Welcome to Chase your Dreams

In this episode, James Friedrich, owner of Ambler Mountain Works and founder of Venturing Up, talks about pricing strategies for entrepreneurs. Drawing from his extensive experience managing a $60 million product portfolio at MEC and his own entrepreneurial journey, James explains how to set prices based on your products’ values and avoid common pricing mistakes in order to maximize profit.

James introduces the Pricing for Profit methodology taught in his free email course. He also provides examples of well-known brands that use value-based pricing to illustrate how companies could potentially charge more for their products.

Whether you’re a fashion brand owner launching a product or looking to create healthier margins on your products, James’ advice will help you to price confidently, attract ideal customers, and build a thriving, standout brand.

About James Friedrich

James Friedrich is the owner of Ambler Mountain Works and Venturing Up. He was formerly a senior merchant at MEC where he ran a successful $60 million product portfolio. He started his career as an entrepreneur and his goal with Venturing Up is to provide entrepreneurs with the knowledge, mentorship and community he wished he had when he started out many years ago. 

Contact info

Email: james@amblermountainworks.com

LinkedIn: https://www.linkedin.com/in/jamesfriedrich/

Website: https://venturingup.com/

Free Pricing for Profit Email Course: https://venturingup.com/free-course

Takeaways

• Focus on the unique value your product provides to set prices that align with what your customers are willing to pay.
• Narrow your target to a specific audience with clear needs to improve customer engagement and justify higher pricing.
• Clearly communicate the benefits and features that make your product worth the price.
• Conduct your own research to avoid relying on competitor pricing that may not reflect your product’s true value.
• Experiment with pricing changes periodically and use sales and margin data to refine your strategy.
• Maintain healthy cash flow by pricing your products to ensure strong margins and efficient inventory turnover.
• Revisit your pricing regularly to stay competitive and ensure profitability over time.

Interview themes

What is value-based pricing?

Value-based pricing is a method where a company sets its product or service prices based on the perceived value to the customer rather than solely on production costs or competitor prices. This approach aligns prices with customer perceptions, ensuring that businesses maximize their profitability while delivering products that customers feel are worth the price. Value-based pricing requires a deep understanding of customer needs, preferences, and the unique benefits that the offering provides.

Through Venturing Up, James provides a free Pricing for Profit email course that is a step-by-step process based on value-based pricing. It teaches entrepreneurs to evaluate, test, and refine their pricing strategies to achieve profitability and sustainable growth.

What are the benefits of value-based pricing?

Increased profit margins: By pricing products based on their value to customers, businesses can charge more than cost-plus or what market-based methods typically allow. This leads to higher profit margins.

Stronger customer loyalty: Customers are more likely to stay loyal to a brand when they feel they’re receiving value that justifies the price. This builds trust and long-term relationships.

Differentiation from competitors: Value-based pricing highlights the unique benefits and features of a product, making it stand out in a crowded market.

What are some examples of brands that use value-based pricing?

James Friedrich highlights Yeti as a prime example of value-based pricing. Yeti disrupted a market of $50 coolers by offering products priced three to five times higher, focusing on premium features like extended ice retention and unmatched durability. By redefining the cooler category and building a high-end lifestyle brand, Yeti demonstrated that customers willingly pay more for exceptional value, driving the company to billion-dollar success.

Apple is another brand that James mentions as an example of using value-based pricing. Apple dominates its categories with products consistently priced higher than competitors by focusing on performance features customers care about—sleek design, intuitive usability, and status appeal. Rather than competing on cost, Apple builds products that justify their premium price through unmatched customer experience and perceived value.

How do you know if your pricing is working?

Success is not just about how many units you sell—it’s about profitability and sustainability. Business owners should measure metrics such as:

Profit margins: Are you earning enough to cover all business expenses and reinvest in growth?

Sales trends: Are your sales growing or stagnating?

Inventory turnover: Are products selling quickly enough to maintain healthy cash flow?

James suggests periodic price testing. For instance, raise your price slightly for a set period and compare revenue and sales performance to a baseline.

What are some common pricing mistakes?

Copycat pricing: Assuming competitors have done their homework can lead you to set prices that don’t reflect your product’s value. For example, if everyone else is pricing similar products at $20, that doesn’t mean your unique features can’t command $30 or more.

Undervaluing your work: Entrepreneurs often let fear or self-doubt lead to underpricing. This mindset can hurt your margins and make it impossible to scale.

Overbuilt products without value alignment: If you add costs to your product that the market doesn’t value (e.g., unnecessary features), you’ll struggle to achieve healthy margins.

How could selling lower volumes at a higher price point be beneficial?

