PRICING LAB

Price is a lever, not a landmine.

What It Is: A practical field guide and experiment hub for operators who want to understand, test, and improve their pricing. 

Why We Built This: Let’s go back to the chaos of 2020-2021. Input costs went wild. Freight, labor, and storage costs became moving targets. The cost to produce anything was, frankly, unknown. 

Mid-2020, two levers kept emerging as ways to stay strong in the midst of uncertainty:

  1. Protect your balance sheet and banking relationships.

  2. Fix your pricing.

For many operators and many companies, it was the first time that costs weren’t moving in small, relatively predictable steps. The usual “we’ll adjust prices at the end of the year” playbook broke. Instead of asking, “How do we implement this?” people were saying, “We can’t do this to our customers.”

And, that’s a completely normal human response. After all, we’re consumers too. But your business is not a bank (unless it is). And your business is not your customer’s parent. Your job is to deliver on what you offer and they value, not to protect them from the world.

Why? Price isn’t just what you charge – it’s a reflection of what people value and are willing to pay. It’s also the margin that lets you withstand shocks (like tariffs, or a pandemic). If you’re consistently underpricing, there’s no amount of financial engineering that will save you. Eventually, the margin deficit catches up and the business breaks. 

It’s especially true for small companies, which don’t enjoy the same economies of scale as their larger competitors. That means they have to be sharper about where, why, and how much value customers find in their products or services. The key questions are: What can you do that’s niche, premium, and genuinely worth paying for? Where can you afford to be cheaper? Where do you have to be paid for the value you’re providing?

Still, there’s no single “right” way to price. The only approach that consistently fails (even if it feels easier in the moment) is never raising prices at all. Prices that never move stop tracking reality. That erodes the value of the business and, in time, sends a signal to investors and partners about how you think about stewardship (or not). 

The Pricing Lab exists because we want operators to be better equipped for those moments. We want to understand – and help the operators around us understand – how companies think about pricing, how they’re positioned against competitors, and what they can do to exercise pricing power without abusing trust. 

Welcome to our collection of case studies, frameworks, experiments, and scripts that make decisions around price a little less intimidating and a lot more deliberate.

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This document is provided solely for general informational and discussion purposes and is intended to offer insight into certain philosophies, principles, and approaches that Permanent Equity may employ when partnering with the management teams of its portfolio companies following an investment. The material is illustrative in nature only and does not describe a required, uniform, or exhaustive set of practices or expectations.

This document is not intended to be, and should not be construed as, legal, tax, accounting, investment, or other professional advice, nor as creating, modifying, or implying any legal rights, obligations, fiduciary duties, standards of conduct, or contractual commitments. Nothing herein should be relied upon as a substitute for individualized advice or negotiated agreements.

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The practices, decision making frameworks, expectations, and examples referenced in this document are intended solely to illustrate how Permanent Equity may work with certain portfolio companies in certain circumstances. Actual practices vary based on the specific facts, negotiated contractual arrangements, regulatory considerations, industry dynamics, and stage of the business, and may change over time. No representation is made that any approach described herein will apply to any particular company, management team, transaction, or situation.

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Readers should consult their own legal, tax, financial, and other professional advisers regarding the applicability of any concepts described herein to their specific circumstances.

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