If you own your own business and need a little advice on how to analyze your business’s prices Gordon Tang has tips on how to expertly price your business’ range of products and services.
3 Pricing strategy and analytics tips:
- Decide whether you want to sell a larger volume of goods for a competitive price or whether you want to try selling a fewer number of goods for a higher price
As a business owner, you can choose to price your goods at relatively cheap, competitive price in order to try and sell a large volume of stock. Or you can choose to go a different route and try and sell a far smaller number of goods for a far higher price.
As an example, inexpensive clothing stores will try and shift double the amount of handbags in a month, then a luxury retailer who specializes in offering high-quality leather handbags. However, both businesses will generate millions of dollars in profit on an annual basis and both pricing strategies are valid strategies to consider implementing with your own business and its goods and services.
- Analyze your current price points, to see whether they should remain the same or be raised or lowered
One way to figure out whether your business‘ products and services are priced at the right price point, in order for your business to make a sizeable profit, it’s well worth analyzing how many products you sell in a single week and which products sell more stock than others.
As you may find that certain products aren’t selling because they are priced to high, while other products may be flying off your business shelves as they are priced at the correct price point.
- Make a note of your competitors’ price points
It’s well worth making sure that you keep up to date with the prices which your competitors are offering their customers. As ideally, you’ll want your prices to be competitive with your competitor’s prices. While you may not want to try undercutting your competitors prices on every item, which will lead to a price war, which may end up costing your business hundreds of thousands of dollars in revenue, or millions of dollars in revenue, you may want to pick certain products which you want to undercut your opposition’s prices with.
In order to choose with products, you’ll want to offer for a cheaper price point than your competitors simply make sure that your business’ top 10 products are priced lower than your competitor’s versions of your products. As potential clients who are not loyal to either business will be likely to opt for the company which is able to offer the product which they desire at the lowest price.
In conclusion, hopefully after reading the three invaluable pricing tips and pricing analysis tips listed above, you’ll find it a breeze to price your business’ goods and services. If you follow the 3 tips listed above, you should find that your business’ sales, revenue, and profits will soar as a direct result of your pricing decisions.