was absorbing that into my business. And I was losing profit margin all at the same time. And the other fact was my business was growing so fast, so rapidly, I didn't get a handle on my expenses. I wasn't tracking anything. And so it was a big wake-up call after I hit this milestone number in my business about what I needed to do to really get focused and make sure that when I make my next million dollars, I have money to show for it. And here's how underpricing happens, because it happens. And you're probably thinking right now, am I underpriced? But here's what happens. It's an emotional trigger. There's things that you lie to yourself, you say to yourself to make this happen. It could be, I want this to be affordable. I say that to myself all the time. I want it to be affordable. People won't pay more money for this. Oh, I'm just starting out. Oh, I'll raise prices later. You don't. You let it go on and on and on. Or this is just a fun little side hustle. But the expenses are taking your full-time paycheck. You are not your customer, okay? You might be similar to your customer, but you also know the behind-the-scenes costs involved. Your customer isn't thinking about your credit card fees. Or how much the box inserts cost, or if shipping has gone up this month or not. You are. So you have to price this like a business owner and not like a customer. Okay. So when you think about underpricing things, we do this a lot. And I bet a lot of us listening right now are guilty of it. I sure was. Let's just talk about what underpricing really costs you as a business owner. I'm going to just give you like a really simple example. Say you charge $35 a month for your box, okay? And you think you can spend $20 on products. I'm still making $15 a box, I'm still profitable, and if I get 100 subscribers or 200 subscribers, that's where the money's gonna be made. But you forgot about the $3 it costs for the box or the extra $1.50 it costs in shipping materials or the platform fees or the box inserts, the printed inserts, or maybe that tape, the labels, the filler. Oh, let's not forget about the time because you might be packing them right now. You might be customer service right now, but your time costs. And suddenly that $35 box is costing you $28, $29 an order. And this $15 profit you thought you had is actually $6 or sometimes less. And that's actually before we talk about what happens when there's missing packages or what happens when something gets to a customer and it's damaged. Let's talk about the customer support hours you have to put into your business. Oh, what about rent if you're in a building and maybe those utilities and internet and all the things that go along with it? This is why your bank account doesn't reflect your sales. You feel like you're growing, but your cash flow is tighter than ever before. And it's not your box's fault. It's your pricing. That's the problem. And there's consequences of staying underpriced. You're going to continue to have cash flow issues month after month after month after month, no matter if you're small or you're big. If you are not priced right, whether you have 100 subscribers or 1,000 subscribers, You will constantly have cash flow issues month after month. There's no room for error. There's no room for mistakes. There's no room for damaged shipments or a customer doing a chargeback. And you start to become resentful of your business, like, I'm working all this hard-earned time and labor and I'm not even able to pay myself very well. And you start to get resentful and you start to burn out. And then also you hit a point where you're limited to growth because you can't afford help. You can't afford better packaging, more efficient packaging where you don't have to put stickers on everything. It comes printed. You can't afford to run ads because your margin's so thin. And then the worst part of it is that you can't pay yourself, which means you're running a hobby, not a business. And I know you didn't launch your subscription box to break even. You didn't. I know you didn't. Not any person here listening did. You launched it for freedom. You launched it to create income. You launched it because you have a passion or purpose for what you do. And underpricing that is going to steal all of that joy from you. So let's talk about how you know if you're underpriced. Okay, let's just do a little self-checklist here. Um, number 1, you're covering shipping costs out of your margin. So if you don't have the full price of your shipping built into your cost, um, or they're not paying the full price of your shipping, you're covering out of your margin. So say your box is $35 and you're charging $5 for shipping, you know it costs more than $5 to ship that, so you're eating the rest of that. In your margin. Number 2, you're constantly using personal funds to cover business expenses. That trip to market that you want to take, that should be a business expense, but your business can't afford to send you. So you take that out of your personal funds. Those shipping labels you need next month, your