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Prices are on the rise! Yes, I know, it's not the most exciting topic in the world, but bear with me, it is definitely on everyone’s minds.

There are a number of businesses that co-exist in virtually every vertical supply chain, dividing up margins, and taking a guess as to the balance of how much they can get away with charging before losing customers, vs how much margin they can absorb. This happens at each stage of the chain, and often with some lag time in between.

It can be a difficult and stressful equation to perfect.

Shipping, raw materials, labour - you name it, the price has gone up. And while some businesses are struggling with absorbing costs, others have enough goodwill to pass on costs instantaneously.

Then there is a small portion of businesses who find creative ways to pass those costs on to their customers. And by "creative," I mean "sneaky."

Take, for example, the coffee shop I visited the other day. I ordered my usual long black and wasn’t shocked to see that the price had gone up by a dollar. When I asked the barista rhetorically “why”? she shrugged and said, "supply chain costs, man."

I also noticed the size of the coffee had also decreased from an 8-ounce cup to a 6-ounce. Sneaky, right? Or is it more power to them? I still went there the next day, because overall, they are better than their competitors. They have my goodwill.

Take Amazon, for example. They've been raising their prices across the board, but people still keep shopping there. Why? Because Amazon has built up so much goodwill and brand loyalty people are willing to overlook the price hikes.

And then there are businesses that just can't seem to catch a break. I'm looking at you, movie theatres. You raise your ticket prices by a few % and suddenly everyone is up in arms about the "greedy corporations." It's not easy being in the entertainment industry these days.

In all seriousness, though, the supply chain crisis is a real issue that's affecting businesses of all sizes. Some are handling it better than others, but at the end of the day, it's up to the customer to decide whether they're willing to pay the extra costs or not.

Ultimately it still comes back to the value the customer receives, which in most cases is predicated on the quality and competency of the support and service ancillary to the products sold.

In short, it’s ok to raise your prices and provide more value than your competitors.


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