James explains that selling lower volumes at a higher price is not always a bad thing. Increased pricing boosts margins, which could offset a drop in sales volume. He advises entrepreneurs to focus on overall profitability rather than sales numbers alone. Raising prices while delivering strong value increases margins and improves cash flow, which supports long-term growth.

What does it mean to niche and increase?

According to James, “niche and increase” means to identify and target a specific audience whose needs align with your product’s unique features. This helps differentiate your brand in the marketplace and allows you to increase prices by delivering tailored value. For example, a pediatric dentist can charge more than a general dentist by addressing specific needs for children. This targeted strategy enhances perceived value, justifies premium pricing, and builds stronger customer loyalty and market presence.

Chapters

00:00 Value-Based Pricing: Understanding Consumer Perception

01:51 James Friedrich's Journey: From Merchant to Entrepreneur

08:31 Lessons from Failure: The Birth of Venturing Up

15:46 Pricing for Profit: Strategies for Entrepreneurs

20:54 The Value Equation: Aligning Price with Perceived Value

28:57 Niche Targeting: The Key to Successful Marketing

33:43 Testing Pricing Strategies: Metrics and Adjustments

39:56 The Psychological Aspect of Pricing: Overcoming Fear

43:36 Future Goals: Expanding Ambler Mountain Works

Transcript

Glynis Tao

Welcome to Chase Your Dreams, a podcast for fashion entrepreneurs who want to build a purposeful and profitable clothing business so they can make a living doing what they love. I'm your host, Glynis Tao, an apparel business consultant and SEO specialist with 20 years apparel industry experience. I'm also a mom to a wonderfully energetic little boy named Chase.

James Friedrich is the owner of Ambler Mountain Works and Venturing Up. He was formerly a senior merchant at MEC where he ran a successful $60 million product portfolio. He started his career as an entrepreneur and his goal with Venturing Up is to provide entrepreneurs with the knowledge, mentorship and community he wished he had when he started out many years ago. 

Welcome James, it's so nice to have you here today. Thanks for joining me on the podcast.

James Friedrich

Thank you, Glynis. I'm super stoked to be here and excited to be talking to you.

Glynis Tao

Amazing. I mean, there's been a few changes that happened the last little while. I just want to get caught up here. I know about your background a little bit that you were working at MEC as a senior merchant there for about seven years?

James

Seven years.

Glynis Tao

Wow. Yeah.

And then most recently you decided to step into entrepreneurship and become the owner of Ambler Mountain Works. So that's really exciting. I think I want to touch a little bit on that in this interview. But can you just tell us a little bit about your background and how you first got into product world?

James

Yeah, for sure. And I think the story of my background is actually kind of also parlays into why I ultimately acquired Ambler Mountain Works. But I'll start at the beginning. And so my journey and product really began for me probably when I was around like 12 or 13 years old. And this was in the early to mid nineties. I'm dating myself by saying, by giving the years here. And at the time I was really into skateboarding and the trend in skateboarding was baggy pants, super, super baggy pants. At the time you couldn't buy those baggy pants. I have to buy oversized pants. You know, like I was wearing like size, like 38 pants as a 12 year old. And so I wanted to be able, so I had this thought in my mind where I was thinking, I want these baggy pants, but I want this gigantic waist. Maybe I can modify a pair of pants or do something to kind of get these, these really baggy pants I was looking for. So what I ended up doing was cutting open the inseam on a pair of existing pants. And sewing in a strip of material to turn them into, turn them into another, like a super baggy pair of pants. And that they turned it, they turned out awful. You know, it was a, I didn't know how to use a sewing machine or anything like that. But ultimately I could wear them. And that was just something about that was so inspiring and exciting that I could kind of like take and create, or in this case, modify something to, into what I was looking for. That it kind of started me down the path of getting into products. And I kept going from there.

I kept making more clothes and eventually kind of throughout my high school careers, I really got into designing and sewing clothes. I made all my own jeans. was dyeing denim. And I ultimately also figured out how to, you know, buy small amounts of like Gore-Tex and I got into outerwear, doing seam sealing and all these things kind of at home and really got into apparel and clothing design from probably about 12 years old to 17 or 18 years old.

And then my passion for snowboarding kind of kicked in and I, and I went off to the mountains and did a couple of years of snowboarding. And when I came back from, from the mountains, I wanted to be able to kind of continue to work in my passion of snowboarding. At the same time I, as I had gone to, into university and I was at the time studying engineering, I said, okay, how can I blend this like passion for snowboarding and this kind of love of like creating things.