business bank account is empty, so you have to pay for them out of your personal funds. If you're constantly using your personal funds to cover business expenses, You're underpriced. If you're hesitant to hire or spend money on marketing, you're underpriced. Number 4, you can't clearly say what your profit margin is per box. If you're sitting here right now and you're saying, Sarah, I think I'm at 40%, I think I'm at 50%, but you don't actually know, you're probably not as high as you think you are. So if you're sitting there listening or watching and you're shaking your head to more than one of these, it's time to rework your pricing. And it's okay because we're going to walk through it step by step. So let's take some action. Let's audit your current price versus the total real cost per box. I want you to write down everything, not just the products, but how much tape are you using per shipment? How much is the box? How much is the tissue paper? How much is the inserts? How much is your time? If you were to give yourself an hourly rate, what would that be? And then I want you to calculate your actual cost per box. Don't guess, don't estimate. Pull your product and packaging invoices from your most recent shipment and get real numbers. Don't just throw a dart at the, at the board and think, oh, it probably cost me about this much. We can't fix pricing if we don't know the real numbers. Okay. So let's get into that pricing strategy because this is where a lot of subscription box owners go wrong. They price from the bottom up, so they'll pick products and then they'll price their box. Okay, this should be around X number of dollars because I've spent this. But I want you to flip that thinking completely. We're going to start with the price, not the products. And so we're gonna start with the pricing and then we're gonna fit the contents of that box to the pricing because you're pricing the experience of your brand, the value that comes from your subscriber, and the margin that you need to run a profitable long-term business. The box changes every month, so your product costs are going to change every month, but your pricing shouldn't. So the structure should be stable. You get to decide what your box needs to cost, and then you curate a box that fits that budget. Okay, so let's get real. Let's start with your average order value. If you're selling products, whether that's the box or other products, you have data that you can rely on. So what is your current AOV, your average order value? Look at the last 90 days. Is it $37? Is it $47? Is it $57? Mine right now is about $64 average order value. That's on average what somebody spends with me when they come shop with me. So that's a good indication of where I can price my box because I know customers already spend that with me. Okay. And then I want you to look at what are your actual expenses that we just talked about— products, packaging, shipping fees, fulfillment. All right. What is your current margin? Now, if your AOV is different than where you've priced your box at, is your AOV higher? Could you be pushing this number up? We need to look at where your margin is and then we can do— we can pull one of two levers in our business. We can increase the price. We can cut our costs. And so those are the levers that we have to push and pull when it comes to our subscription box business. Now, this is non-negotiable and this has increased the more knowledge I have had. I used to say 30% profit margin was minimum. It's no longer sustainable. We need a 45% profit margin out of the gate minimum. And our ideal goal is for us to get at 60 plus. I've been working with a fractional CFO this year, and this is something that she's made very clear to me. My 45% and 50% profit margin wasn't leaving me much room and that's where I was in my cash flow crunch. And so she has pushed me to get to 60%. Now I haven't increased my pricing, but I have really worked hard to bring my costs down. And so now that's my first lever. Now if I need to keep it and I'm struggling, I can— the other lever is increasing my pricing for my box. Okay, so here's an example. Say you charge $50 a box. 45% profit margin means that you cannot spend more than $27.50 with your, with your gross. Okay? 60% profit margin means that you can't spend more than $20. So if I'm spending, say, $27 right now, my profit margin is 45%. What can I do to reduce that $7 per box cost. That's what I started to dig into. So that, that $20 to $27 includes my products, it includes shipping if you have that included in your price. I do not. It includes the merchant or transaction fees, your box, your inserts, your fulfillment and labor, and anything extra you add to that box like a surprise and delight. Okay, so that's what has to come in those profit margins. So when we think of the out-the-door price, it's products, shipping if that's included, transaction fees for, for credit card payments, box packaging and inserts, fulfillment and labor. Okay. So if you're spending $35 to sell a $45 box, you have a 22% margin before you run an ad, before