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Showing posts with the label Pricing

The key to setting profitable prices for your products and services

One thing I've learnt over time is to never leave anything to chance, especially in business. It's important to make data driven decisions. This means collecting and using the information around you to choose those options which give you the best outcomes. While you will not always get it right all the time, it's important to err on the side of caution. So with that said, many small businesses seem to be unknowingly undercharging for their goods in an effort to be competitive. They set prices based on the markets and totally ignore their internal cost structure. Some industries (like retail) are about moving volumes. The profit margins are often quite small and so the only way to be profitable is to sell as many units as you can, while minimizing your costs. However, you can only manage your costs effectively, if you understand them. How to set a good price There are 3 factors to consider when setting prices: a.) Your costs b.) Your competitors c.) How much your customers

Are your prices really profitable?