And ultimately I thought, hey, you know what, I'm going to try and build a snowboard. And I took on this project of kind of building and constructing a snowboard. again, kind of like the, kind of like the, what I was telling you earlier about the super baggy pants. I took on this project and I was able to find materials and figure out how as a person as a hobbyist, you can actually build and construct your own snowboard. And that's what I did. Again, it wasn't perfect. There were a lot of issues with it, but it was so inspiring to me that I could build something I could go out and ride. And then I was blending this passion, this passion for snowboarding with some of my technical background that I continued to build more and more snowboards.

And ultimately when I graduated from university together with a close friend, we launched our own snowboard company. So we designed and manufactured snowboards and sold them throughout Western Canada, both direct to consumer and through wholesalers under the brand name Class 5 Snowboards. And that was a really cool experience. Ultimately, that business, that company, Class Five Snowboards, I put my heart and soul into it, but ultimately it wasn't successful.

And that experience of kind of putting all your energy and time and money into something and having it not turn out, was just a, just this huge blow to me. And it took me a long time to kind of like recover from that. But ultimately that's, you know, kind of fast forward to where I am right now and acquiring Ambler. That's ultimately what drove me to do that and the work I do at Venturing Up. My mission, kind of like a dual mission here, is that the pain that I experienced through that failure, I want to help as many people as possible avoid that pain in their own lives. At the same time as building a successful business, building and growing a successful business and using that business and the experience that I have in that business to be able to help other people. So ultimately that's why I've kind of come to, you know, come to acquire Ambler and super excited to be working in Ambler. It's because it just aligns with that long-term mission that I've had. And that's where, know, my roundabout way of kind of telling you why I'm here today as the owner of Ambler.

Glynis Tao

Yeah. Thank you for sharing that story. And I think I knew a little bit about that because I think you shared it during your talk at Apparel Camp.

James Friedrich

Yes.

Glynis Tao

Sort of where I think we first met and I heard your talk and speaking about your experience with how you've managed such a huge project portfolio and all your experience with that. I was like, this is really incredible. That's kind of what sparked me to want to reach out to you and talk about it more. And also because you have both that corporate experience working for a big brand. cause I also saw that you worked at Mustang Survival.

James Friedrich

Yeah, that's right. So when things kind of were wrapping up with Class Five, I was looking kind of like, okay, I'm looking where would I go next? And I found this company in Vancouver, Mustang Survival. And it just seemed like at the time a perfect fit for me because they were making very technical products, but they were apparel based products. So we were making, you know, life saving equipment that was made from apparel. it kind of blended this background that I had of, you know, designing and making my own clothes, but also this engineering and technical engineering background I had. So I got a job there as a product development engineer, bringing, you know, designing and running new product development projects and bringing new products to market. And that was just such a wonderful experience working for that company.

There was so much, so much learning that happened there. But the one question that I would always kind of like sit in the back of my mind was we would technically be able to execute on a product, like design and create a product where it would meet the product specifications. But that didn't necessarily mean that the product was going to be successful in the marketplace. So just because we could technically design something didn't mean commercially it was going to be successful. And that kind of exploring that question along with the passion that I had mentioned earlier around the, you know, that pain of helping other entrepreneurs kind of kept pushing me to look at what's further up the chain. What are the inputs that come into product development projects? How do we create products that are successful? And I moved from being a product development engineer into being the commercial product manager for Mustang. So I managed the recreational product portfolio, all of our sailing, fishing, and general recreational products that you would find through retailers.

And that was such a great exposure into dealing with, you know, retail buyers. At the time our big accounts were people like Bass Pro in the U S Cabela's in the US, those people who are familiar with boating. There's a big company called West Marine that has like, think 180 doors in the US something along those lines. So dealing with these large retailers, especialty retailers as a product manager was so just, just really unlocked this whole new world of sitting between developing product, working with their sales teams and understanding what these large retailers want.

That whole experience at Mustang was just like, there was just so many positives and so much learning I took out of my time there that kind of informed me and helped me as I've been, you know, in the various stages, other things I've done throughout my career.

Glynis Tao

That stepping stone towards becoming a senior merchant at MEC, which was your next role. And then, like just kind of going through your journey of how you became a senior merchant at MEC to founding Venturing Up and then now becoming the owner of Ambler Mountain Works. I think now this like, you know, explains a little bit better and I think I have better understanding of what was going on. I think your why or your reason was always wanting to help other people, to avoid the pain that you had went through when you had first started your business, right? Classified snowboards and anything that was, so that was always that driving force, right? Behind everything that you did.

