Setting the price for your product or services is probably the single most important business decision you’ll ever make, and getting it wrong can cost you dearly.
Let’s show you what we mean.
Imagine that XYZ Ltd sells widgets and last month it made a profit of £700 selling 2,000 units.
So XYZ.s profit and loss account looked like this:
Now the directors are XYZ Limited are a pretty switched on bunch so they commission some market research to see what would happen if they increase or decrease their prices.
And they discover that if they decrease their prices by just 10% they can increase their volume by 20%.
However if they increase their prices by 10% they'll lose 10% of their sales volume.
So looking at this, decreasing their prices seems a pretty good option - right?
Well, let's look at what happens in each scenario:
Not only will XYZ be worse off, but it will be much worse off.
Now we’re not suggesting every business needs to increase its prices.
However what we are saying is that you need to look at your pricing strategy very carefully and never fall blindly into the trap of simply accepting that lower prices = higher sales and profits.
And remember, every business has a magic price - as long as you're on the left side of that magic price, you can afford to increase your prices.
Now for some even more surprising pricing numbers, watch the video below and grab your free download.
Click here for your free download....