Is It Time to Raise Prices? A Simple Framework for SMBs

Esprit Smith
Aug 21
2 min read

Many small and mid-sized businesses don’t revisit pricing regularly. Instead, they absorb rising costs and hope margins hold. But a thoughtful pricing audit can unlock profit without alienating customers.

Here’s a step-by-step framework I use with clients to evaluate if a price increase makes sense

Step 0: Factor in Market Conditions

Monitor tariff updates and import duties that directly affect your categories
Watch global commodity prices (cotton, packaging, freight)
Note regional differences — what hits imported goods may not impact local competitors

Step 1: Group Products Into Bronze, Silver, and Gold

Bronze: Entry price point items that introduce customers to your brand
Silver: “Aspirational” mid-market products
Gold: Premium or flagship items (usually your highest-priced, most exclusive products)

💡 Example in apparel: Forever 21 (Bronze), Zara (Silver), Ralph Lauren (Gold).

Step 2: Calculate Average Price Points

For each category:

Add up the prices
Divide by the number of items

This gives you the “typical” price your customer expects in Bronze, Silver, and Gold tiers.

Step 3: Research Competitor Pricing

Look across three levels:

Smaller niche brands (online-only competitors)
Big national retailers (Nordstrom, Neiman Marcus)
Local/regional players (factory outlets, private-label goods)

📊 Tools to try:

CamelCamelCamel – scrapes pricing on major retail sites
Helium 10 – shows competitor sales data at different price points

Step 4: Build Price Increase Scenarios

Test out “what if” models:

Apply competitor pricing benchmarks
Layer in your P&L to see revenue and margin shifts if prices rise by 3%, 5%, 10%

Even small changes can have big impact. A 5% increase on your bestsellers may add thousands in margin annually.

Step 5: Implement + Monitor

Roll out your new prices
Track sales volume and customer reactions
If sales hold steady, great — you’ve grown profitability
If sales dip sharply, reassess and adjust

✨ Pro tip: Test modest increases first, especially on products with strong demand.