Bud says, "The price strategy has to be part of the fun.

If a customer picks up a tag and says, 'This is uncomfortable for me," it's not fun. ...it doesn't have to be cheap. It has to be something that she expects it to be. I think that's probably the key."

Topic for discussion: Typically we price something based on our cost of goods (including direct costs such as materials and labor) and indirect costs (marketing and administrative), so we have some margin. Margin is good, but Bud wants us to be also sensitive to "the feel good factor." Oh boy, if it isn't hard enough just to break even, we now have a "fun" factor. Is this good business?

Answer: The proof is in their presence. Look at Bud and Nicole, they not only exist; they thrive. Creating a "fun" moment --"I'm going to buy this!" -- that feel-good factor is not just good business, it is good for our souls. Bud isn't talking about what "the market will bear" or some multiplier of his total costs; he is talking about a unwritten contract between the buyer and seller. "You treat me fair, you make a good profit, stay in business and keep making things that I enjoy, and I will give you my business."

Topic for discussion: Bud says, "The buyer half the time has no idea who her customer is because department stores deal in traffic. Where a small store deals in trade. She knows her customer, she knows Alice, she knows Mary, she knows Sally, she knows Joan and she buys for them. And that's a business."

The distinction is between traffic and trade.

Later in the show you meet Stephanie Lyons of the La Jolla store. She says that it's the customers: "...La Jolla, Del Mar, Rancho Santa Fe – they are fabulous customers." She knows them. What is primarily real in business is the relations we have with the people around us, employees, supplier, resellers, and customers.

In this time, when we can know so much about anybody, how well should we know our customers?

Answer: Very well. But not as an invasion of their privacy; we should know people in real relations that are built upon social interactions and real events. Increasingly, small business has a important role to play to be a place where people really know your name. It is a part of that unwritten contract that is based on a trust muscle that needs to be exercised. There is so much distrust that is inculcated in our society through commercial television and global events, we all need small places to go.

What do you think? Would you price your products and services differently if you knew your customer more intimately? Can you add the cost of "fun" to your cost of doing business, thereby increase prices and increase sales activity at the same time? Can you more skillfully craft your niche?