How to establish your pricing policy

Your most straightforward pricing decision will be for new books, where you should generally stick to the Recommended Retail Price (RRP) printed on the cover. For used books and other items like gifts or stationery, you'll need a more flexible strategy based on your costs, the item's condition, and what customers are willing to pay. Getting this balance right is crucial for keeping your prices competitive while ensuring your business is profitable.

Pricing New Books: Stick to the RRP

In the UK book trade, it is standard practice to sell new books at the RRP set by the publisher. This is the price customers expect to see, and it’s usually printed on the book’s cover. While major chains might offer discounts, as a small independent, competing on price is a tough game. Sticking to the RRP respects the value of the book and protects your profit margin, which is already set by the trade discount you receive from the publisher.

Pricing Used and Second-Hand Books

Pricing used books is more of an art than a science. Unlike new books, there’s no set price, so you need to assess each one individually. Your final price should be based on a few key factors:

• Condition: A book that looks almost new will sell for far more than a copy that is worn or has notes in the margins. Be honest in your assessment.
• Rarity and Demand: Is the book a common paperback or a hard-to-find first edition? Check online marketplaces like AbeBooks or eBay to see what similar copies are selling for.
• Your Cost: How much did you pay for the book? Always ensure your selling price gives you a healthy profit. A good rule of thumb for a standard used paperback in good condition is to price it at around 40-50% of its original RRP.

Pricing Non-Book Items

For items like greetings cards, stationery, and gifts, you’ll use a more traditional retail pricing formula. The most common method is known as ‘keystone pricing’.

Keystone pricing is a simple strategy where you set the retail price at double the wholesale price you paid. For example, if you bought a pack of cards for £5, you would sell it for £10. This gives you a 50% gross margin, which is a standard benchmark in retail.

This is a great starting point, but you can adjust it. If an item is particularly unique or high-quality, you might be able to charge a little more. If you’re selling a more common item, check what nearby shops are charging to make sure your price is competitive.