Your barrel costs $150 to make, so you’re making $150 a barrel, right? Not once you count the software subscriptions, bank fees, insurance and all the other costs that slip your mind. Here’s why your competitor’s price is no guide to what you should charge.

A 5% price change doesn’t sound like much. But in our barrel business, raising prices by 5% added $61,425 to the year, and lowering them by 5% shrank it from $614,400 to under $200,000. Here’s why you should never, ever lower your prices.