19 Jan

How Do You Price Your Product or Service?

It appears to be a common practice.  A business owner figures out the price of labor and materials adds an “upcharge” and VOILA – they have the price for their product or service.  It is equally common for them to know that their competitor sells the product for $25 a pound and they meet that price.  Or, their competitor makes a product for $25 a pound and they meet that price.  No matter whether it is a product or a service the price strategy is the same…I will sell at the same rate as my competitor because that is the market.  That approach will ruin your business and easily could be decreasing your profit.

Why am I saying that?

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13 Jan

Lowering Prices Could Mean Less Success

 

Your business is doing good enough.  You make enough money to pay your bills and provide for what your family needs.  You are floating along, enjoying this reward when you learn a competitor is lowering prices.  You are numb because this means they will take business away from you and now your bills may not get paid, your family and lifestyle may suffer.  This is not what you went into business for.  Now, what do you do?  Hint; it isn’t lower your prices!

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05 Aug

Why Are You Reducing Your Prices?

You’ve seen it many times.  A business owner sees a competitor lower their price on a product or service and they then decide to lower theirs to the same or slightly lower price.  Little thought is given to what exactly has occurred beyond, “I have to meet or better the prices my competitors charge.”  In simple words, this is usually the wrong approach.

Price always equals value.  Further, when pricing a product or service your goal is to not only make a profit but even before that profit, it is to communicate what you offer to the marketplace while also identifying your business’s brand.  Lowering your price sends a message many do not consider, “if you can sell it for that lower price, why have you been selling it at the higher price?”

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