One of my favorite things to sell when I owned a brick-and-mortar business was sunglasses.
I found a supplier in South Carolina with an incredible selection of motorcycle riding lenses. At the time, I owned a motorcycle apparel and accessories store.
It was 2007.
The timing was great…
Until it wasn’t.
Hello, 2008.
Fortunately, I had already spent years working at Sunglass Hut.
Polarized.
Non-polarized.
Lens materials.
UV protection.
Frame construction.
I knew sunglasses inside and out.
That knowledge turned out to be one of the most valuable assets in my business.
Product Knowledge Creates Profit
The sunglasses I sold were marked up between 300% and 500%.
Yes.
Five hundred percent.
Whenever someone tells me they’re thinking about opening a retail business, one of the first questions I ask is:
“What’s your planned markup?”
When I hear something like 40%…
I cringe.
Understanding Your Profit Margins Matters
Let’s do some simple math.
You buy a product for $10.
You sell it for $14.
Congratulations.
You made $4.
Now pay for:
- Rent
- Utilities
- Payroll
- Insurance
- Credit card processing fees
- Inventory shrinkage
- Marketing
- And every unexpected expense your business throws at you.
That four dollars disappears quickly.
Revenue isn’t profit.
Sales don’t automatically mean a healthy business.
Understanding your profit margins before you open your doors is one of the most important parts of building a sustainable business.
Why Pricing Strategy Is More Than Math
The reason I could confidently charge higher prices wasn’t because I was lucky.
It was because I understood the product.
When someone picked up a pair of sunglasses, I could explain exactly why those lenses were worth the price.
I wasn’t selling sunglasses.
I was selling expertise.
That’s what product knowledge does.
It builds trust.
Trust makes pricing easier.
And strong pricing protects your business.
Learn the Business Before You Launch It
Before you sign a lease…
Before you order inventory…
Before you post your grand opening Reel…
Learn how the business actually makes money.
Understand:
- Profit margins
- Cost of goods sold
- Operating expenses
- Pricing strategy
- Customer value
Too many people fall in love with the idea of owning a business.
Very few spend enough time understanding how that business actually generates profit.
That homework is the business.
Build a Business, Not Just a Dream
Owning a business isn’t about looking like an entrepreneur.
It’s about building something financially sustainable.
Your product knowledge matters.
Your pricing matters.
Your margins matter.
Because at the end of the day…
A business doesn’t survive on excitement.
It survives on understanding how it makes money.
Frequently Asked Questions
Not necessarily. A successful pricing strategy depends on your industry, operating costs, customer expectations, and the value you provide. Higher markups only work when customers understand and are willing to pay for that value.
Product knowledge helps you explain why your product is worth the price. Customers are more likely to buy when they understand the value they’re receiving, making pricing conversations much easier.
Revenue is the total amount of money your business brings in from sales. Profit is what remains after paying expenses such as rent, payroll, inventory, marketing, and operating costs.
Before launching a business, understand your profit margins, pricing strategy, cost of goods sold, operating expenses, and how your business generates sustainable profit.
Thinking about starting a business or wondering why your marketing isn’t translating into revenue?
Book a free Marketing Audit with MoVO. We’ll help you identify what’s driving growth, what’s holding you back, and where your biggest opportunities really are.
Deuces,