James Friedrich

Yeah, there was always some part of that was just there because that pain, the pain was deep. So it was always kind of in the back of my mind and when I left Mustang to join MEC and become a merchant, it was just kind of a dream come true in some ways. Working for MEC had always been something that I had in the back of my mind. I just, I really loved the values based organization. I loved the products that the company dealt with. I loved at the time it was a co-op and I loved the co-op structure. And so being able to like move into MEC and get a job as a merchant was incredible.

The cool thing for me that I found and the insight that I was able to gain from MEC, when you're working within a brand or within your own company, you're kind of just, you're a little bit siloed. You get to see what other brands or companies are putting out there in their marketing or what's on display on the store shelves of various retailers. But you don't quite know what's happening behind the scenes. Like how is one brand performing against another brand?

What's the standard in the industry and the cool part about working for that I found about working for a company like MEC is you really got that behind the scenes look. And I got to deal with hundreds and hundreds of companies and over my career, thousands and thousands of products. And you get to see, what's working and what's not working and what brands kind of have everything together and both outwardly and inwardly or vice versa. And it was, it was just such a, you know, this breadth of experience that I got to gain from  that, that I don't know how you'd be able to get an experience like that elsewhere because you're not going to get exposed to all those behind the scenes numbers. Like, this brand, they're crushing it, but nobody even knows them. They're just like, they're a small brand and they're just doing so well. They're not even on the radar for everyone else.

Or this big brand that everyone thinks is amazing. Actually they suck in all these areas and you don't get that insight because you can't see behind the curtain. And being able to kind of experience that firsthand with MEC was awesome. And it really provided me with a lot of insight that ultimately led to why I started Venturing Up. Cause I was reflecting on my career and that pain from Class Five and and now with this breadth of experience in a lot of different areas. I was like, you know, maybe there's a way I can kind of like be involved with entrepreneurs now and help them, help them in some way, which is, I think it was like two-ish years ago that I started Venturing Up and alongside working at MEC and consulting with startup engineers, startup entrepreneurs to help them kind of like launch and grow their, launch and grow their product businesses.

Glynis Tao

How did your experience managing a $60 million product portfolio at MEC influence the methodology that you teach in your free email course, Pricing for Profit? Actually, by the way, you can access James's course, Pricing for Profit, on your website, VenturingUp.com/free course, right? So I just wanted to spend a little bit of time talking about that and just sort of how your experience sort of played into your role in helping entrepreneurs and Venturing Up.

James Friedrich

Sure. Yeah. And as it relates to the pricing, like, you know, what I saw is, and I think a lot of people have experienced this too. When you're in a product business, you know, the price of your product, the cost of your product, and ultimately the price of your product, the difference between those two being your margin. That's what, that has to pay for everything that you do in your business. That's all your profits. That's all the, you know, non-product related expenses.

Everything that happens in your business is based on your margin. So your price is really, really important because it's ultimately what's going to define your profitability and the potential for your products to sell. As you know, having worked on so many products, I've seen every pricing strategy out there and I've seen it be successful for one reason or another, and also not be successful for other reasons.

And what I want to be able to do with the Pricing for Profit email course was to be able to address the common challenges that I saw with small entrepreneurs as it relates to pricing. And the first thing that we want to be aware of is that entrepreneurs can sometimes feel that their cost is too high and that they, because they're not getting any economies of scale.

Often as a startup business, you're kind of just squeaking in, you're getting the minimum order quantity from a factory or on a, with a supplier or a trim or something like that. And you're kind of, your costs are always, your product costs are always at kind of the highest they're going to be when you're starting out because you have no volume to put behind those product costs. So a lot of times people felt, and I certainly felt it too, that my margin was getting squeezed because of my costing.

And that's, that's true to some degree, but what I wanted to shine a light on with Pricing for Profit is how much opportunity there is for you as a small entrepreneur to get it right on your pricing. And you know, the way I like to think about it is like, you can spend three or four months trying to reduce your product costs by a few dollars, or you can spend like five or 10 minutes increasing your price by that same amount. And the leverage that you get on pricing, the return on investment and turn on time you get from pricing just can't be matched.

But you can't just go around changing your prices to whatever you want just because you feel like it. So with Pricing for Profit, we provide a step-by-step system, a systematic process that you can go through to really evaluate how your product creates value in the marketplace and to set a price that provides you profit. But also your customers and the people who buy your product are going to see it as being valuable and ultimately purchase your purchase product.

So that's what, that was just a huge leverage point that I saw a lot of entrepreneurs struggling with. So yeah, you can, you can download that. It's a 10 step email course. If you just go to venturingup.com, you'll see it. You can sign up for that. You'll get those emails and we'll walk you through step by step exactly how to do that for your business. It’s totally free. Yeah, so if you're interested, I would check that out.

