The Price Is Right – How To Arrive At The Best Price For Your Products
Avoiding Common Mistakes
A trap many E-Biz owners fall into is trying to set their prices by simply adding a percentage or flat amount to an items cost they buy a watch for $20, slap another $20 on the price tag, and pass it along to their customers. The problem with this type of pricing is that your costs arent fixed. For example, your wholesale costs for buying and reselling 100 blow-dryers will differ substantially from your wholesale costs for buying and reselling 10,000 of the exact same blow-dryer.
Another problem with this kind of pricing is that your customers may be willing to pay more. Let’s say you added $20 to the cost of your watch and it sold well. But it may have sold just as well if you added $40, and your profits would have greatly increased.
7-Step Pricing Strategy
1. Look at your competitors prices and get a range.
According to Johnson, Your consumer has in their mind some idea of whats the right price to pay for your product. If your prices are going to be dramatically different, higher or lower, youre going to have...
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