Pricing for Profit: A Vendor's Guide to Protecting Your Margin

The squeeze is real

If your pricing hasn't moved in a year and a half, you're effectively giving clients a discount funded out of your own paycheck. Here's how to fix it without scaring the pipeline away.

1. Work out your real hourly

Add up every direct cost on your last five jobs — materials, fuel, contractor labour, software, a share of your insurance. Divide by hours worked. That's your real break-even rate. Most vendors find it's 20–35% higher than they assumed.

2. Set a target margin

Healthy creative-services businesses aim for a 30–40% net margin. Work backward:

> Package price = (true hourly × hours) ÷ (1 – target margin)

A 10-hour job at a true cost of $85/hour with a 35% margin lands at **$1,308**, not $850.

3. Reset your minimums

Update the numbers on your site and in your pitch decks. Anchor high. Discount selectively, for the clients you actually want.

4. Communicate the change cleanly

Honour quoted prices for anyone already in the pipeline. For new inquiries, lead with the new number, calmly. No apologies. "Our 2026 packages start at X" is a full sentence.

5. Add an inflation clause

For contracts more than six months out, add a clause allowing a 3–5% adjustment tied to a published index. Most clients accept it without pushing back.

Protecting your margin isn't greedy. It's what keeps you in business for the next client.