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Why you Should Price High
1. Why You Should Price High
From SMB-Squared - Business Made Easy
2. Price reflects value to the customer.
A higher priced brand may very well have the same or close to the same
production cost as a lower cost brand. By pricing high you give your product an
inherit value. You show that your company believes so highly in the product that
it’s worth more. The product is worth more because of what it can do for the
customer.
From SMB-Squared - Business Made Easy
3. Your pricing is a reflection of the true market value of a
product.
If you can sell a product for $4.00 rather than $3.00 than why not? There
is an added dollar in it for you and at the end of the day we are all in business to
make money. The cash you bring in pays for all expenses and keeps you in
business longer.
From SMB-Squared - Business Made Easy
4. But what about my customer? Well if your customer is
just as happy at $4.00 as they are at $3.00 than what’s there
to be afraid of?
Be afraid of pricing too low!
From SMB-Squared - Business Made Easy
5. When prices rise customers flee.
When prices rise customers flee. You can’t sell an item that everyone believes
is worth $3.00 for $4.00. Even if you have a competitor selling at $4.00. If you start
at $3.00 it’s a thousand times harder to go from $3.00 to $4.00 than it is to realize
you are over priced at $4.00 and drop to $3.00. Pricing high gives you the ability to
run sales.
From SMB-Squared - Business Made Easy
6. There are whole industries that operate on running sales.
The Furniture Industry for Instance. “IT’S OUR BIGGEST BLOW OUT SALE
OF THE YEAR! 50% OFF EVERYTHING!” Well this sale basically runs all the
time. How? Well they price at double what they actually want for the merchandise.
Pricing like this opposed to your competitors gives you the ability to allow the
customer to believe they are getting a higher valued item for a great deal.
Whereas this may sound immoral well all have fallen for the trick before and as
the customer it is very nice to say, “I got this wonderful widget on sale! Yes, yes,
50% off! I saved $40.00!”
From SMB-Squared - Business Made Easy
7. Underselling yourself
Underselling yourself or your product is a mistaken made far too often by new
businesses. They choke themselves to keep prices low and get by. Remember,
when starting out you will have unforeseen expenses.
From SMB-Squared - Business Made Easy
