Alright folks, today I’m sharing something that saved me a ton of headaches later on. It’s all about pricing things quarterly when you’ve got this “air bubble” thing messing with your costs.
So How It All Started
I needed to set prices for the next three months, April to June. Seemed simple, right? Open a spreadsheet, plug in the numbers.
But here’s where I screwed up big time: I looked at my total costs for this “air bubble” value – basically, the wasted space or inefficiency I pay for but don’t really use fully. It was a big chunk, $100,000 for the whole year. Like an idiot, I just took that yearly number and stuck it straight into my spreadsheet for the quarter. Didn’t think twice.
So, the formula looked dumb:
- Cost per Quarter = (Total Air Bubble Cost / 4 Quarters)
- Price per Item = (Cost per Quarter / Number of Items Sold)
Smooth brain move. Went ahead and built all my pricing projections on this. Felt pretty good about it. Spreadsheet looked clean. Big mistake.
Waking Up to the Mess
Came back to review everything a week later, coffee in hand. Dug into the raw cost data. Opened my actual, physical notebook where I scribble the real numbers throughout the year.
My heart sank. That $100,000 air bubble cost? It wasn’t spread out nice and even like table salt. Nope.
Peak season wrecked my math:
- Q1 (Jan-Mar): Air Bubble cost was super low, only $10,000. Barely using the space.
- Q2 (Apr-Jun): BOOM! Went up to $70,000! Peak demand.
- Q3 (Jul-Sep): Dropped back down to $15,000.
- Q4 (Oct-Dec): Back up, but only $5,000.
Sitting there staring. That $25,000 per quarter average I used? It was pure fantasy. My nice spreadsheet was built on total nonsense.
The fallout felt like a punch: If I priced based on that fake $25k average for next quarter (Q2), I’d be charging way too little. Way, WAY too little. I’d lose a ton of cash.
Fixing My Dumb Mistake
Had to rip it all apart.
1. Ditched the fake “average” quarterly bubble cost.
2. Added a whole new column right in the spreadsheet: “Air Bubble Cost – ACTUAL Historical”. For April-June, I forced myself to look at the messy reality of $70k from last year’s Q2.
3. Rebuilt the cost calculation using THAT real, ugly Q2 bubble cost number.
4. Redid the pricing model completely. It hurt seeing the prices jump up, but that’s the real world.
The Simple Fix I Needed: I needed the actual historical bubble cost specific to the quarter I was pricing. Sounds obvious now? Yeah. Wasn’t then.
The Lesson Learned the Hard Way
Air bubble costs sneak up on you! Don’t just take the yearly number and divide it neatly. It hardly ever works like that. My numbers were all over the place depending on the season.
So now, my rule is:
Always dig up the real, historical air bubble cost FOR THAT SPECIFIC QUARTER. Look at last year, look at the season. Throw that nice average number straight in the trash where it belongs.
Trust me, this one mistake would have cost me thousands. Felt like an idiot, but hey, live and learn. Check your numbers properly!