Glynis Tao

Yeah. So I would recommend anyone listening with the product-based business to go check out James's course because it's a different way of looking at pricing. would say compared to typically how, you know, how I've always done it and how I was taught was looking at your margins, right? And just like making sure that you have enough margin, you're calculating at maybe a 50% gross margin. Yeah. But you actually discouraged costs plus pricing model, right? Talking about how businesses shouldn't only determine the price based only on their production costs alone, but to look more into the product value.

James Friedrich

Yes. Yeah, totally. And that's that's exactly

There's a saying out there and I've heard it before, but I'll kind of paraphrase it or steal it here is that like, nobody cares how much the product costs you to make. When we go buy something on sale at a store and we see it 50% off, we don't think of that, you know, that product's getting sold for the same as it costs them to make. Or if we know, a product costs thousands of dollars.

We don't, we don't know what the costs are and we don't as consumers, we don't actually care what the costs are. What we care about is how is that product providing value to us? And if we can take a value-based lens to our pricing, that means that we can effectively create a price for that product that's based on the value it creates in the marketplace. And if our costs are low, then we can compare to the value that we're creating, then we get that margin, and that margin can be higher than a 50% or a 60% margin.

But the reverse is also true, where if we have built a lot of cost into our product, but the marketplace doesn't value those costs that we built into our product, then our margins are going to be tight. The market doesn't value what we've done. And both, I've seen both those examples, but at least when you have the value-based pricing, you've done some of that methodology. Even if your costs, you're seeing, you know what, I've maybe overbuilt my product. You have some idea of what to take out of the product to reduce those costs and bring your value back in line.

I'll pop one more in there. The other one that I see as being really common is copycat pricing where you just have a product and you just look in the marketplace and you see everyone else is selling their similar product for $20. So guess what? That's going to be my price too, $20. This product is just worth $20. And that again, it's just, there's a whole bunch of bad things. The number one thing that's built into that is that you've made an assumption that everyone else has all done their homework and they've magically picked the perfect price for the product.

So you assume that everyone else has it all together, which in my experience, most people do not, right? You get to peek behind the curtain of a bunch of different companies. Most people, they're all kind of like struggling in the same way that you are. So don't assume people are smarter than you and do that research. And there may be an opportunity for a product, let's say a product priced at $20 for there to be a $30 product, a $40 product or a $50 product that's just been unexplored in the marketplace.

And I'll give just a little example of that. If we rewind maybe like 10, 11 years ago in the cooler market, you used to go to the Canadian Tire and you would buy a Coleman cooler and it would be, I don't know, 50 or 60 bucks or something like that. And then along came a brand named Yeti who took a totally different view on the cooler market.

And came out with coolers that were three, four, five times the price point of, of what a Coleman cooler would be at a store like Canadian Tire. But they backed it up with reasons like why that cooler was so great, you know, how long the ice would last in it, that you could stand on top and all these other features. And guess what? There's a huge market there. And now Yetis, you know, they opened this giant marketplace. Yeti’s well over a billion, I don't know what the actual revenue is, but it's, you know, a dominant player and opened up a brand new category of these high-end coolers. And guess what? There was a value, there's a place in the market for something like that, that nobody had been exploring. And that can be available to you too.

Glynis Tao

Yeah. So that's great. So that's another example of just using the concept of providing value or what you call that. Is that how you describe the value equation in your course about how you leverage this? Can explain how entrepreneurs can leverage this equation to be able to align the product price with customers' perceived value?

James Friedrich

Yeah, sure. So the equation that I've used, and I got this a number of years ago from engineering actually, is that we were looking at these large projects that were multi-million dollar projects. Some projects might be $5 million and one project might be $2 million. Well, how do you compare which one's better? These are just vastly different things. And there's an equation that I learned called the value equation, which is that we see value as being the performance of something divided by the cost. And we can think about this. I'll give you a couple of common examples of how that equation might apply.

The first one is Costco. So you go into Costco and people would say, is Costco good value? People, people generally say, yeah, Costco is great value, right? Why is Costco such a great value? Because when you, when you go in there, you get a lot of stuff or you get a big package, right? You're getting a lot of things and what you're paying for that is probably similar or less than what you might pay at a regular, a different store. So the value equation there is saying the performance in this case with Costco is I'm getting a lot of things for cost that is relatively the same. So that's great value. That's really, that's really good values. Okay. Well, there's one example and that seems like an obvious one. many people will be like, yeah, Costco is great value. 

Another way of thinking about the value equation is when we think of low cost or products that were lower price, we often call them value. It’s really good value. But when things get higher priced, our language changes to being like, that's really valuable. But it's the same thing, right? We're saying the same thing as like there's something behind that.

