By inspire | Social Media Oct 04 2016
Unless you’re required to sell a product at a specific price point, like the MSRP (manufacturer’s suggested retail price), then you’re in charge of the anxiety-inducing task of setting your prices in your store. It’s not easy, considering all the things you have to factor in: competitive pricing, customer expectations, how product costs and shipping impact your bottom line, and other operational overhead costs.
You have to find a sweet spot that doesn’t impact your sales or profit.
If you price your products too low to beat competitors, then you might win more sales, but your profit margins will suffer. You have to hope those losses are made up in volume.
Aiming for the middle ground will leave you to compete on similar price points with everyone else. This may balance profit and volume, but you’ll need to find more ways to make yourself stand out, which means you might have to put more money and effort into your marketing efforts.
If you price too high in hopes of making your product appear more valuable to high-end consumers, you could attract an audience willing to pay more. By doing so however, you turn off audience segments that are price-sensitive.
There are a few different strategies you can use to decide how to price your products without negatively impacting your margins. These pricing methods will help you determine whether you’re pricing for high or low volume, trying to find that perfect middle ground, or leveraging psychology to move your products at any price.