We Start By Initializing The "Base Case"

In my Pricing / Forecasting projects ($4,900 ... kevinh@minethatdata.com), I start by initializing a "base case" ... what would happen under normal conditions, same prices?

This business is at equilibrium .... the customer file is at a comparable size year-over-year, which means sales/profit are comparably year-over-year. We now have our "base case".

Let's say your cost of goods increase by 15% this year. Let's say you keep prices the same, you eat the profit instead of the customer. Does the cost of goods increase eat up profit?

Look at that ... you eat $4,000,000 in profit.

You're not going to eat $4,000,000 in profit, are you? You'll pass the cost along to the customer. Tomorrow, we'll see if the customer is willing to eat up discretionary spend as a consequence.