you pay the rent, before you hire help. You're not just underpriced, but you're in danger of serious burnout and a cash flow crunch that's going to probably collapse your business. So let's talk about that pricing backwards strategic approach that we have here. So you pick a price point based on your market and your audience. Don't start with picking the products. Start with the price point. Okay. Does your box feel like boutique or luxury or value-driven? What are similar boxes charging successfully in your niche? Where does your box belong in the market? I say you don't want to be the cheapest in the market and you don't want to be the most expensive in the market. So where do you align in the market for your box? And then you set your margin goal first. I want at least 50% margin. So we'll use that to calculate the max total. So if I'm looking at my industry and I think, okay, middle of the road on my industry is, say, $50, I know my AOV is $64, I think I could probably successfully charge $60 for my subscription box at 50% margin. I can't spend more than $30. Okay, so that's where I got my gross, my gross margin. Now, if I can only spend $30 per box, that's where the work comes in for me. I have to source according to that budget. A lot of times we want to go pick the products first and then decide on a price, and we realize we've spent too much, our price is going to be too high, or our margins are going to be really thin. I work with wholesale accounts, I work with, um, different vendors at market, I work with manufacturers. I have to take whatever I'm doing to fit into that budget and build in a cushion for anything, any other cost that might creep in. So this kind of flips the pressure. You're not trying to fit a price to your products. You're trying to build a business based on predictable profit. And that's where the freedom comes in. So you have to watch out for some kind of warning signs. If I price it this way, can I still profit if I run a sale or a promo? Can I cover shipping if that's included, or add a bonus gift without erasing my margin? If the answer is no to either of those, it's too tight. So let's reverse engineer your box price with real data. What's your AOV? Write it down. What's your AOV today? What's your actual cost per box with everything— product, packaging, fulfillment? What's the real profit margin right now? And what price would you need to charge to hit the 50 to 60% profit margin? Does that mean that you need to set a new pricing tier? You need to set new pricing. Does that mean you need to cut budgets on what you're currently spending? Use that number to help guide your curation, not the other way around. And for me, it didn't just happen overnight. When, when I was working with my CFO to, to really dial into this, I was like, oh, let's cut back on that. Oh, let's add a sweatshirt instead of a hoodie because there's a $2 difference and I need that to get to my 60% margin. Oh, let's add less pockets to a bag because that's going to save me $0.90 if I put one less pocket on a bag. Do you see how it started to affect my decision-making? Because I knew what those numbers were and I knew where I needed to be, and I knew that our goal was 60% profit margin, and I didn't want to raise my prices yet. So I started to cut my spending and it's been working beautifully. And I actually had one month in the last 90 days where I had a 67% profit margin, and that makes me feel great. And I'm knowing I'm going to be over— like, I'm going to have a lower profit margin coming up because of some of the products. I'm buffering it with the months around it so it doesn't kill my overall profit margin. Before we move on, we need to stop and talk about some of those kind of hidden costs I call them the silent margin killers, those leaks in our bucket that are hiding in our numbers and they're eating away at our profit. And this is some of the things that we don't even realize. Okay, so let's talk about credit card and transaction fees. Have you actually looked to see what you're being charged per transaction? I'm talking about Stripe, Shopify, PayPal. They typically charge 2 or 3%. Plus a per transaction fee. So if you've got a $45 box, it's usually $1.50 to $2 an order, and you multiply that by 100 boxes or 200 boxes and you've got hundreds of dollars gone that you didn't even realize. Shipping materials— and I'm not talking about postage, I'm talking about the box, I'm talking about that tissue paper, crinkle paper, inserts, branded stickers or tape. Thank you cards, coupons, all of that adds up. And so I'm a big proponent on the simpler the better. Do I need tissue paper? I see it in a lot of the boxes that I open. Sometimes it's not necessary. It might be nice, it might look pretty, but is that necessary? I don't think so. Do you need crinkle paper to sprinkle a little color on your box? No. Inserts are important. Stickers are important. Tape, boxes, those are important. What's not important in your package that you can eliminate? And if you add up the box, the tissue paper, the inserts, the