And another brand that is creating high value products, but we kind of use the word valuable more is Apple. So Apple doesn't have low priced products. Apple's products are typically the highest priced products in the categories that it competes in. But we don't see those products as being or crappy or anything like that. We see those products as being amazing and highly desirable. And again, because of the value equation, what Apple's done is they understand the performance that their customers are looking for.

They're looking for products that are beautiful, products that are really easy to use, products that give them some level of status when they're using them. Those are all the performance characteristics that Apple's building into their products.

And as such, they can charge a higher price for them, but the value equation still holds because those performance characteristics are high, but the cost, even though it's higher, is still justified based on those performance characteristics. So again, we see that as being really valuable. So using that value equation to your advantage is really about understanding what the performance that your product creates relative to the cost of your product itself. And that's kind of the heart and soul of value-based pricing.

Glynis Tao

And in your course, you actually teach people how to calculate that or how to come up with that equation.

James Friedrich

Totally. We go through a step-by-step process of being able to take that value equation, define the performance of your product, go out and objectively measure that performance as it relates to your cost and and be able to, you know, it's a step-by-step process to be able to get you into the target range for your pricing so that you have a confident kind of objective based approach to start your pricing from.

Glynis Tao

Okay. Awesome. Let's move on to customer targeting niche market focus. Sure. So in your course, you discuss the importance of targeting a specific niche.

How can entrepreneurs effectively identify and target a niche and what impact does this have on pricing?

James Friedrich

Yeah. So niche is niche or just a target market in some way is so important because if we end up targeting everyone, we kind of end up targeting no one. And the example that I'll give is, you know, just the difference between target markets is I'll say, let's imagine I have a few kids and I need to take my kids to the dentist and there's a regular dentist and there's a dentist that specializes in kids. So those two dentists, if I took my kids to them, those two dentists might do the exact same thing to check my kids' teeth and clean them and whatnot.

But the dentist that has said that they're specifically a kid's dentist is likely to be able to charge a lot more and also be able to speak to exactly what they're doing. As a parent who has a kid who needs to go to the dentist, I'm to be way more engaged and intrigued and open to looking at that dentist, the kid dentist, only because they have targeted the person that they're servicing. And when we can kind of niche down and target specifically who we're going after, it allows our language to be more precise. It allows the value propositions from the value equation to be more specific to the pain that that person might be feeling. And it just increases the likelihood that we're going to be successful with our product.

And now, Glynis, I know you do SEO work and some marketing work, and I'm sure that if a client came to you and knew some very specific target market information, it's going to be a lot easier for you to execute on the backend because you have an idea of who, okay, who are they going after and what keywords might be associated with that target and how can we write SEO copy for our website that's going to kind of like appeal to those keywords, but also to that target demographic. It just makes the entire process, everything you're doing become easier and more streamlined by having a tight target market.

Glynis Tao

You're absolutely right about that. Even in my work it all goes back to your ideal customer and who is it that you're trying to appeal to that you're trying to attract? Cause if you have no idea, you're not going to know what to say to them. So everything that you do from your pricing, your marketing, the language that you use, you know, what you say to them even like for me as a starting point, when it comes to keyword research, right? We need to know who's your audience.

James Friedrich

Exactly.

Glynis Tao

So that we could choose those right, the right keywords based on what it is that they're looking for.

James Friedrich

Yeah, exactly. And you know, I know for a lot of people starting out and I've had this fear myself is that sometimes we look at these target markets and we niche down to like a more precise target market and we can sometimes feel like, Ooh, geez, we're cutting out all this potential by going more niche. It means I'm not going to have as many opportunities to sell my product or services.

And the first thing that I want to say to this is you're not getting married to this person, right? Like, it's not like you target this person and that's who you can target. That's the only person you can ever target for the rest of your life. You know, you've now set this in stone. It's a target market that can change. You can add target markets. You can adjust and refine these things over time. So you don't have to feel locked into something that somehow a target market is going to limit your potential.

But what it is going to do is again, provide you that ability to kind of talk to someone specifically, and it's going to be far more likely that you'll get some traction going. And then yeah, you can adjust and refine along the way. And ultimately like, you know, learn and change who might be the right for you.

Glynis Tao

Yes, I totally agree with that. Let's just move on to pricing strategy and testing because in your course, you recommend assigning performance scores to product benefits. I mean, without getting into too much, but maybe you just sort of explain how companies can objectively measure these scores and how it helps in setting the right price. And maybe you could just touch briefly on this. We'll recommend the listener to go sign up for your course on how to do that, but maybe you could just sort of explain.

