Articles

Cost Honesty and Fair Pricing

Charles SharmanAugust 29, 2015

Seven:Twelve Engineering, the company behind Crossbeams, has a Cost Honesty and Fair Pricing distinctive. Part of it reads:

“We charge a fair price—one that enables us to make a living but doesn't gouge you. We make our costs available to you. You never pay more than twice what it costs us to make any product.”

That choice has kept Crossbeams out of more traditional toy distribution channels. For example, retailers typically charge twice their cost, which is known as Keystone markup. However, retailers want price parity—equal prices on our crossbeamstoy.com website and in their shop. To make money using retailers, then, we'd have to charge more than twice our cost on our website. That violates our Cost Honesty and Fair Pricing distinctive, so we don't use retailers.

More recently, we realized our Crossbeams printed instructions violated our Cost Honesty and Fair Pricing distinctive. When we released Crossbeams, to simplify things, we chose to charge a fixed price for all printed instructions based on our cost to print a 32-page instruction booklet. However, many instruction booklets are well below 32 pages in length. Some of those shorter instruction booklet prices violated our distinctive. So, we spent the time, did the math, and re-priced our instruction booklets, releasing the new prices August 29.

Sure, the difference between $1.85 and $1.41 won't hurt you when you're making a $60 total purchase. But faithlessness in little things ultimately leads to faithlessness in big things. Enjoy your lower-priced instructions!