stickers, the tape, the coupons, the cards, where are we at with packaging materials that we've not even factored into our profit margin? Let's talk about all the software that we have to have to run our business. What are you paying for on your email platform like Klaviyo, your website Shopify or Woo, Canvas, ShipStation? The list can go on. There's a cost of doing business, and that's not just about the products and the packaging. And we have to build in strong margins to cover all these costs. We need the email, we need the website, we need Canva and ShipStation. So if we have such a small margin, there's not room to pay for all these things. And then there's labor. And I was guilty of this like most of you. I didn't ever charge my labor. If you're doing everything yourself, your time isn't free. Okay, what would it cost for someone else to pack boxes, answer emails, create graphics, social posts, schedule emails? You might not pay yourself now, but your pricing needs to support the ability to hire help or pay you when the time comes, because this is where a lot of business owners get into a trap of I can't hire anyone because I've been working for free. I haven't counted my labor into the cost. So if that's where you're at right now, we've got a profit margin issue, we've got a pricing issue. And then there's the other thing that we don't expect. Damages, overordering inventory. Did you order 100 items each but you only sold 75 boxes? Now you got 25 of everything laying on the shelf. That's where your cash flow is, laying on the shelf. Did you accidentally ship 3 subscribers the wrong size t-shirt? Now you have to replace those. Did you get 5 boxes that got damaged in shipping and those need to be reshipped? You may get paid by the postage handler, you may not. But the reality checks is that these costs of damage, unsold, extra inventory, it adds up. And that's where your cash flow is. So your margin needs to have a cushion for that. It's not just a black and white math equation like your profit margin has to allow for these things. And then there's all the fun things we like to add. This was me. Add one more thing, that cute sticker or bonus, that insert, that gift for an anniversary of a longtime subscriber, that influencer box you ship for free. All of that comes out of your margin. Even if it feels small, it adds up. If it costs you a dollar a box to add something to surprise and delight and you have 300 subscribers, that's $300 you didn't budget for. That's $300 coming out of your business account. That's $300 you can't pay yourself. That's $300 you don't have for the rent. So I need you to do a hidden cost audit. I need you to look at all the business expenses. Pull— if, if you're like me, I put everything on a credit card for the business. Pull that credit card statement, look at the cost. How much are you paying in rent? How much are you paying in utilities? How much is that Wi-Fi costing you? What are your subscriptions for software? Your margin doesn't just protect your business, but it protects your mental health. Because when unexpected costs hit and you don't have the margin to absorb them, you're going to be stressed. You're going to be overwhelmed and you're going to be like, why am I doing this? Why am I doing this? So let's talk about profit margin goals because I want them to make sense to you. And we've got gross margin and net margin. And so I want to talk about that and what it means so that you can understand the difference between what looks good on paper and what's actually going into your bank account. Okay, so gross margin is what's left after you fulfill the box. So that's going to include your product, your packaging, your shipping, your fees, your inserts, your fulfillment labor. This is where we set our goals with our gross margin. That's the 45 to 60%. What is my gross margin look like? Okay, so that's what we need to figure out first. Now the net margin, and this is what we don't think about as business owners. And this is where I need you to kind of put your business owner hat on, that CEO hat I keep trying to get you to step into. But your net margin is what's left after you run the entire business. It includes everything in gross margin, plus those software subscriptions I was talking about, your marketing, whether that's ads, giveaways, influencers, your contractors or employees. Oh, if you got a physical location, you probably have to have business insurance, accounting and tax prep. Your salary's in there too. And so your net margin, you should be looking for 20 to 30%. Okay. Once you've passed kind of those early stages, it's probably going to be a little smaller in the beginning. But once you get past your first couple of years, your goal should be 20 to 30% net margins. That means you're keeping 20 to 30 cents for every dollar you earn after everything is paid, including yourself. And that might be a little high. That might be a little unrealistic. I'm going to say maybe 15 to 20% as I'm thinking about this. There are a lot of costs into running a business, but 15 to 20% feels