James Friedrich

Yeah, on the outset, what we want to be able to do is we can't ignore, if you have a product, we can't ignore that there are other products in the marketplace that even if they're not doing the exact same thing that your product is doing, there's probably competitive products around your product. And so we have to understand that those exist and that they have a price associated with them and that the marketplace can see that price. So in some ways, those competitive products are helping to define what the value is of your product.

So the Pricing for Profit methodology essentially looks at your product and the feature sets or the performance characteristics that you're creating and also compares those to the feature sets and performance characteristics of the competitive set to help you understand where your value lies.

Now, what's really interesting is if you've designed something into your product or the way that you're positioning yourself or bringing your product to market is unique in the marketplace, well, then there's no market value associated with that kind of those unique characteristics. And that allows you to set higher prices on those unique areas because there isn't a comparable thing in the marketplace that the consumer can judge against.

So, that's the essence of the process is to be able to kind of like use these objective measures and objective methodology to help set your pricing and then take that product to the market and start doing some testing with it and seeing how the actual product performs in the marketplace with the pricing that you set.

Glynis Tao

Amazing. How often should businesses revisit and test their pricing strategies and what key metrics should they be tracking during these tests?

James Friedrich

Yeah. So it depends a lot on the business and the type of product. I'm going to take the assumption here that the person listening to this podcast is going to be in a more fashion based business. So that means they're coming out with, you know, a seasonal product line. Maybe twice a year or four times a year. And for someone like that, you're not going to be able to change your pricing mid season. That's not going to work with your retail partners or with your consumers, because that's just the way the industry flows there.

But I would certainly be looking at your pricing every single season and the performance of your pricing of your products every season and how those metrics might impact a future season for you. If it's a product that is more of an evergreen product that's living and isn't seasonally based then I would be reviewing that product again every like, you know, three months or six months to see how the pricing is affecting it.

If you're in a direct to consumer channel, primarily direct to consumer, you're in a wonderful position because you don't have retail partners to worry about. And then you can actually change your products, your pricing of your products, kind of as you want. I wouldn't change them all the time, but you can certainly experiment with pricing a lot more. And especially if you're not a big company, it's unlikely that your consumers are really going to notice some price experimenting that's happening for you. And it gives you a lot of opportunity to test and refine pricing. The main thing is that you want to be able to leave a product at a price for long enough that you're seeing a sales result that follows it. If you're changing prices too quickly, you might not be getting accurate data.

So what I would recommend is that you take a period of time with a look at a baseline for a period of time with a product and look at how it's selling, make a price change, leave it at that price change for some period of time again, to be able to compare those two. Did we sell more? Did we sell less? Did we sell the same? And be able to refine just, you know, reviewing those two hopefully somewhat equal periods of time to create that objective difference.

The one thing I will mention on price comparison is that if you've increased the price of your product and your sales went down in terms of like the number of units, let's say it went down, that might not be a bad thing. If your margin is increasing, you might be making more margin on slightly less revenue than if you kind of sold more products for a smaller price. So just really look at the facts kind of behind your products there, because sometimes having a slightly lower revenue is a good thing. If your margin is increased, it makes your business simpler and there's less to do there.

Glynis Tao

Yeah, I know. Cause sometimes people think that they're focused on the number selling more of one thing, but are you pricing your product too low? Is that a sign of telling you that maybe you priced your products too low? If it's selling, you know, so much of this one thing, right? But are you actually making money off of it? Whereas if you increase your price of it, maybe you'd sell less, but you'd be making more.

James Friedrich

Exactly. Yeah. Yeah. And I've seen that come true many times.

Glynis Tao

Yeah. I think people are sort of afraid of how to price their products, especially when they're first starting out. And I've encountered so many startups who are just sort of like, I'll just mark it up this much because, you know, I have to be competitive be aligned with what's out there in the market, but they're not pricing it for profit. I'm like, you're not going to survive if you're thinking of going in with the mindset of losing money from the beginning.

James Friedrich

Yeah. Your margin is so important there and the mindset you're talking about, the fear and the entrepreneurial fear of not pricing your products high enough. There's a psychological component to us as business owners and entrepreneurs where sometimes we feel our work isn't worth the price that the market might be willing to pay for it. It's almost more about us in that sense than it is about what the market thinks.

And that's the goal of the Pricing for Profit exercise is to kind of take yourself out of the equation and look at the objective information that's available to you to make those decisions. And you may be surprised yourself about what you find when you look at it that way.

Glynis Tao

And so the goal of Pricing for Profit, it says on your website, with a properly priced product, you'll realize an increase in revenue, improved cash flow and more profit.

James Friedrich

Exactly.

