Pricing is rarely just math.
The math matters, but the difficult decisions usually involve tradeoffs.
Examples:
- cost increased, but the item is highly visible,
- margin is weak, but competitors are already lower,
- a department needs more gross profit,
- an item looks profitable until shrink is considered,
- the store has several sizes or brands serving the same need,
- or a price that works mathematically simply feels wrong for the customer.
The Pricing and Margin tools are intended to make the numbers easier to understand so the operator can make a better decision.
They should not pretend that every pricing decision has one automatic answer.
What kind of pricing decision do you find hardest to make? What information would make you more confident before changing the retail?