great after you've paid yourself. OK. You might think you're profitable right now because say you're charging $45, the box costs you $20, and that's $25 left, right? That feels good. I'm making $25 profit on a $45 product. But then you subtract all these net expenses like your software and your, your VA that you hired and the giveaway box you sent to an influencer and that $500 you spent on a Facebook ad. Oh, and then there's your time, not even to list that yet. You might have rent if you're not in your home. You might have utilities. You might have insurance. And that's where the real trap is, that your gross margin might look fine, but if your net margin is 3%, that's why your bank account feels tight. So we need to track both margins. This is where bookkeeping software is helpful, or you can even use a simple spreadsheet, but Start pricing for profit. Sometimes we get wrapped up in these revenue goals— a million dollars in revenue— but that didn't mean anything to me because my margin and my profit wasn't solid. I want you to start looking at your business with profit goals. What can I do this month to bring my profit up 5%? And then every pricing decision works off of that 45 to 60% goal. And then your business, you plan it around that margin. And if your net is too low, we got to audit our overhead costs. If you've got a solid 55% gross profit, but you've got a 5% net profit, what is taking all your money? Is it the overhead of your business? Is it the fulfillment and sourcing? Is it the labor? And if that's the case and you can't change that, then we have to increase our price. There's no— we can't keep operating at a 5% net margin. That's why your cash flow is so tight. Margin equals freedom. Margin equals marketing. Margin equals a paycheck. And without margin, you're busy, but you're broke, and you're stressed, and you're overwhelmed, and you're asking yourself daily, why am I killing myself to make no money? Maybe you're thinking about your numbers right now. And realizing your current price isn't cutting it. First, I don't want you to panic, but second, I don't want you to feel guilty because you're not failing. We're evolving, and raising your prices is the right way, and it might be the smartest move you make all year. So let's talk about raising our prices. Okay. If your gross margin is under 45%, we need to raise our prices. If your net profit is 5% or lower, or sometimes negative, we need to raise our prices. If you hesitate to run a promo or do any marketing because you can't afford it, it's time to raise your prices. If you've added more value to your box over time but you've never increased the price, it's time. If you can't afford help, if you can't afford that plugin or that app you need to run your business, or maybe you're not even paying yourself Your current price isn't sustainable and your, your price should support your business, not suffocate it. And we get so attached to this emotion about pricing that we're not even realizing what we're doing to ourselves. Most box owners know they need to raise prices, but they're afraid subscribers are going to cancel, right? That's why you don't do it. I don't want to lose my subscribers. You're going to lose your business. Like, that's the harsh reality to this. If you don't raise your prices, you're going to lose your business. So are you more afraid of losing your subscribers or losing your business? Let's talk about how to raise those prices. I feel like I'm getting my, my ranty pants on in this episode, but I'm so passionate about it because I was there. I was sitting on the phone crying because I wasn't sure how I was going to pay payroll in a week, and I needed my boxes payments to ship through, to push through before I could even buy the product for the next box. I was there, and I didn't know it in that moment that that was the reason I was there, because I didn't have enough profit margin. I didn't know. I'm just over here running a business that's outgrowing me by the minute. But I've learned, and I'm here to help you. You're not alone in this. Let's talk about how we can raise prices. One, you got to be transparent. Share your why. Transparency wins everything. Shipping increase, product increase, upgraded packaging. There's rising costs all over the place. Share it. Let them know that you've absorbed costs as long as possible, but need to adjust to continue to provide that great experience. My t-shirt vendor, let me know that they're raising prices this month. They've absorbed the tariffs as long as possible and now they're adjusting. I'm not going to stop buying shirts. I need them. I want them. People appreciate honesty. They don't want you to run— go out of business. They want their box to continue. You got to give them a little notice if you're going to increase their price. You need to give them at least 30 days notice, preferably like 45. Remind them multiple times. I'm talking email, socials, text, an insert inside the box. Include the effective date and what the price change is going to be. Example would be like, starting October 