Glynis Tao

Yeah. So I mean, what other things would come out of pricing products properly, besides cash flow, maybe even customer retention. So I guess the question is how can a well priced product impact other areas of their business, such as cash flow and customer retention?

James Friedrich

Yeah, well, cash flow is directly tied to the product pricing and margin. And in most product businesses, your biggest expense is going to be your inventory. You're spending a lot of money to bring this inventory in. And then there's these physical products that are sitting there that can be turned into cash. And if you're not cycling that inventory over, that could be what causes the issue in your business not to succeed.

So cash is king in a product business, which is kind of the big impetus behind the Pricing for Profit is being able to properly price those products that you're maximizing your cash flow. Cause in the beginning, if you can get your products moving, your cash moving, things cycling through, that is an opportunity for you to grow your business. A business that's gaining momentum in that way, cycling through products, cycling through cash is one that in the marketplace, people are going to be seeing as something that's working, there's going to be momentum, excitement behind it. And it's just all of those things that come and help you ultimately sell more products and help your business to become more successful.

Glynis Tao

Before we wrap up, I just want to ask for entrepreneurs who are looking to prove both their pricing and profit margins. What is the key advice that you would offer based on your experience?

James Friedrich

Yeah. Well, niche and increase is kind of what I say in my head.

So niche in the sense of niche down your target, understand who you're going after. And when you've niched down your target market, there's an opportunity for you to increase your product price because you're going to understand how your product creates value for that target market. And there's going to be an opportunity for you to increase there.

I would say niche and increase are the things that kind of pop to mind.

Glynis Tao

Before we end off, mean, like, how are you going to use your experience that you gained from everything you've done so far and to now run Ambler?

James Friedrich

Yeah, well, I'm super excited. I mean, it's a full circle moment for me to be owning Ambler and ultimately my mission is to help as many entrepreneurs as possible as well as growing a successful business. And I feel so fortunate to have had all the experiences, good and bad, that I've had throughout my career, because even those times are really challenging and hard. Those are the times when you often learn the most, even though you didn't kind of feel that way, maybe at the moment. And all of that experience, I'm excited to kind of put it into practice with Ambler. And my goal is ultimately to be able to take that experience that I've had throughout my career and the experiences that I'm going to have with Ambler and be able to use those to help other people. And so that's my goal. I don't know exactly how that's all going to pan out or work yet, but that's the intention and I'm just really excited to do it.

Glynis Tao

Yeah. I mean, can you share with us some things that you're looking to do with Ambler?

James Friedrich

Yeah. Well, there's a lot of opportunities at the company. Jackie and Christian, who were the previous owners, they owned it for 15 years, did an amazing job of running and building this brand up. So my goal is to be able to just capitalize on the amazing work that they've done. And what I can see is that there's a geographic opportunity for Ambler in Eastern Canada, looking to increase our geographic presence there. There's a number of brand opportunities and some product opportunities with the company.

And so kind of exploring all those and above that, we do some amazing custom products and I'm really excited to dive into and grow that custom area of the business. So if anyone's listening to this and they're looking for small run custom headwear, come check us out at amblermountainworks.com. We have an awesome custom program and would love to help you out in making your custom hat dreams become a reality.

Glynis Tao

Amazing. And your products are made in Canada still, right?

James Friedrich

Well, everything Ambler does is either made in Canada or Fairtrade from Nepal. So it's just a super strong values based company, which aligns perfectly with me. And so, yeah, it's either Fair Trade Nepal or made in Canada. So it's awesome to be able to, you know, from a value standpoint, just work in personal alignment with those things. And I'm super excited about it.

Glynis Tao

I'm so excited for you, James, and just so happy to see how everything you've done has come together for you. And, just excited to see where this all goes.

James Friedrich

Yeah, thank you. I am too. And I appreciate being on the podcast, Glynis. I'm super appreciative of the time being able to talk to you and have this experience.

Glynis Tao

Amazing. And where could people find you if they want to get in touch with you?

James Friedrich

Yeah, for sure. So if you want to get in touch with me, you can check me out at venturingup.com. I'm also active on LinkedIn, LinkedIn James Friedrich. Friedrich is spelled fried and then rich. And check me out on LinkedIn, give me a follow, or you can also check out our products on Ambler at amblermw.com.

Glynis Tao

Amazing. And you can access James' free step-by-step email course, Pricing for Profit, through James' website, is venturingup.com. You'll be able to find it there. And I'll put a link in the description for this podcast right down below in the description area.

Thank you so much, James, for being here today and sharing your entrepreneurial experience, product and pricing expertise and insights with us today.

James Friedrich

Awesome. Thanks, Glynis. I appreciate it.