1st, the price of your box is going to change from $39 to $44. An example, Netflix. I used to be on Netflix when it was like $9.99. I think I've gone through like 2 or 3 pricing adjustments. It went to $11.99, it went to $14.99. I think I'm on $19.99 right now. I paid it. I want Netflix. Did they lose some customers? Yes, because there will always be negative Nellies. Amazon Prime, I think it's gone from $99 to $129 to $149. I pay it. I want Amazon Prime. It's the cost of doing business. As their costs incur and go up, they have to update their prices. Same with you. The other thing, if you, if you want to grandfather in current subscribers, this is what I do. So I let— I've had 2 price increases my 8 years of having my subscription, and I let my existing subscribers just lock in their price. I know that I have a lower price, like lower profit margin on my earlier customers, but it's my way to reward loyalty. And then everyone new, and eventually it all churns out, right? Eventually it all will wash out. Um, but I let them lock in their price. That makes them feel special, and I can get a higher profit margin from my newer customers. Um, and I really like that. Another option is consider a tiered option. Keep your main box the price it is. You can cut costs. You can also offer a mini version, or you can offer an upgraded version. This is what I've done with my combo box and my ultimate box, but I'm creating higher profit margins in the higher value subscriptions. And what happened was when I created that first upgrade, a lot of my existing customers upgraded. And so it had the new price, it had the new profit margin. And that was one way that I could take hundreds of subscribers and shift them into the new profit margin that I was working on. It lets your price-sensitive customers stay, but it also helps you increase your profit margins in other areas. So you've got to choose. Do I want to cut costs or do I want to increase prices? Or maybe it's a little bit of both, but you've got to choose your price based on your margin goals, not your feelings. Take the emotion, take the fear out of it. Set a date 30 to 60 days out to get it increased and start communicating. Maybe that's, we're going to increase prices, get in now. That's a marketing tactic. Or, hey everyone, I have to increase the box $4. Decide if you're going to grandfather them in or just roll out a new price. I don't want you to look at raising your prices as a setback, but it's a time for you to evolve and becoming the real CEO for your business. You're building a business that you want to last, one that supports you, one that delivers value to your subscribers every month. And so I want you to really look at this as a benefit and not something you have to do. This is something you're going to do to build your business stronger. Let's look back at this journey that we went on today. Number 1, underpricing is costing you more than you think. Cheap doesn't build sustainable businesses, period. Number 2, pricing strategy starts with your average order value and your margin goals. Set the price first then fit the products into the budget. Number 3, those hidden costs will sneak up on you every time if you don't track them. I want you to put them on a spreadsheet. Packaging, software, labor, transaction fees, it all adds up. Number 4, profit margin goals are non-negotiable. If you want a long-term, long-lasting business, you've got to aim for a 45 to 60% gross margin, and you have to continually try to get it higher. So right now I'm trying to get from 35 to 45. Work on that first. Don't worry about 60. And then when you get to 45, work on getting to 50. Okay. Number 5, raising your prices isn't a failure. It's leadership. It's business. We just have to communicate clearly, add some perceived value, and protect the business that you built. Now, here's your next step. I don't want you to just think about your numbers, write them down. I have a box budget worksheet that makes this really easy. This is going to help you with your gross margin. You'll plug in your costs, your price, it'll show you your gross margin, your gross profit, and exactly what, how much room you have to work with. So this tool will give you clarity, and we've got it in the show notes today, so you can grab that, download it, for free. Don't wait until renewal, the next renewal, or when your shipping bill hits. Do this now so that you can start to take action on it. You didn't start your subscription box to just break even. You started it to create something meaningful, not only for yourself, but for your subscribers. And the only way that you can keep doing that and keep growing and keep serving is by making sure your price supports your profit. You deserve to run a business that pays you back. Your subscribers deserve a box that's going to last for years, not one that burns you out and goes away. So grab the worksheet, run your numbers, and make the changes you need, because profitable businesses change lives. I'll see you next time.
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